Investment trusts better buy: Scottish Mortgage or AVI Global?

first_img G A Chester | Monday, 7th June, 2021 | More on: AGT SMT Third Point Investors Tencent Holdings 10 years annualised “This Stock Could Be Like Buying Amazon in 1997” 3 years annualised G A Chester has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Alibaba Group Holding Ltd., Amazon, and Tesla. The Motley Fool UK has recommended ASML Holding and Illumina and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Investment trusts better buy: Scottish Mortgage or AVI Global? 46.1 Illumina 1 year 16.0 Enter Your Email Address 11.6 18.3 SMT top 6 holdings See all posts by G A Chester AGT top 6 holdings Simply click below to discover how you can take advantage of this. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Sony Group 65.8 SMT has delivered two to three times the gains of AGT over three, five and 10 years. It’s also well ahead over one year, although both investment trusts have produced very strong returns in this period. Indeed, they’re rank at one and two in the Association of Investment Companies’ global category.However, over the last six months, their positions have reversed. AGT has materially outperformed SMT. Is this merely a temporary reversal? Or could it be the start of a long period of outperformance by AGT, much as the last decade was for SMT?A tale of two investment trusts’ strategiesAGT’s value approach is to find stocks it believes are trading at wide discounts to their intrinsic net asset values. SMT’s growth approach is to find stocks it believes have potential to deliver exceptional returns.The two trusts’ largest equity holdings give a flavour of the kind of stocks their different approaches produce: SMT performance (%) 37.3center_img ASML Holding 11.6 Oakley Capital Investments 8.7 Pershing Square Holdings I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Period Christian Dior 5 years annualised Alibaba Group Holding 25.0 AGT performance (%) Image source: Getty Images. Scottish Mortgage Investment Trust (LSE: SMT) and AVI Global Trust (LSE: AGT) follow very different strategies. SMT’s growth focus has produced a long period of high returns. Conversely, a value focus has seen AGT relatively underperform.However, with some signs investors may be cooling on growth and warming to value, which of these two investment trusts do I think is the better buy today?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Contrasting performancesThe table below highlights the contrasting performances of AGT and SMT over both the short and long term. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! 6 months Our 6 ‘Best Buys Now’ Shares Exor 34.3 Tesla It seems unlikely these investment trusts will fundamentally change their distinctive strategies. Both strategies are attractively well defined and long established. I’d put SMT and AGT among the best-in-class trusts at the extreme growth and deep value ends of the investing spectrum.The popularity of growth and value tends to be cyclical. One may outperform the other for lengthy periods. However, I can see a good argument for having exposure to both rather than trying to time hopping between them. And by owning the best in class from growth and value, I’d hope to outperform the market over the long term.But what if I could only choose one today?Investment trust better buy: SMT or AGT?Growth strategies have enjoyed a long period in the sun. And SMT has successfully identified some of the growth themes and stocks that have produced the highest returns.Intuitively, after a such a period of dominance by growth, I’d lean towards favouring value right now. I get a nosebleed just looking at the sky-high valuations of many of SMT’s holdings! Still, it’s possible the relative underperformance of value could persist. And that SMT’s many big-concept stocks, such as Tesla, could continue to defy conventional valuation measures.On balance though, if I had to choose only one of the two investment trusts today, I’d be inclined to pass on SMT and buy AGT. Of course, both trusts are actively managed and stock selection is important to their performances. As such, I have to accept the risk that either or both could underperform the wider market.last_img read more