Asian and emerging market investment trusts have been the strongest performers among investment trusts in terms of share price total return since the Brexit vote, while UK-focused small- and mid-cap trusts dominated the poorest performers, according to new research by Numis Securities.
Trusts focusing on Asian and emerging markets took nine out of the top 10 spots, with JPMorgan Chinese Investment Trust (JMC) topping the table with a 30.7 per cent share price total return. JPMorgan Global Emerging Markets Income Trust (JEMI) and JPMorgan Indian Investment Trust (JII) came second and third with returns of 29.1 per cent and 27.3, respectively.
Ewan Lovett-Turner, director of investment companies research at Numis, said: "The best-performing funds have been in Asia/emerging markets, benefiting from strong local markets (MSCI Asia ex Japan Index is up 10 per cent since 23 June in local currency terms) and the weakness of sterling (down 10 per cent versus the US dollar)."
And Gavin Haynes, managing director at Whitechurch Securities, added that emerging "markets have proved to be insulated from Brexit and the performance is indicative of investor sentiment being much more positive as fundamentals are improving, particularly across the Bric (Brazil, Russia, India and China) economies. These trusts will also have benefited from currencies strengthening versus sterling post-referendum".
At the other end of the scale, the weakest performing trust was JPMorgan Mid-Cap Investment Trust (JMF), which has lost 6.2 per cent since the vote. It was followed by P2P Global Investments (P2P) and VPC Speciality Lending Investments (VSL), which delivered respective negative returns of 5.5 and 4.9 per cent. Mr Lovett-Turner explained that UK mid- and small-cap trusts were hit by weak investor sentiment following the vote.
"Other laggards include debt funds that have suffered from a derating, such as P2P Global Investments and VPC Specialty Lending Investments, as well as hedge funds BH Macro (BHMG) and BH Global (BHGG), and BlackRock Income Strategies (BIST), which hedges overseas currency exposure and reduced equity exposure earlier in 2016," he added.
Mr Haynes said that there has been a clear trend of areas focused on the UK economy performing poorly. "This is evident in trusts focused on mid-caps and UK commercial property," he said. "Both were sold off heavily immediately post-referendum, although have recovered most of their losses as investors sought bargains in oversold areas."
However, he cautioned: "The period [since the referendum] does provide a bellwether for investor sentiment, but I don't think it would be fair to judge a trust based on such a short period. Britain's vote to leave the European Union (EU) was a 'black swan' that provided a shock to markets and not many predicted the outcome, so it would not be a time period that I would place much emphasis on to assess manager skill."
But Mr Lovett-Turner thinks it can sometimes be helpful to look at short periods of investment performance. "It's always interesting during periods of volatility to see how funds react to get a picture of their risk and return profile, and assess whether the fund's going to be a safe haven in times of stress or more of a bull market holding," he said. "So, it can be useful to look at funds' performance over these short periods of volatility, but of course it's the returns over the long term that make the big difference."
Best performing investment trusts since Brexit
| Trust | Discount to NAV (%) | Performance since 23-June | 1-year share price return | 3-year cumulative share price total return | 5-year cumulative share price total return | 10-year cumulative share price total return |
|---|---|---|---|---|---|---|
| JPMorgan Chinese (JMC) | -16.2 | 30.7% | 37.1% | 37.7% | 51.4% | 181.2% |
| JPM Global Emg Mkts Inc (JEMI) | -0.3 | 29.1% | 33.2% | 14.5% | 41.9% | na |
| JPMorgan Indian (JII) | -9.8 | 27.3% | 36.5% | 114.1% | 77.8% | 153.9% |
| JPMorgan Asian (JAI) | -13.8 | 26.0% | 39.9% | 39.2% | 43.8% | 130.2% |
| Fidelity China Special Sits (FCSS) | -14.9 | 25.3% | 54.6% | 88.9% | 119.8% | na |
| BlackRock Latin American (BRLA) | -12.6 | 24.4% | 40.2% | 1.6% | -16.1% | 64.0% |
| Invesco Asia (IAT) | -12.0 | 24.1% | 40.2% | 52.6% | 67.5% | 229.3% |
| Allianz Technology (ATT) | -7.0 | 23.8% | 30.0% | 57.3% | 135.5% | 258.7% |
| Schroder AsiaPacific (SDP) | -12.3 | 23.5% | 35.0% | 43.0% | 75.7% | 213.8% |
| Templeton Emg Mkts (TEM) | -10.8 | 22.9% | 45.4% | 13.4% | 9.5% | 140.1% |
| Lindsell Train IT (LTI) | 50.3 | 22.9% | 55.4% | 132.7% | 272.9% | 573.0% |
| Asian Total Return (ATR) | -5.7 | 22.7% | 45.0% | 44.6% | 59.6% | 182.8% |
| Henderson Far East Inc (HFEL) | 0.3 | 22.6% | 34.1% | 28.2% | 56.0% | 180.1% |
| Riverstone Energy (RSE) | -11.7 | 22.5% | 21.5% | na | na | na |
| Polar Capital Technology (PCT) | -7.5 | 21.7% | 31.9% | 64.6% | 133.8% | 235.8% |
| Schroder Oriental Income (SOI) | -0.3 | 20.4% | 35.8% | 37.0% | 88.8% | 272.0% |
| Biotech Growth Trust (BIOG) | -6.9 | 20.2% | -9.0% | 68.6% | 309.7% | 522.0% |
| JPMorgan Emerging Mkts (JMG) | -11.1 | 19.9% | 36.9% | 32.0% | 41.9% | 144.5% |
| Aberdeen New Dawn (ABD) | -13.8 | 19.9% | 25.8% | 8.3% | 26.3% | 139.3% |
| Pacific Horizon (PHI) | -12.4 | 19.9% | 36.5% | 38.8% | 49.7% | 115.6% |
| BlackRock World Mining (BRWM) | -13.2 | 19.6% | 44.2% | -27.9% | -43.8% | -4.2% |
| EP Global Opportunities (EPG) | -3.7 | 19.4% | 20.5% | 30.3% | 90.1% | 94.1% |
| Fidelity Asian Values (FAS) | -11.3 | 19.3% | 53.0% | 61.9% | 80.8% | 243.3% |
| British Empire (BTEM) | -10.3 | 19.2% | 25.9% | 23.8% | 37.7% | 49.9% |
| Herald (HRI) | -19.9 | 19.1% | 18.0% | 34.8% | 85.7% | 145.6% |
Source: Numis Securities as at 06/09/16.
Worst performing investment trusts since Brexit
| Trust | Premium/ Discount to NAV (%) | Performance since 23-Jun | 1-year share price return | 3-year cumulative share price total return | 5-year cumulative share price total return | 10-year cumulative share price total return |
|---|---|---|---|---|---|---|
| JPMorgan Mid Cap (JMF) | -8.8 | -6.2% | -0.1% | 54.7% | 191.0% | 128.1% |
| P2P Global Investment (P2P) | -18.4 | -5.5% | -15.8% | na | na | na |
| VPC Specialty Lending (VSL) | -18.6 | -4.9% | -14.3% | na | na | na |
| BH Macro - £ (BHMG) | -12.8 | -4.1% | -8.9% | -12.8% | -5.6% | na |
| Independent IT (IIT) | -4.4 | -4.1% | 11.5% | 59.7% | 111.6% | 91.4% |
| Majedie (MAJE) | -10.8 | -4.1% | 2.1% | 70.6% | 126.9% | 23.3% |
| Schroder UK Mid Cap (SCP) | -17.9 | -3.9% | -5.1% | 10.9% | 105.0% | 173.6% |
| BlackRock Income Strategies (BIST) | -8.6 | -3.8% | -7.8% | -2.6% | 26.1% | 39.0% |
| BH Global - £ (BHGG) | -10.3 | -3.1% | -5.2% | 3.7% | 5.8% | na |
| DW Catalyst - £ (DWCG) | -12.4 | -2.9% | -15.1% | -10.3% | 2.4% | na |
| Standard Life Equity Income (SLET) | -6.0 | -2.7% | -7.8% | 18.2% | 86.6% | 106.5% |
| Electra Private Equity (ELTA) | -15.6 | -2.5% | 26.4% | 80.9% | 199.6% | 210.9% |
| Alcentra Euro Floating Rate Inc (AEFS) | -8.0 | -2.5% | -2.2% | 4.0% | na | na |
| Mercantile (MRC) | -10.0 | -1.5% | 2.8% | 33.3% | 118.4% | 123.4% |
| Standard Life Inv Property Inc (SLI) | 5.3 | -0.9% | 2.4% | 51.2% | 93.6% | 22.9% |
| Fidelity Special Values (FSV) | -10.2 | -0.6% | 2.6% | 22.9% | 135.7% | 129.3% |
| Ecofin Water & Power Opps (ECWO) | -18.0 | -0.6% | 17.4% | 26.6% | 51.0% | 47.9% |
| Diverse Income (DIVI) | -2.1 | -0.6% | 1.4% | 35.0% | 123.1% | na |
| ICG Longbow UK Property Debt (LBOW) | -2.5 | -0.5% | 0.5% | 15.6% | na | na |
| BlackRock Smaller Cos (BRSC) | -16.8 | -0.3% | -3.9% | 29.4% | 114.3% | 249.8% |
| F&C UK Real Estate (FCRE) | -3.4 | -0.3% | -4.6% | 45.2% | 69.6% | 48.9% |
| Woodford Patient Capital (WPCT) | 1.8 | -0.2% | -17.0% | na | na | na |
| BlackRock Throgmorton Trust (THRG) | -17.8 | 0.1% | -0.9% | 29.0% | 107.3% | 162.9% |
| Aberforth Smaller Cos (ASL) | -14.0 | 0.1% | -9.4% | 18.4% | 119.3% | 117.6% |
| Baillie Gifford Shin Nippon (BGS) | -1.0 | 0.3% | 36.3% | 78.4% | 198.5% | 143.7% |
Source: Numis Securities as at 06/09/16.
