Patrick Martyn who is now 80 years old, says a portfolio of investment trust shares has helped to fund his retirement.
Patrick, a retired scientist, has been an investor for almost 60 years. He says: “I started with free shares in the company I worked for – received as a yearly bonus. I retained these shares, which formed the bedrock of a portfolio, and started to look at other equity opportunities.”
After “one or two hiccups” with individual company shares Martyn switched to investment trusts, and still holds some of the first trusts he bought today including Bronze-rated Fidelity European Values (FEV), Silver-rated Fidelity Special Values (FSV) and Bronze-rated Fidelity Asian Values (FAS).
All three have delivered strong returns over the long-term. Fidelity European Values, for example, has delivered annualised total returns of 12.3% over the past 10 years, according to Morningstar data.
Meanwhile, Fidelity Asian Trust has delivered total annualised returns of 12.7% over the same period, and Fidelity Special Values Trust 11.9%.
Morningstar analyst Fatima Khizou says Fidelity Special Values' has an "experienced manager, broad analyst ranks, and well-defined and successfully implemented approach".
This particular trust has been managed by Alex Wright since 2012, although Wright has more than 17 years experience with the Fidelity group. Khizou adds: “Wright practices a contrarian, value-oriented approach. He targets unloved companies that have the potential to recover based on factors such as a unique business model, corporate change, or exceptional value.
“He aims to buy into such situations at an early stage, ideally before any recognition of a change in fortunes, either in terms of sentiment or operational results.”
Patrick looks at long-term performance before buying any investment trusts: “These particular trusts were selected on the basis of consistent above average performance in comparison with most others. I still hold these trusts, which have maintained consistent growth year-on-year.”
Patrick initially bought these investment trusts through a local stockbroker, whom he continues to use. He also has a number of Sipp holdings with AJ Bell.
He says: “After I retired, I started to drawdown from my workplace pension. At this point I also took up consultancy work for a group of European chemical companies, and was involved in running their plastics recycling group.”
Martyn used the fees he earned from this to open new pensions with AJ Bell, believing the firm to be one of the better personal pension operators, in terms of fees and fund choice.
He adds: “Again, I invested in the reliable and consistent Fidelity trusts. I am now drawing down from these funds and hope to take out enough to keep me solvent and leave the rest to continue to appreciate.”
Alongside these Sipps, Patrick also has an Isa - and runs one on behalf of his wife. Both are primarily invested in investment trusts too. He says: “The basis of these Isa investments is still with the Fidelity group, but now includes some higher yielding trusts including City Merchants High Yield (CMHY), which has yielded 5.4% and Temple Bar (TMPL), yielding 4.2%.”
Both have been consistent performers; Temple Bar is another investment trust with a Silver rating from Morningstar.
Patrick says he has also added a number of trusts which invest in the scientific sector. As he points out “I understand a bit more about these individual holdings that I do about the banking sector”.
These trusts include International Biotechnology Trust (IBT), Polar Capital Technology Trust (PCT) and the Biotech Growth Trust (BIOG). IBT has a five-star rating from Morningstar, while PCT has a five-star rating, both reflecting strong investment performance in recent years.
The latter - Biotech Growth Trust - has just a three-star rating, but Morningstar analysts remain confident the trust is well placed to deliver value for investors interested in this sector.
Morningstar analyst David Holder says: “Recent underperformance does not dent our long-term conviction in the Biotech Growth Trust, and the strategy remains a strong option for those investors seeking long term and dedicated exposure to this niche area.
“The combination of deep clinical understanding of scientific developments via a large specialist resource, together with a solid process, makes for an excellent offering. The strategy retains its Morningstar Analyst Rating of Silver.”
As well as investing for himself, Patrick has also taken out investments on behalf of his daughter and three grandchildren. He adds: “I would advise any starter investors to stick with well-run investment trusts until they can be confident of being more adventurous. AJ Bell provides very good summaries of such performance in tabular form and easy to understand.”
But he points out that not all of his investment trusts holdings have been successful, including a bet on two new investment trusts, which "folded very quickly". He adds: "I would also caution when you notice ‘greed’ raising its head, get out quickly. For example, I originally invested in Neil Woodford's Patient Capital Trust (WPCT), but retracted immediately when he expanded his call for more funds.”
