In the case of investment trusts the playing field is narrower, with around 400 closed-ended funds to choose from; but with hundreds of trusts to choose from, finding those that have the reliability factor remains an uphill task.
To help investors focus their sights on trusts that have earned their stripes over the years as consistent performers, the Association of Investment Companies (AIC) has crunched the numbers and come up with its own league table of the top 20 most consistently performing investment companies over the last 10 years..
The AIC ranked trusts by discrete annual returns and benchmarked outperformance against the overall average trust. Where two trust had the same consistency score, volatility of returns was used to differentiate between them.
The two top performers were from the global sector, which dominates the list, with five out of 20 trusts being global. This may not come as a surprise given that global funds have the freedom to invest anywhere they see fit.
Taking pole position is Lindsell Train, managed by Michael Lindsell and Nick Train, while F&C Global Smaller Companies, managed by Peter Ewins and a member of the Moneywise First 50 Funds follows in second place.
It is worth noting the UK features strongly, with five UK-focused trusts featured in the list. They are: Invesco Perpetual Select UK Equity, Invesco Perpetual UK Smaller Companies, Finsbury Growth & Income (a member of our First 50 Funds), F&C Commercial Property (also in the First 50 Funds) and Threadneedle UK Select Trust.
Annabel Brodie-Smith of the AIC says: ‘It’s important for investors to remember that performance is only one factor to consider when researching investment companies, and they also need to look at other criteria including portfolio composition, gearing, discounts and charges.’
She points out that investors usually focus on the latest top performers but consistent long-term past performance is key when considering an investment.
Below is the list of most consistently performing trusts:
|Rank||Company||AIC sector||Number of times above overall weighted average||Volatility of Return (the lower the score, the lower the volatility)||% share price return total over 10 years to 30 April 2017|
|Overall Weighted Average||100.36|
|2||F&C Global Smaller Companies*||Global||9||19.21||199.67|
|3||Electra Private Equity||Private Equity||9||32.74||259.7|
|4||Invesco Perpetual Select UK Equity||UK All Companies||8||18.64||183.26|
|5||Invesco Perpetual Select Smaller Companies||UK Smaller Companies||8||19.84||213.91|
|6||Finsbury Growth & Income*||UK Equity Income||8||20.11||180.18|
|7||Mid Wynd International||Global||8||21.39||204.21|
|8||Edinburgh Dragon||Asia Pacific - Excluding Japan||8||22.27||170.24|
|9||JP Morgan US Smaller Companies||North American Smaller Companies||8||23.5||209.44|
|10||Schroder Oriental Income||Asia Pacific - Excluding Japan||8||24.14||209.78|
|11||Jupiter European Opportunties*||Europe||8||27.05||222.91|
|12||JP Morgan American||North America||7||13.84||216.26|
|13||Martin Currie Global Portfolio||Global||7||15.95||144.9|
|14||F&C Commercial Property*||Property Direct - UK||7||18.92||88.49|
|15||JP Morgan Elect Managed Growth||Global||7||17.27||106.07|
|16||Threadneedle UK Select Trust||UK All Companies||7||18.92||88.49|
|17||Jupiter US Smaller Companies||North American Smaller Companies||7||19.04||186.75|
|18||Aberdeen Asian Income||Asia Pacific - Excluding Japan||7||19.77||173.95|
|19||Allianz Technology||Sector Specialist: Tech Media & Telecomm||7||21.84||313.41|
|20||Witan Pacific||Asia Pacific - Including Japan||7||22.9||122.06|
Source: AIC using Morningstar. *Denotes member of the Moneywise First 50 Funds.
This article was written for our sister magazine, Money Observer.