Investment trust awards 2017: Medals for monthly money

These regular savings awards complement our sector-based awards, by focusing on trusts that have best rewarded investors who have contributed £50 monthly into qualifying trust shares for five years (£3,000 in total). That should be a sufficient period to iron out the peaks and troughs in share price discounts or premiums to net asset value (NAV). Despite a more diverse number of sectors under review in the regular savings awards many award-winners appear in both categories. Winners profiled by Holly Black.

Each chart shows how £50 invested monthly over five years has grown.

Developing markets

Contenders: Trusts with the bulk of their assets currently invested in global developing markets

Gold: Fidelity Asian Values

Nitin Bajaj has claimed Gold in his first full year at the helm of Fidelity Asian Values. A decision to move to a more value-oriented investment strategy by the board in 2015 has paid off for the trust, which was in Silver position last year. Over the past 12 months the trust has returned 55.4 per cent, against a sector average of 39 per cent, putting it in pole position among its peers. With 19 per cent of the portfolio in Indian equities, it has had exposure to one of the world’s fastest-growing economies.

Silver: BlackRock Frontiers

BlackRock Frontiers has returned to winning form and taken the Silver medal this year. Manager Sam Vecht has a high-conviction approach and is not afraid to avoid entire regions and invest in unloved areas. Pakistan and Romania are where he is currently finding the best opportunities. It has delivered a NAV total return of 96.3 per cent over five years.

Bronze: Schroder Asian Total Return

Securing Bronze medal position for a second year is Asian Total Return, which has now truly settled in to the Schroders suite. The trust has almost half of its assets in Chinese and Hong Kong listed stocks, with a strong bias towards the technology sector – among its largest holdings are Alibaba, Tencent and Samsung Electronics. Manager Robin Parbrook looks to generate a high total return as well as preserving capital. The trust has delivered a total return of £4,361 on a £50 monthly investment over five years.

Overseas smaller companies

Contenders: All overseas trusts with a primary focus on smaller companies

Gold: Baillie Gifford Shin Nippon

Baillie Gifford is known for its long-term approach to investing; the house strategy is to look at least five years ahead, to base investment decisions on stock selection and try to avoid any macroeconomic noise. It seems to be working for the Shin Nippon trust, which has achieved a hat trick of Gold medal placings in our awards. This trust has delivered the highest return of all our winners, with a £50 monthly investment over the five years to 31 January generating a total return of £6,021.

Silver: JPMorgan US Smaller Companies

JPMorgan US Smaller Companies replaces its European counterpart in our list of winners this year. US stocks have had a strong run since Donald Trump’s election victory, and domestic companies in the country are expected to benefit from cuts in corporation tax and a splurge in infrastructure spending. Manager Don San Jose says overweight positions in consumer discretionary and financial services stocks added the most value to performance recently. The trust has delivered a NAV total return of 145.6 per cent over five years.

Bronze: TR European Growth

This Henderson-managed trust focuses on small and medium-size European firms – its greatest weightings are in Germany and France, which account for 20.2 per cent and 14.9 per cent of the portfolio respectively. The share price has returned 180.9 per cent over the past five years compared to just 108 per cent from its benchmark, the Euromoney Smaller Companies Index.

Overseas developed markets

Contenders: Trusts from the North America, Europe and Japan sectors

Gold: Baillie Gifford Japan

Manager Sarah Whitley runs the £500 million Baillie Gifford Japan trust from Edinburgh, which helps her avoid any short-term noise in the market. She runs a fairly concentrated portfolio of between 40 and 70 holdings in small and medium Japanese companies at any one time. The trust has a high active share of 86 per cent and currently has around a quarter of its assets in technology companies. The trust has claimed the Gold medal for its incredible long-term performance, with a return of 210.9 per cent over five years.

Silver: North American Income

Run by Aberdeen, this trust aims to deliver an above-average dividend income primarily through investing in large US companies, with its top 10 holdings including behemoths such as Pfizer and Microsoft. The trust, which first launched in 1902 but more recently changed its remit from an index-tracker, currently yields just shy of 3 per cent. A strong dollar and a stellar US stock market run have helped the share price climb 51 per cent over the past year, yet the trust is on a 9 per cent discount.

Bronze: Schroder Japan

Growth Manager Andrew Rose is a seasoned Japan investor and has now looked after this trust for a decade – he has also run the Schroder Tokyo trust since 2004. Rose has no constraints on this trust in terms of the size of company or the sectors he can invest in, which means he can back whichever areas of the market he believes offer the best opportunities Currently almost a quarter of the £270 million trust’s assets are in consumer cyclical stocks and a further 18 per cent is in industrials. The trust has delivered an annualised return of 17 per cent over the past five years and is currently on a discount of 9 per cent.

Global generalist

Contenders: Trusts from the global and global equity income sectors with at least 70 per cent invested outside the UK

Gold: Scottish Mortgage

Scottish Mortgage has grown its NAV by a massive 146 per cent over the past five years and delivered stellar share price returns over that period too. It is little surprise, then, that this is the fourth consecutive year it has won the Gold medal in this category. The £5.1 billion trust introduced a tiered fee system on 1 April, which sees its basic 0.3 per cent annual charge fall to 0.25 per cent on total assets above £4 billion. It's a strategy used by several Baillie Gifford-managed trusts and is an effective way to reduce charges as assets grow. The trust is currently on a 4.1 per cent premium.

Silver: JPMorgan Global Growth & Income

This trust takes the Silver medal after producing a total return of £4,775 from a £50 monthly investment over five years. Manager Jeroen Huysinga invests in between 50 and 90 stocks and currently has more than 40 per cent of the portfolio in the US. Insurance and healthcare investments have been among the best performers of late, including pharma firm Bayer and insurer Assicurazioni Generali. The trust invests globally using currency hedging. It currently has 7 per cent gearing.

Bronze: Monks

With almost half of its assets in US equities, Monks has benefited from a change in manager and the recent boom across the pond. It is ranked top in the global sector over the past year. Regular savers would have seen £50 a month grow to £4,742 over the past five years. A boost for investors will come on 1 May when Monks, following its stablemate Scottish Mortgage, introduces a new tiered management fee. It will charge 0.45 per cent on the first £750 million of its total assets and 0.33 per cent on the rest – working out at 0.39 per cent overall for the £1.5 billion trust.

UK equity

Contenders: Trusts from the UK all companies, UK equity income and UK smaller companies sectors

Gold: Invesco Perpetual UK Smaller Companies

Domestic stocks were hit hard after the Brexit vote in June and were slower to rebound, but many are now ahead of their pre-referendum levels. Invesco Perpetual UK Smaller Companies looks for quality businesses with strong balance sheets. The trust has delivered a NAV total return of 110 per cent over five years, compared with 90 per cent from the Numis Smaller Companies benchmark.

Silver: Strategic Equity Capital

A second year in Silver position for this small-cap investment trust, currently on a 12.8 per cent discount. It has a highly concentrated, private-equity style portfolio of just 17 holdings. The past year has been a difficult one for the trust – it has returned just 1.7 percent compared to a sector average of 21.9 per cent. Manager Stuart Widdowson abruptly left management group GVQ in February. But the trust has been successful over the long term, generating a NAV total return of 131.7 per cent over the past five years. Stepping into Widdowson’s shoes is Jeff Harris, who had previously held the role of deputy fund manager since May 2014. The investment process remains unchanged.

Bronze: Fidelity Special Values

Alex Wright has managed this trust since September 2012, and the open-ended Special Situations counterpart since 2014. He takes a contrarian approach to investing and often holds cyclical and out-of-favour stocks. Currently trading at a premium of around 8 per cent, the trust was boosted last year by a rally in value stocks – its NAV grew 23.2 per cent over the past 12 months.


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