Five investment trusts to watch in 2022

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Kate Marshall, Senior Investment Analyst

In 2021 the global economy continued its recovery from the effects of the Covid-19 outbreak. This economic recovery hasn’t been a completely smooth ride, though, and has differed by country and region.

From year to year, it’s one thing trying to predict what’s ahead of us economically, let alone what the impact will be on global markets. The coronavirus pandemic has been a perfect example of this – a once in a lifetime event followed by unpredictable market moves and government action.

Markets performed differently in 2021 compared to 2020 and this is once again a reminder that a diversified portfolio makes sense for most investors. Remember to also consider your longer-term goals and attitude to risk when thinking about any investment.

Here we look at five investment trusts that have different objectives and could be considered for a variety of portfolios.

These investment trusts aren’t just for 2022. If you’re thinking about investing you should consider these ideas as potential building blocks for portfolios invested for the long term. We think a sensible time horizon for investing is at least five years. All the investment trusts below have the flexibility to use gearing (borrowing to invest) and derivatives, which can add risk.

This article isn’t personal advice or a recommendation to invest and remember all investments and any income they produce can fall as well as rise in value – you could get back less than you invest. Yields are not a reliable indicator of future income. If you’re not sure an investment is right for you, please seek advice.

Investing in these investment trusts isn’t right for everyone. You should only invest if the trust’s objectives are aligned with your own, and there’s a specific need for the type of investment being made.

Closed-ended funds can trade at a discount or premium to the net asset value (NAV).

You should understand the specific risks of a trust before investing, and make sure any new investment forms part of a diversified portfolio.

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