Scottish Oriental Smaller Companies IT – discount of 6.6%
It’s not often that investors can get exposure to star manager Angus Tulloch on the cheap, but this is exactly what you’d get if you snapped up the Scottish Oriental Smaller Companies trust at the moment. At 6.6 per cent, according to data from the AIC, its discount is around average for a portfolio in the IT Asia Pacific ex Japan sector, and its biggest rival – Aberdeen Asian Smaller Companies trust – is only trading on -0.9 per cent.
Tulloch recently took the reins of the trust following the departure of long-standing manager Susie Rippingall. He is one of the most highly rated emerging market managers across the open and closed-ended universes, delivering 376.83 per cent over the last decade – more than 100 per cent more than his peer group composite, with less volatility.
Performance of manager versus peer group composite over 10yrs
Source: FE Analytics
This is not to say, however, that the trust is in need of a turnaround in performance. Under Rippingall, it has delivered 495.95 per cent over ten years, compared to 240.7 per cent from its MSCI AC Asia Pacific ex Japan benchmark.
It has also significantly outperformed over a one, three and five year period, and in spite of its small-cap focus, the portfolio has also been less volatile. Only the Aberdeen Asian Smaller Companies trust has a better record in the sector over these periods.
Performance of trust and index
| Name | 1yr (%) | 3yrs (%) | 5yrs (%) | 10yrs (%) |
| Scottish Oriental Smaller Companies | 0.05 | 106.26 | 108.76 | 495.95 |
| MSCI AC Asia Pac ex Japan | -7.06 | 34.62 | 36.19 | 240.70 |
Source: FE Analytics
Scottish Oriental Smaller Companies is significantly underweight China and India, and overweight Malaysia, Philippines and Indonesia. In a recent interview with FE Trustnet, Tulloch voiced concerns over Chinese growth in the medium term.
The trust has a total expense ratio (TER) of 1.65 per cent.
Templeton Emerging Markets IT – discount of 7.4%
Headed up by industry legend Dr. Mark Mobius, the £1.9bn Templeton Emerging Markets IT is available at a discount of 7.4 per cent – just slightly under the 8.6 per cent IT Global Emerging Market sector average.
The portfolio has had a tough time in the last year, falling 17.23 per cent compared to the 10.83 per cent of its benchmark. However, Mobius’ record in the long term is extremely strong, and the trust could be an attractive prospect for those with a 10 year-plus time horizon.
Performance of trust and index over 10yrs
Source: FE Analytics
According to FE data, Templeton Emerging Markets has returned 516.46 per cent, outperforming the MSCI EM index by more than 200 per cent. Only the Genesis Emerging Market Trust has returned more over this period.
Mobius’ trust also beats its benchmark over three and five years, with returns of 38.28 and 48.6 per cent respectively. The manager currently has significantly overweight positions in Brazil, Thailand and Indonesia, all of which have more than a 10 per cent weighting.
The trust has a TER of 1.31 per cent.
Both trusts featured in the study have five FE crowns. All discount data is according to the Association of Investment Companies (AIC).