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So far so good… The best performing trusts of 2015

03 July 2015

Following on from an article earlier this week, FE Trustnet looks at which trusts have achieved the highest absolute and relative returns during the first half of this year.

By Lauren Mason,

Reporter, FE Trustnet

Lindsell Train IT, Henderson Opportunities and SVM UK Emerging have continued their winning streaks into this year, holding the top three spots on the list of highest-performing investment trusts in 2015 so far, according to data from FE Analytics.

As to be expected, the top 10 list is dominated by trusts with large weightings in Japan and smaller companies, as shown in the chart below.

Top performing funds in 2015

Source: FE Analytics

The Japanese market has had a strong 2015, following the continuation of quantitative easing, the re-election of prime minister Shinzo Abe and a dramatic improvement in corporate governance.

In fact, the IT Japan Equities sector is the highest-returning peer group so far this year in the AIC universe, with the average trust returning 18.17 per cent to the end of June.

As such, it’s no surprise that the five FE Crown-rated Lindsell Train IT, run by FE Alpha Manager Nick Train, has done particularly well in the last few months.

The £100m investment vehicle holds its second-largest geographic weighting in Japan at 11.76 per cent and owns Nintendo and the Lindsell Train Japanese Equity fund, managed by Train’s colleague Michael Lindsell, in its top 10.    

However, the trust’s largest weighting is in the UK at 72.13 per cent, holding almost 30 per cent in Lindsell Train Ltd itself. Train also holds 9.4 per cent in soft drink manufacturer A G Barr, 7.1 per cent in alcoholic beverages company Diageo and 5.9 per cent in Unilever.

UK equities had a strong second quarter after the uncertainty created by the general election was removed by a Conservative victory, aiding the trust’s performance.

Despite many UK investors shunning blue chips for mid-cap and small-cap stocks recently, as explored by FE Trustnet last week, Train’s trust has delivered a strong performance this year and has returned a total of 33.46 per cent to the end of June, outperforming its sector average more than five times over.

Performance of trust vs sector in 2015

Source: FE Analytics

However, as to be expected from a trust run by a star manager, it is has proven immensely and is currently trading at a premium of 24.6 per cent.

Lindsell Train IT isn’t geared and yields 1.5 per cent.


 Other trusts that have benefitted from the strength of Japan’s economy this year include Schroder Japan Growth, JP Morgan Japanese IT, Baillie Gifford Shin Nippon and Baillie Gifford Japan Trust.

The preference for large-caps shown in Train’s trust, however, generally comes to a halt from here on, with small-cap trusts boasting particularly strong performances.

Despite this, Aseana Properties, which develops property in Malaysia and Vietnam, has pipped smaller companies investment vehicles to the post with its performance this year, delivering a return of 29.99 per cent to the end of June.

The investment company, which is trading at an 8.6 per cent discount, has a substantial 84 per cent gearing, which could attribute to its high performance.

However, while having high gearing can magnify income and capital returns when the markets are strong, it can also increase losses at times when markets are underperforming.

Aseana Properties is not the only property trust to have done well this year, with £111.1m Independently Managed Taliesin coming in sixth place out of the top-performing trusts this year, returning 24.2 per cent.

The growth of the UK economy has led investors to pour money into property investment vehicles over the last couple of years, with the FTSE 350 Real Estate Investment Trusts index outperforming the FTSE All Share by more than double since 2013.

The thriving UK economy has also benefitted small-cap investment vehicles – more of a household name that has performed well this year is Henderson Opportunities Trust, managed by FE Alpha Manager James Henderson.

The £32m trust, which seeks value opportunities to boost growth, has returned 27.56 per cent this year to the end of June, tripling the performance of its peer average in the IT UK All Companies sector and outperforming the FTSE All Share by 24.54 percentage points.

Performance of fund vs sector and benchmark in 2015

Source: FE Analytics  

Henderson Opportunities is currently trading at a 7.7 per cent discount and yields 1.4 per cent.

SVM UK Emerging, managed by Colin McLean and deputy managed by FE Alpha Manager Margaret Lawson, also seeks long-term capital growth from smaller UK companies and aims to outperform the IA UK All Companies sector average on a total return basis.

This focus has stood the trust in good stead, putting it in fourth place for its total return of 25.53 per cent to the end of June. What’s more, the £4.8m trust is currently trading at a 26.8 per cent discount and isn’t geared.

Baillie Gifford's Edinburgh Worldwide IT, which invests in global small-caps, is also worthy of note for its performance this year, having delivered 24.89 per cent to the end of June.


An article published at the end of last month explored the recent uptick in small-cap and micro-cap performance, following a bout of lacklustre performance from 2014 to March 2015.

Neil Shillito, investment director of SG Wealth Management, told FE Trustnet that he believes this rally could well continue.

“As we’ve just experienced, [small-caps] are affected by macro views, so clearly a lot of the underperformance prior to the election was to do with political uncertainty,” he said.

“Small-caps have underperformed, but they’re coming back now. Why is it coming back? Greater political certainty, and I think the news over the last two days will help with that. Let’s face it, the Greece situation is just papering over the cracks, but markets are by driven short-term sentiment and they don’t look into whether it’s true or not – they just say ‘the sentiment looks good for the next two days’.”

In terms of sector performance this year, IT European Smaller Companies, IT UK Smaller Companies and IT Japanese Smaller companies have come in at second, third and fourth place respectively below the IT Japan Equities sector. 

The IT Biotechnology & Healthcare sector is in fifth place, achieving a return of 13.07 per cent since the start of the year.

This is perhaps unsurprising, following the NASDAQ OMX Biotechnology index’s stellar performance over recent years – over the last three, it has returned 183.28 per cent, outperforming the MSCI World index almost five times over.

Performance of indices over 5yrs

Source: FE Analytics

The main beneficiary from the success of biotech and healthcare investment vehicles this year has been the £221m International Biotechnology Trust, which has returned 21.89 per cent to the end of June.

However, this has been somewhat of a landslide victory compared to the three other investment trusts within the sector, with the Biotech Growth trust returning 16.37 per cent, the Worldwide Healthcare trust returning 11.38 per cent and Polar Capital Global Healthcare returning just 2.89 per cent. 

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.