Around the world in 8 trusts

So to test the breadth of global opportunities available and the quality of the trusts on offer, we've embarked on an around-the-world investment trust tour following in the footsteps of famous fictional 19th-century adventurer Phileas Fogg. While it took a £20,000 wager (£1.86m in today's money) to encourage Mr Fogg to set out across the channel, a far more modest flutter is needed for anyone wanting to embark on a journey with the trusts highlighted by our Around-The-World stock screen.

We're actually taking one detour from Mr Fogg's around-the-world route to take in the emerging European region, which he neatly bypassed on his 80-day tour. That aside, we start, like Mr Fogg did, in the UK looking for a UK growth trust to get us on our way. Popping over the channel we'll visit Europe. Then it's on to the emerging markets, including our little diversion to emerging Europe. Mr Fogg's stop off in Hong Kong lets us take in the Asia Pacific ex Japan market, before we venture to the land of the rising sun itself. From there we're off to North America and then back to Blighty to find a nice little UK income play. So, without further ado, let the journey commence.

UK GROWTH

Trusts screened: 12

Artemis Alpha (ATS) is not an ordinary UK growth investment trust. While most of the companies it invests in are listed in the UK, most of their businesses are focused on overseas markets. The fund, managed by two star managers - John Dodd and Adrian Patterson - also invests in smaller companies, which made up three-quarters of the portfolio at the end of August.

There is a big focus on oil and gas, too - two-fifths of holdings come from this sector. And the trust is happy to take big bets, with the top two holdings at the end of August - North Sea oil explorer Hurricane Exploration and Irish explorer Providence Resources - accounting for 13 per cent of the portfolio between them. Nevertheless, according to Morningstar data, the standard deviation (a measure of the variability of returns) on the trust's performance over the past three years is below the sector average of 16 per cent at 13.5 per cent.

For investors wanting a more mainstream option, the highest-scoring such trust from our screen was Fidelity Special Values (FSV). The high score was chiefly due to a very strong run by the shares this year rather than the longer-term record, which takes in the tenure of fund management star Anthony Bolton.

Artemis Alpha (ATS)

EUROPE

Trusts screened: eight

Sometimes it can be worth paying a high price for shares in the right investment trust. Based on our screening results, this could be the case with Jupiter European Opportunities (JEO). While the shares are very expensive compared with the one-year average discount, its exceptional outperformance of its peer group has more than offset this. Performance has been particularly strong this year, with the shares returning 47.6 per cent compared with an average for the peer group of 20.6 per cent.

The trust's highly respected manager, Alexander Darwall, focuses on buying companies with great structural growth opportunities, strong market positions and a broad international exposure. The fund pays little attention to the geographic allocations of the index, focusing instead on the characteristics of the stocks it buys. Mr Darwall believes Europe has significant advantages in certain areas, such as healthcare and technology, and believes the eurozone crisis has emphasised this. After such a strong recent run and sharp narrowing of the discount, there is the potential for disappointment should performance falter, especially as high gearing magnifies the trust's investment performance. For investors put off by this and for those who want exposure to Europe excluding the UK, then Henderson Eurotrust (HNE) is an alternative and the next highest scoring European trust from our screen. While it offers significantly less in terms of historical outperformance, the current discount of 11.9 per cent is broadly in line with the sector average and is on par with its own one year average.

Jupiter European Opportunities (JEO)

EUROPEAN EMERGING MARKETS

Trusts screened: 2

The majority of Eastern European Investment Trust (EST)'s investments are in Russia, which accounted for 61 per cent of its geographical exposure at the end of August. There are many questions about corporate governance in the region, its stock market is volatile and illiquid, and industry is dominated by resources companies. That said, the actual economy looks encouragingly robust at the moment, compared with other developing-market 'stars' and the region represents one of the few global bright spots for consumer spending.

The trust's next big exposure is Turkey - 16.5 per cent of the portfolio. While the ongoing troubles in neighbouring eurozone counties are a concern, there is a strong, albeit contrarian, value argument for investment in emerging Europe. Indeed, as the fund's manager, BlackRock's frontier markets expert Sam Vecht, points out "emerging European equity valuations have rarely been as cheap, relative to the region's own history, with some highly profitable companies trading as low as three times earnings". Companies in the region have also been buying back shares recently. It should be noted that only two trusts invest in this region and it is the most niche play in our around-the-world tour.

Eastern Europe IT (EST)

GLOBAL EMERGING MARKETS

Trusts screened: seven

Templeton Emerging Markets (TEM), managed by respected emerging market veteran Mark Mobius, is the granddad of the sector and also the top pick from our screen. It is the shares' low valuation relative to the one-year average which gives it top spot. Indeed, the fund has been comprehensively outperformed by Genesis Emerging Markets over every period we've measured, however Genesis is trading on a premium to NAV of 2.7 per cent, compared with Templeton's one-year average discount of 6.9 per cent. At the end of August, just over a quarter of Templeton's exposure was to China including Hong Kong, so the recent easing of concerns about the region's prospects are to be welcomed. Other big bets in the portfolio are Brazil, which accounts for 15 per cent of assets and Thailand at 14 per cent.

Templeton Emerging Markets (TEM)

ASIA PACIFIC

Trusts screened: 14

Aberdeen Asset Management's star fund manager Hugh Young is considered by many to be the UK's doyen of investing in the region. Indeed, his Aberdeen Asian Smaller Companies (AAS) investment trust comes out head-and-shoulders above the competition, but it loses big points for the high rating of its shares - a whopping 9.4 per cent premium compared with a one-year average premium of 0.1 per cent.

Mr Young has a reputation as a canny stock-picker so, even though his latest statement on the outlook for the region predicted muted earning reports and broker downgrades, he is confident about the trust's prospects. There is little relationship between the trust's geographic exposure and that of the index, with Malaysian investments making up 21 per cent of the portfolio at the end of August. Being a smaller companies fund, the risks associated with it are notionally higher than larger company funds, although, according to Morningstar the standard deviation of performance over the last three years of 13.7 per cent has been below the peer group average of 15.8 per cent. For exposure to the large-cap end of the market, Edinburgh Dragon (EFM) was the top scoring such trust from our screen.

Aberdeen Asia Smaller Cos (AAS)

JAPAN

Trusts screened: 8

A focus on Japanese smaller companies has helped Baillie Gifford Shin Nippon (BGS) make it to the top of our list. The trust specialises in finding companies with better-than-average growth prospects in what is often seen as a no-go country by investors. While Japan's two-decade long stagnation is the stuff of legend, there are at least grounds to argue that its market finally now looks relatively cheap. Indeed, it has been trading at or around book value for a number of years. So while the country's stock market has had a history of false dawns during its mammoth bear market, at least there are some grounds to hope prices will not go much lower from here. For investors that are not keen on the trust's smaller company bias, the best-scoring Japanese larger company fund identified by our screen was Shin Nippon stablemate Baillie Gifford Japanese (BGFD). What's more, the 10.5 per cent discount on the larger-company fund looks cheap compared with its one-year average discount of 8.9 per cent, which contrasts with an expensive looking Shin Nippon trading at a 1.3 per cent premium compared with a 3.9 per cent average discount.

Baillie Gifford Shin Nippon (BGS)

NORTH AMERICA

Trusts screened: 6

It's surprising that the world's biggest economy is not better represented in the investment trust sector. We've only had six trusts to run through our screen, one of which is focused on Canada. Again, a smaller-companies fund has come out on top, F&C US Smaller Companies (FSC). The presidential election and the spectre of the fiscal cliff are causing uncertainty and anxiety about the outlook for the US, but there are also reasons to feel positive about signs of an ongoing economic recovery and the shale gas boom in the region. The F&C fund tries to target companies with strong market positions and high levels of management ownership. The highest-scoring larger-company trust from the screen was JP Morgan American, which trades at a premium of 1.9 per cent to NAV compared with a one-year average of 2.4 per cent.

F&C US Smaller Companies (FSC)

UK INCOME

Trusts screened: 27

A very simple idea lies behind the investment success of Nick Train, manager of our screen's top-scoring income fund, Finsbury Growth & Income (FGT): if you hold a portfolio of high-quality companies "good things will happen". The trust tends to buy shares in businesses with long track records, excellent brands and business franchises, and often a good level of family ownership. Among the "good things" that happen are high levels of dividend growth and good levels of underlying earnings growth. Mr Train believes we are in a bull market, especially for technology and growth companies, even if most investors have not woken up to it yet. Mr Train's passion for brands means the trust has a strong focus on consumer goods and consumer services. The trust is also not afraid to take big positions in individual stocks, with drinks giant Diageo accounting for 11.4 per cent of assets as of the end of September.

Finsbury Growth & Income (FGT)

Note: Data for tables as at 30 Sep 2012. Source: Morningstar, Numis Securities, Company