We unveil the 15 award-winning superstar trusts with top performers drawn from all corners of the closed-ended universe.
Quality continues to flow through this year’s awards roster, with several trusts returning for another bite at the cherry.
Some winners of this year’s Money Observer Investment Trust Awards came through 2018 in fine fettle. Others were not immune to the setbacks in equity markets. But all emerged with among the best net asset value (NAV) total returns in their sectors over three years, which is the minimum period over which performance should be judged.
Our awards seek to highlight trusts with the best chance of maintaining their past success. That is why we focus on NAV total returns, as they are a better guide to the skills of the managers than share price returns, which can be distorted by potentially reversible changes in the discount or premium to NAV.
We also exclude trusts that have recently lost or announced the departure, of a highly regarded manager, as in the case of JPMorgan Global Growth & Income; or undergone major changes, such as the merger of MedicX and Primary Health Properties; or where good three-year returns have been substantially due to one stellar year, as with BlackRock World Mining.
Our approach is validated by the repeat success of a number of our award-winners, most notably Scottish Mortgage, which wins the best Global Growth Trust award for the fifth successive year. 3i Infrastructure, Baillie Gifford Shin Nippon, JPMorgan Emerging Markets, Miton Global Opportunities and Rights & Issues also repeat their wins from last year.
Trusts that were either winners or highly commended last year and make a repeat appearance in 2019 include Baring Emerging Europe, BlackRock Smaller Companies, BMO Capital & Income, Polar Capital Technology, Princess Private Equity, Schroder AsiaPacific, TR European Growth and TR Property. We have introduced a Best North American Trust award this year, in recognition of the welcome increase in trusts that invest in this important region.
Allianz Technology achieved the highest returns among this year’s award-winners, followed by Scottish Mortgage, Baillie Gifford Shin Nippon and JPMorgan Asian. Most of our winners’ portfolios vary significantly from their benchmark indices and all beat those benchmarks over three years.
Eight trusts have also beaten their benchmarks over five and 10 years, confirming that it can be worth paying extra for active management as long as you pick the right trust. Our awards seek to assist investors in this respect by recognising consistently superior winners in their respective sectors.
The 2019 roll of honour
Note: *Highly commended
The performance period under review is for the three years to 31 January 2019 and the underlying data was supplied by the Association of Investment Companies. The charts that accompany award profiles were sourced from FE Analytics. In some instances we have referenced relevant benchmark indices rather than average sector returns.
How the 2019 Investment Trust Awards are won
Only investment companies that are recognised by the Association of Investment Companies qualify for inclusion. Our awards are based on an investment company’s net asset value (NAV) total return (ie with income reinvested).
We rank them in the sector(s) under consideration according to the following weighted result: 40% for annual NAV performance to 31 January 2019, 30% to 2018, 20% to 2017 and 10% for the overall three-year NAV return to 31 January 2019. However, in the private equity category, each year’s performance is given equal weight because returns tend to flow through sporadically.
To emphasise consistency, we have excluded trusts when NAV total returns over any 12-month period within the last three years have been in the bottom quartile of their sector eight or more times (ie on at least a third of the possible occasions).
Regular savings (Medals for Monthly Money) awards
A combination of different sectors is taken into consideration for each of these awards. See the regular savings article for details.
The methodology is based on share price total return for monthly savings of £50 over five years. Contenders must have had a minimum £50 million market capitalisation at the start of the review period on 31 January 2014.
The final judging process for the above categories also includes a qualitative element. Typically these may include: manager’s tenure; liquidity in the shares and size of the company; the strategy broadly tallies with retail investors’ expectations; and the underlying portfolio is reasonably diverse.
PREMIER GROUP AWARD
The Premier Group award is open to management groups with a diversified choice of investment companies. We include the returns of all those managed by the group for at least three years, or those that retained the investment manager in the event of a switch. The contribution of each company is calculated on the same weighted three-year basis as the sector-based awards.
Performance and other data
The Association of Investment Companies supplied the performance figures for the awards, referencing data supplied by Morningstar.
The line charts (sourced from FE Analytics) that accompany the sector-based awards measure the actual total return to shareholders over three years to 31 January 2019.
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