The majority of these have also managed to outperform over three- and five-year periods.
Performance of trusts vs benchmarks over 10-yrs
| Name |
1yr (%) |
3yr (%) |
5yr (%) | 10yr (%) |
| Pacific Horizon IT |
-3.26 |
65.64 |
20.42 |
225.11 |
| MSCI AC Asia Pacific ex Japan |
-6.15 |
60.53 |
47.63 |
177.43 |
| Scottish Mortgage IT |
-1.91 |
88.35 |
38.96 |
137.39 |
| FTSE All-World Index |
-0.72 |
46.33 |
20.37 |
59.6 |
| Mid Wynd International IT |
-4.1 |
110.18 |
64.45 |
136.94 |
| Monks Investment Trust |
-6.36 |
47 |
20.87 |
85.31 |
| FTSE World Index |
-0.22 |
45.73 |
19.21 |
55.79 |
| Baillie Gifford Japan Trust |
9.71 |
63.56 |
-10.82 |
75.27 |
| TSE Topix |
4.61 |
15.66 |
-3.72 |
26.85 |
| Edinburgh Worldwide IT |
-4.78 |
75.91 |
28.26 |
71.17 |
| MSCI AC World Index |
-0.37 |
44.98 |
16.85 |
49.33 |
Source: FE Analytics
The largest and highest profile of these – the £1.77bn Scottish Mortgage Investment Trust – has returned 137.39 per cent in the last 10 years, beating its FTSE All World index by 77.79 per cent. Only six open-ended funds have managed to return more than this over the last decade.
As well as topping its IT Global Growth sector in terms of total return, the portfolio, which is headed up by James Anderson and Tom Slater, also has one of the most impressive yield records of any trust in the AIC Investment Companies universe. According to data from the AIC, it has grown its dividend 29 years in a row.
The trust has an annual management charge (AMC) of just 0.32 per cent, making it significantly cheaper than its rivals in the open-ended universe.
Michael MacPhee’s Mid Wynd International IT is also a standout performer. The portfolio has returned nearly 137 per cent in the last 10 years, compared with 55.79 per cent from its FTSE World benchmark. It is also one of the best-performing trusts in the Global Growth sector over three and five years.
Performance of trust vs benchmark over 10-yrs
Source: FE Analytics
The only real weakness over the last decade comes in the five-year figures of Pacific Horizon, Baillie Gifford Japan and Baillie Gifford Shin Nippon. All three have underperformed their respective benchmarks over this period because of a dreadful 2008; however, their three- and 10-year figures are strong.
While the trusts have certainly delivered in the long-term, it should be noted that Baillie Gifford trusts tend to be far more volatile than their benchmarks. As a result, they are suited to investors with a long-term view, who are willing to put up with periods of underperformance in the shorter-term.
The Scottish Mortgage Investment Trust, for example, has delivered more than 275 per cent in the last two decades. In spite of its stellar long-term record, it tends to lose significantly more than its benchmark in market crashes. In 2008 the portfolio was down 44.77 per cent, compared with -19.36 per cent from the FTSE All World index.
James Budden, director of Baillie Gifford, said in a recent interview with FE Trustnet that he expects there to be a big uptake in investment trusts following the implementation of the Retail Distribution Review (RDR).