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Trusts you can rely on By Sonia Speedy
While investment trusts often seem to live in the shadows in the fund management world, they have had plenty to shout about in recent times. Most notably, they have performed particularly well. The average investment trust was up 77% in the three Despite the high returns, investment trusts remain accessible, while charges have fallen over the same period. According to the Association of Investment Companies, the charges (total expense ratios) levied by almost a third of investment trusts are below 1%, whereas unit trusts typically charge over 2%, and often more than 3%. In April this year, Moneywise celebrated the best in the sector with its annual awards, picking out the trusts producing the most consistent returns while successfully managing volatility. How we picked the winners Using data from Trustnet, trusts were ranked on net asset value (NAV) performance over one, three and five years. After stripping out the most expensive, volatile and inconsistent trusts, our panel of judges selected the winners and runners-up. We initially looked at nine sectors. However, we had to reduce this to seven: UK Growth & Income, UK Growth, UK Smaller Companies, European, Far East Excluding Japan, Specialist and Global. Japan and North America were omitted as neither had sufficient funds to meet our criteria. We ranked the funds in each sector on NAV performance (gross income reinvested), calculated by Trustnet over one, three and five years to 23 January 2007. Performance over each timeframe was aggregated to produce an overall top 10 in each sector. This was then filtered by the RiskGrade volatility rating (0 is no volatility and 100 is the volatility of the average share) to remove the most volatile. The shortlist of five in each sector was passed on to our panel of four judges - who ranked the trusts on performance, manager skill, investment strategy, resources, prospects and pricing - to identify the winners and runners-up. UK Smaller Companies Winner Edinburgh Small Companies Trust provider: Standard Life Investments Fund manager: Harry Nimmo Contact: 0131 245 0055 Fund size: £62.7 million NAV % performance 5 years: 21.9% Share price % performance 5 years: 41.4% RiskGrade: 32 Total expense ratio: 1.64% Second place: Highly commended Framlington Innovative Growth Trust (AXA Framlington) Other finalists Merrill Lynch British Smaller Companies Trust (Merrill Lynch); Schroder UK Mid & Small Cap fund (Schroders); Falcon Investment Trust (Unicorn Asset Management) UK Growth & Income Winner Lowland Investment Company Trust provider Henderson Global Investors Fund manager: James Henderson Contact: 0800 832 832 Fund size: £263 million NAV % performance 5 years: 119.1% Share price % performance 5 years: 128.5% RiskGrade: 42.5 Total expense ratio: 0.79% Fund manager offers own ISA wrapper: Yes Second place: Highly commended Finsbury Growth and Income Trust (Close Investments) Other finalists Perpetual Income & Growth Trust (Invesco Perpetual); Invesco Income Growth Trust (Invesco Perpetual); JP Morgan Elect Managed Income (JP Morgan) UK Growth Winner Albany Investment Trust Trust provider: Rathbones Fund manager: Andrew Morris Contact: 0151 236 6666 Fund size: £41.4 million NAV % performance 5 years: 90.9% Share price % performance 5 years: 137.5% RiskGrade: 33.4 Total expense ratio: 0.85% Fund manager offers own ISA wrapper: No Second place: Highly commended Keystone Investment Trust (Invesco Perpetual) Other finalists UK Select Trust (Scottish Widows); Fidelity Special Values (Fidelity); Artemis Alpha Trust (Artemis) Global Growth Winner SVM?Global Fund Trust provider: SVM?Asset Management Fund manager: Donald Robertson & Colin McLean Contact: 0131 226 6699 Fund size: £221.5 million NAV % performance 5 years: 116.4% Share price % performance 5 years: 163.9% RiskGrade: 25.8 Total expense ratio: 0.92% Fund manager offers own ISA wrapper: Yes Second place: Highly commended Jupiter Primadonna Growth Trust (Jupiter Asset Management) Other finalists Advance Developing Markets (Progressive Asset Management); F&C Global Smaller Companies (F&C Investments); Genesis Emerging Markets (Genesis Fund Managers) European Winner JP?Morgan European Investment Trust Trust provider: JP Morgan Fund managers: Alexander Fitzalan Howard & Stephen Macklow-Smith Contact: 0500 500 324 Fund size: £452 million NAV % performance 5 years: 74.9% Share price % performance 5 years: 87% RiskGrade: 51.1 Total expense ratio: 0.97% Fund manager offers own ISA wrapper: No Second place: Highly commended TR European Growth Trust (Henderson Global Investors) Other finalists Eastern European Trust (Pictet Asset Management); European Assets Trust (F&C Investments); Montanaro European Smaller Companies (Montanaro Investment Managers) Far East excluding Japan Winner Pacific Horizon Investment Trust Trust provider: Baillie Gifford Fund manager: Gerald Smith Contact: 0800 917 2112 Fund size: £109.3 million NAV % performance 5 years: 141.4% Share price % performance 5 years: 214.3% RiskGrade: 40.2 Total expense ratio: 1.38% Fund manager offers own ISA wrapper: Yes Second place: Highly commended Schroder Asia Pacific (Schroders) Other finalists Scottish Oriental Smaller Companies (First State); JP Morgan Asian Investment Trust (JP Morgan); Premier Pacific Income (Premier Fund Managers) Specialist Winner Gartmore Irish Growth Trust provider: Gartmore Fund manager: Gervais Williams Contact: 0800 289 336 Fund size: £156 million NAV % performance 5 years: 270.6% Share price % performance 5 years: 329.35% RiskGrade: 47.3 Total expense ratio: 1.38% Fund manager offers own ISA wrapper: Yes Second place: Highly commended TR Property Investment Trust (Thames River) Other finalists City Natural Resources High Yield (New City Investment Managers); JP Morgan Russian (JP Morgan); Old Mutual South Africa (Old Mutual)
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