The fourth quarter of 2015 has dawned upon us already and it seems that the star performers in the Association of Investment Companies universe over the last three months are from a real variety of sectors.
Property and smaller companies trusts have had a particularly good run though, with four of the top 10 performers coming from the property sectors and eight of the top 20 performers in smaller companies sectors.
Table of top 10 performing funds during Q3
Source: FE Analytics
The trust that achieved the best performance over the last quarter was Oryx International Growth, which sits in the IT Global Smaller Companies sector. It has returned 13.59 per cent, outperforming its average peer by 8.54 percentage points and beating its FTSE All Share benchmark by 19.29 percentage points.
Performance of trust vs sector and benchmark over 3 months
Source: FE Analytics
The £95m trust has been headed up by Christopher Mills for more than 20 years and has also outperformed its sector average by more than 1.5 times over this period.
It hasn’t always been plain sailing for the trust though, as it found itself in the bottom decile between 2009 and 2011, as well as in 2013.
The trust, which isn’t geared, is currently trading on a 12.1 per cent discount and has an ongoing charge of 1.81 per cent.
Oryx International Growth is the only global smaller companies trust to have appeared in the top 20 top-performers this quarter, with almost every other smaller companies trust residing in the IT UK Smaller Companies sector following a comparatively strong performance from the FTSE Small Cap index over the last three months.
Performance of indices over 3months
Source: FE Analytics
Chelverton Growth Trust was the strongest in the sector due to its return of 8.54 per cent over the last quarter, which meant it outperformed its peer average more than eight times over following a spike in performance just over a month ago.
In 11th place overall for its performance over the last three months, the £189m trust is managed by David Horner and David Taylor, and has a substantial 74.74 per cent weighting in the services sector.
Despite finding itself in the top quartile over the last one and three months, the trust’s performance has been lacklustre over the longer term, having provided a bottom-decile return over 10 years and a bottom-decile alpha ratio and Sharpe ratio, which measures risk-adjusted performance, to boot.
Chelverton Growth Trust is trading on a 20.8 per cent discount, isn’t geared and has an ongoing charges figure of 2 percent.
The other UK Smaller Companies trusts that have found themselves in the top 20 over the last quarter for performance are Standard Life UK Smaller Companies, Aberforth Geared Income Trust, JP Morgan Smaller Companies and Crystal Amber.
The only other smaller companies trust to make the list is North Atlantic Smaller Companies, which sits in the IT North American Smaller Companies sector and is headed up by Christopher Mills.
The five FE Crown-rated trust has returned 8.54 per cent this quarter and has outperformed its peer average and benchmark by 11.2 and 17.25 percentage points respectively.
Performance of trust vs sector and benchmark over 3months
Source: FE Analytics
The £299m trust is in the top decile for its performance over one and three years, but is in the fifth decile over five years and the bottom decile over 10 years.
North Atlantic Smaller Companies isn’t geared, is trading on a 21.1 per cent discount and has an ongoing charges figure of 1.14 per cent.
Moving away from smaller companies trusts, Tritax Big Box Reit is in second place on the top-performers list having provided a return of 13.09 per cent over the last quarter and also outperforming its peer average in the Property – Direct UK sector more than 13 times over.
It is the only real estate investment trust in the investment trust universe that’s dedicated to investing in large logistics warehouses in the UK, which are otherwise known as ‘big boxes’. Its portfolio consists of household names such as B&Q, Tesco, Next, Sainsbury’s and Loreal among others.
Tritax Big Box Reit is 38 per cent geared, is trading at a 9.4 per cent premium and yields 4.7 per cent. It has an ongoing charges figure of 1.1 per cent.
AXA Property Trust is the next real estate trust on the list in fourth place and has returned 11.73 per cent over the last three months.
The £43m trust is in the IT Property – Direct Europe sector and only has holdings in Germany, Italy and the Netherlands at the moment. It has been managed by Martin McGuire, who previously managed Standard Life Investments’ European property investment programme, since 2007.
The trust’s performance spiked significantly at the end of August, leading to an outperformance of more than 9 percentage points over three months compared to its peer average. The trust is in the third quartile over five years, the second quartile over three years and the top quartile over one year.
Performance of trust vs sector over 3months
Source: FE Analytics
AXA Property Trust Ltd is 60 per cent geared and is trading on a 12.8 per cent discount.
The other two property trusts in the top 10 list are Vinaland and Target Healthcare REIT, which are both in the IT Property – Specialist sector and have provided total returns of 10.10 and 8.63 per cent respectively over the last three months.
Vinaland invests solely in the Vietnamese property market and has its largest weighting in the Ho Chi Minh City region, while Target Healthcare REIT invests in high quality, new and nearly-new UK care homes and other healthcare assets.
Vinaland is trading on a 39.1 per cent discount and is 1 per cent geared while Target Healthcare REIT is trading on a 15.3 per cent premium, is 19 per cent geared and has an ongoing charges figure including its performance fee of 1.82 per cent.
The other trusts in that are in the top 10 list of performers over the last quarter are Northern Investors Company in the IT Private Equity sector, JP Morgan Mid Cap in the IT UK All Companies Sector, 3i Infrastructure in the IT Infrastructure sector and Small Companies Dividend Trust in the UK Equity & Bond Income sector – all of these trusts returned in excess of 9 per cent.
