However, since each of the funds have moved to limit inflows – either by increasing charges or blocking new investment entirely – investors have been forced to look elsewhere for similar exposure.
Here are some investment trusts that can be used for this purpose.
Aberdeen Emerging Markets
Peter Walls, manager of the Unicorn Mastertrust, says that while Aberdeen is big on the investment trust side in Asia, it does not have a closed-ended equivalent of its emerging markets fund.
Walls recommends the Templeton Emerging Markets trust, headed up by veteran manager Mark Mobius, as an alternative.
"It’s on a discount that’s quite wide," Walls said. "Over the last few years it’s been on an average discount of 7 per cent and now it’s at 8.4 per cent. I wouldn’t get too excited but there’s a slightly better value to buying it."
Winterflood’s Kieran Drake also tips the Templeton trust as a good alternative to the Aberdeen fund.
"It’s managed by Mark Mobius who’s got a long track record and it’s a big, liquid fund," he said.
Over the last decade, the trust has outperformed Aberdeen Emerging Markets, returning 623.3 per cent while the fund has made 612.85 per cent.
However, the trust has underperformed the fund over one, three and five years.
Performance of trust vs fund
| Name | 1 yr (%) | 3 yrs (%) | 5 yrs (%) | 10 yrs (%) |
|---|---|---|---|---|
| Templeton Emerging Markets IT | 8.34 | 14.1 | 70.8 | 623.3 |
| Aberdeen Emerging Markets | 13.35 | 29.14 | 94.66 | 612.85 |
Source: FE Analytics
According to the AIC, the trust is trading on a discount of 8.4 per cent with no gearing. It has a yield of 0.9 per cent.
The trust is also marginally cheaper than the fund, with ongoing charges of 1.31 per cent.
The £4.1bn Aberdeen fund has an ongoing charges figure (OCF) of 1.75 per cent.
Trojan Income
With the five crown-rated Trojan Income fund set to soft close in May, investors will have to look elsewhere for exposure to FE Alpha Manager Francis Brooke’s expertise.
Walls says a good alternative is the manager’s Troy Income & Growth trust, which has many of the same top holdings as the open-ended fund.
The trust is trading on a premium of 0.9 per cent, with no gearing. It has a yield of 3.7 per cent, compared with 4.09 per cent from the fund.
The trust has ongoing charges of 1.22 per cent.
Lizzy Moir, analyst at Charles Stanley, says another good alternative to the Troy fund is the Perpetual Income & Growth trust.
Unlike the Troy trust, the Perpetual vehicle is trading on a discount of 2.3 per cent, but is geared at 15 per cent. It has a slightly lower yield, at 3.4 per cent.
However, it is cheaper, with ongoing charges of 1.15 per cent, including the performance fee.
Over the last one, three and five years the Perpetual Income & Growth IT has outperformed the Trojan Income portfolio.
Since Brooke took over the Troy Income & Growth trust in 2009, it has performed in line with the open-ended fund.
Over the last three years, the fund has made 41.21 per cent, while Brooke’s trust has gained 40.82 per cent. The Perpetual trust made 65.16 per cent over the period.
Performance of trusts vs fund over 3 yrs
Source: FE Analytics
The Troy trust is the least volatile of the three portfolios, with an annualised score of 9.09 per cent over three years. The fund has a score of 9.14 per cent, while the Perpetual trust is at 10.65 per cent.
Findlay Park American
Walls says replacing this fund is difficult but the F&C US Smaller Companies and JPMorgan US Smaller Companies trusts are good alternatives.
"The numbers do look pretty good against that small peer group," he said.
Over the last decade, the F&C US Smaller Companies IT came the closest to the four crown-rated Findlay Park American portfolio, returning 325.66 per cent. It has outperformed the fund over one, three and five years.
The JP Morgan US Smaller Companies IT has made 237.15 per cent over 10 years. It has outperformed the Findlay Park fund over three years.
Performance of trusts vs fund over 10yrs
Source: FE Analytics
The F&C trust is trading on a premium of 4.1 per cent, meaning investors are buying it at a higher level than the value of the underlying assets. It has no gearing, and ongoing charges of 1.12 per cent.
The JP Morgan trust is trading on a wide discount of 11.1 per cent, with 10 per cent gearing.
It is slightly more expensive than the F&C portfolio, with ongoing charges of 1.81 per cent.
Drake recommends the JP Morgan American trust, which has made 163.91 per cent over 10 years.
"We do rate the manager highly and think it’s a good option," he said.
The trust is trading on a premium of 1.1 per cent and is geared at 9 per cent. It has a yield of 1.2 per cent. It has ongoing charges of just 0.73 per cent.