Join our community of smart investors

Investment trust portfolio: Sticking with my growth mandate

John Baron reflects on another good year for the portfolios, suggests some pointers for 2021 and explains fourth-quarter changes
Investment trust portfolio: Sticking with my growth mandate

After a particularly challenging year for many, it is pleasing to report a good set of portfolio figures. While the FTSE All-Share index produced a return of minus 9.82 per cent, and the MSCI PIMFA Growth and Income benchmarks returned 2.22 per cent and 1.94 per cent respectively, the Growth and Income portfolios produced returns of 14.22 per cent and 6.07 per cent. As usual, all performance figures are calculated on a total return basis and portfolio figures include all costs. While never complacent, these figures reinforce the portfolios’ long-term record of outperformance as we enter the New Year.

In general, both portfolios’ performance was assisted by their ‘growth’ focus. The most recent substantive explanation for this investment approach being provided by the column ‘Remaining focused on the long term’ (7 August 2020). A bias towards smaller companies and the technology sector both home and abroad helped. The columns ‘Retaining faith in technology’ (9 August 2019) and ‘Retaining trust in smaller companies’ (8 November 2019) help to explain why the portfolios remain committed to these sectors and themes.

Indeed, to the extent portfolio remits and balance permit, all nine real investment trust portfolios managed on the website – including the two covered in this column – will continue to pursue a growth mandate and seek the extraordinary companies which history suggests account for most market returns over time. Such an approach has helped some of these portfolios produce returns of over 24 per cent last year.

To continue reading...
Register for free
Read 3 articles for free each month
Have an account? Sign in