Page 29 - DIY Investor Magazine - Issue 28

To underline the risk of choosing a long-tenured manager, two (James Anderson at Scottish Mortgage and Schroder Asia Pacific’s Matthew Dobbs) have recently announced their retirement; it could be reasoned that the best managers are the ones most likely to keep their jobs so perhaps we need to look for trusts where the managers have 10 years or more in charge but are still a decade or so away from normal retirement age. CHANGING TIMES I covered an earlier version of this list two years ago and there have been quite some changes! Only an additional £40k in ISA contributions has been added but the range has gone from 19 trusts generating £700k to £1.07m (just one £1m +) to 28 trusts generating £1m to £2.5m; that’s a big hike and another reminder, if needed, of the power of compounding. rather than the annual contribution method used by the AIC. The top 10 open-ended funds returned between 1,358% and 3,513% with Marlborough Special Situations run by the highly respected Giles Hargreave taking the top spot. Seven smaller company funds, two China funds, and a biotech specialist make up the top 10, displaying common themes with the list of closed-end funds; this table looks at the performance of the average small-cap fund and the average all companies fund over the main regions: Last year’s soaring tech sector pushed all trusts with this focus up the list; Asian trusts have mostly slipped back. The best performer in the 2019 list — Aberdeen New Thai with £1.07m — doesn’t even make this year’s top 28; TR Property, Acorn Income, BMO Global Smaller Companies, and Invesco Perpetual UK Smaller all departed due to lacklustre recent returns, whilst Pacific Horizon, JPMorgan China G&I, and Edinburgh Worldwide are the highest new entries. There are two ways to look at how quickly these lists have changed: Either you could argue that two years is nothing in investment terms, so the fact there has been so much change means we should pay it little attention; or that it’s been such an unusual period, with returns varying much more than they would normally do and we should focus on the fact the majority of the 2019 list is still present and that the main themes of smaller companies, tech, biotech/healthcare, and Asia continue to dominate. The truth is probably somewhere in between; if the list is repeated in future years, how it evolves over time should be illuminating and highlight the more consistent performers. HOW OPEN-ENDED FUND COMPARE SINCE ISAS BEGAN Laith Khalaf of AJ Bell produced a similar piece of research, covered in recent articles on Trustnet and ThisIsMoney; it focused on total returns from 6 Apr 1999 to 15 March 2021, Region/Country All companies UK 191% Europe 287% N. America 290% Japan 168% Small companies 757% 803% 756% 392% Again, small caps have delivered extra oomph in all regions across the globe, with Europe and North America neck and neck over this long period. The top 10 best-performing investment trusts ranged from 2,203% to 3,307% with Gresham House and Primary Health Properties the only entries in the study not included on the AIC’s ISA millionaire list. Although the best-performing open-ended fund beat all the investment trusts, the second-placed open-ended fund generated 1,902% and wouldn’t have made it into the closed- end top 10. It’s more anecdotal evidence that investment trusts tend to have the edge over their much better-marketed open-ended cousins. CLICK TO VISIT: 29 DIY Investor Magazine | Apr 2021