Can these 2 top-performing investment trusts help to make you a millionaire?

Big Yellow
Big Yellow

The last five years have been one of the most surprising Bull Runs for share prices in decades. Investor sentiment has improved dramatically since the aftermath of the credit crunch, when it was extremely downbeat. This has allowed valuations to move upwards at a rapid rate. Indeed, the FTSE 100 has posted capital growth of 23% during the last five years. When dividends are added to that figure, it is approaching 8% per annum.

However, during the same time frame, two investment trusts have posted significantly stronger returns. Could they continue to outperform the FTSE 100 and, in doing so, help make you a millionaire?

Strong performance

Reporting on Wednesday was the Standard Life Private Equity Trust(LSE: SLPE). Its performance in the quarter to 30 June 2017 was impressive, with its net asset value increasing by 5.9%. In the last five years, the company has recorded a rise in its price of 133%. This is clearly significantly higher than that of the FTSE 100, and is also well ahead of its Private Equity benchmark. It has increased in value by 90% during the same time period.

Despite such a strong performance over a sustained period, the trust still trades at a 10% discount to its net asset value. This suggests it may still offer good value for money. Furthermore, since it invests in funds, it provides considerable diversity. That's especially the case since it is geographically diversified. For example, 19% of the fund is invested in North American equities, while 18% is in European equities. This could help to reduce its overall risk, which makes its risk/reward ratio highly enticing at the present time.

Growth potential

Also performing well in recent years has been real estate investment trust (REIT) Big Yellow Group(LSE: BYG). The storage specialist has recorded a share price rise of 136% during the last five years as demand for its services has remained buoyant. The company has a strong position within its market, and with demand likely to grow in future years it could report a rising bottom line.

Looking ahead to the 2019 financial year, the company is forecast to record an increase in earnings of 8%. This is slightly above the FTSE 100's forecast growth rate and means that dividend growth could outpace inflation. In fact, the company's dividends per share are forecast to increase by 9% next year and this puts it on a forward yield of 4.4% from a shareholder payout that is due to be covered 1.25 times by profit. This suggests that dividend growth could at least match profit growth without putting the company's financial stability under pressure.

Certainly, there are concerns about the prospects for the UK economy over the medium term. Brexit is causing uncertainty to rise, and this may hurt overall economic activity. However, with a relatively defensive business model, Big Yellow Group could continue to be a strong performer over the next five years.

Millionaire potential

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Peter Stephens has shares in Big Yellow Group. The Motley Fool UK has no position in any of the shares mentioned. 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.

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