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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 years to the end of last 2006, while the average unit trust increased by 45%.
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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