It’s well known that FTSE investment trust Scottish Mortgage offers exposure to artificial intelligence (AI) infrastructure stocks. In its portfolio, it holds Nvidia, Taiwan Semiconductor, ASML, and several other names in the space.

It’s not the only FTSE trust that’s invested in this area of technology though. There’s another trust that’s invested in AI infrastructure stocks and it’s making a much bigger bet than Scottish Mortgage.

A tech-focused trust

The fund I want to highlight is the Manchester and London Investment Trust (LSE: MNL). This is a growth focused product designed to achieve capital appreciation (but it also offers income).

“We invest in elite growth companies aligned with the next decade of progress.”

Manchester and London Investment Trust

Looking at this trust’s holdings, there’s a clear theme and that’s the AI buildout. Here’s a look at the top 20 holdings in the portfolio as of the end of April:

On that list, there are 15 AI infrastructure names. In other words, 75% of the top 20 holdings are AI-related.

So by investing in this trust, which currently trades for a little over £10, an investor could get significant exposure to this area of the tech sector. They could also get exposure to some very exciting names.

“The Industrial Revolution, beginning at Cromford Mill in 1771, was about the mechanization of muscle. It replaced the physical limitations of the human arm with the tireless output of the machine. The AI era represents the second half of that journey: the mechanization of the mind.”

Manchester and London Investment Trust

Is there an investment opportunity?

Is the Manchester and London Investment Trust worth considering for a Stocks and Shares ISA or Self-Invested Personal Pension (SIPP)? I think so, assuming one has a growth focus (long term) and is comfortable with volatility.

I like the strategy here. The fund managers generally focus on tech companies that are large, profitable, and lower on the risk spectrum (unlike Scottish Mortgage which is happy to invest in unlisted, unprofitable businesses).

They also run their winners. This can really help performance.

As for the track record, it’s strong. Over the five-year period to the end of April, its share price rose 85%.

Meanwhile, it currently trades at a major discount to its net asset value. This means investors can get exposure to all these exciting AI names cheaply.

Additionally, it pays a solid level of income. Management intends to pay a minimum 40p dividend for the next five years, which translates to a yield of nearly 4%.

Risk vs reward

On the downside, it’s risky. One major risk is the large allocation to Nvidia. This has recently been reduced to around 24% of the portfolio, but that’s still a massive weighting and adds a lot of risk.

Another issue is that many of the other holdings have extremely high valuations. Lumentum Holdings (a designer and manufacturer of optical and photonic products), for example, currently has a price-to-earnings (P/E) ratio of about 120.

One other thing to be aware of is that ongoing charges are around 0.9% a year. That’s more than twice the fee that Scottish Mortgage charges.

Overall, I see a lot of potential to consider here. That said, given the strong focus on AI infrastructure names, I would think about keeping position sizes relatively small to reduce risk.