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Investment Trusts: the big winners and losers in 2015
We're in the home straight of this year’s investment race. Which investment trusts are poised to win medals and which wooden spoons?
The top of the investment trust league table for the year to date shows a motley crew of property and private equity trusts have delivered a turbo-charged performance. But some more mainstream and better-known investment trusts have done very well too.
By contrast, mining and emerging markets funds have fallen heavily, as did a couple of specialist funds.
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As we enter the home straight of this year’s investment race, which investment trusts are poised to grab the medals and which the wooden spoons for 2015?
The top of the investment trust league table for the year to date shows a motley crew of property and private equity trusts delivered a turbo-charged performance.
Industrial Multi Property was the hare to everyone’s tortoise.
Shares in this tiny Isle of Man fund did nothing until August when a refinancing saw the previously bombed out stock shoot up 130% in one day.
Fifth placed Burford Capital is an AIM-listed Guernsey-based litigation finance company, another sign of how niche investments can deliver startling returns if you understand what they do.
We have to go down to sixth place before finding a mainstream investment investors may be familiar with.
It’s Lindsell Train, a global investment trust whose shares soared by 50%, boosted by its stake in Nick Train and Michael Lindsell's investment firm as well as the stock picking talents of the two managers.
That’s a great result and takes total shareholder returns to 178% over five years.
However, the shares trade at a 33% premium above their net asset value, so new investors need to be extremely careful before buying at these levels. The company has repeatedly warned that its shares are expensive.
Smaller company trusts have had a brilliant year. The big story here is Harry Nimmo’s return to form. After dropping 14% last year, by 3rd December this year his Standard Life UK Smaller Companies fund had gained 33% year to date.
Investors got more good news recently when Nimmo declared he would manage the trust for another seven years before he retires.
Chris Mills’ Oryx International Growth and Georgina Brittain’s JPMorgan Mid Cap have also led the charge of funds investing below the FTSE 100 index of biggest British companies.
A small cap rally has been evident outside the UK too.
Baillie Gifford Shin Nippon, which invests in Japanese smaller companies, is a good example, generating a 41% total return so far this year.
A change in driver – with John Macdougall replaced as manager by Praveen Kumar in October – doesn’t appear to have slowed it down either.
Its impressive performance pains me as I briefly held it in my Top Trusts portfolio at the end of last year before selling it on misplaced fears that a weak yen would erode its returns in sterling. I shouldn’t have worried as the Japanese currency held up well against the pound and did not spoil the returns from the portfolio.
It’s a shame as it would have done my portfolio a power of good, outperforming my top performers of the year Jupiter European Opportunities and Henderson Smaller Companies.
Still at least I didn't own mining or commodity trusts which dominate the list of fallers this year! Investors in these battered funds will scour the market for clues of a recovery next year.
Interestingly, the biggest and most high profile of them – BlackRock World Mining – isn’t the worst performer and doesn’t make it into the top ten fallers, although with a 38% slump in the shares it has got nothing to celebrate.
Other specialist funds have taken a hammering too. It’s worth me picking out Juridica Investments, a rival litigation fund to Burford Capital. Its shares lost two thirds of their value this year after investors lost confidence in the fund after two big cases went against it.
Proof that in law, as in investment, it’s never easy to predict the winners and losers.
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Look up the shares
Look up the investment trusts
- Lindsell Train (Ordinary Share)
- Industrial Multi Property (Ordinary Share)
- Standard Life UK Smaller Co. (Ordinary Share)
- Oryx International Growth (Ordinary Share)
- JPMorgan Mid Cap (Ordinary Share)
- Baillie Gifford Shin Nippon (Ordinary Share)
- Jupiter European Opportunities (Ordinary Share)
- Henderson Smaller Companies (Ordinary Share)
- BlackRock World Mining Trust (Ordinary Share)
- Juridica Investments (Ordinary Share)
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- Top Trusts: my winners and losers in the crash
- Top Trusts: how I beat the All Share!
- Lindsell Train scraps gearing and revamps benchmark
- Investment Trust Watch: Nimmo hero, property zero
- John MacDougall steps down from Baillie Gifford Shin Nippon
- BlackRock World Mining slashes manager's fee
- Investors tell loss-making legal fund to wind down
by Daniel Grote on Sep 26, 2016 at 09:48