Looking at the NAV returns of investment trusts on a total return basis strips out the effects of discount volatility on share prices, providing a better idea of the success of the managers.
Our data shows that both large and small cap investment trusts have produced better returns than their open-ended counterparts over this time.
Performance of trusts and funds over 3yrs (NAV)
| Name | Member Of | 3yr returns (%) |
|---|---|---|
| Aberdeen Asian Smaller Companies | IT Asia Pacif exc Japan | 92.9 |
| Scottish Oriental Smaller Companies | IT Asia Pacif exc Japan | 69.4 |
| Aberdeen Asian Income | IT Asia Pacif exc Japan | 66.2 |
| Schroder Oriental Income | IT Asia Pacif exc Japan | 64.2 |
| Newton - Asian Income | Asia Pacific Excluding Japan (85) | 58.82 |
| Aberdeen Global - Asian Smaller Companies | Asia Pacific Excluding Japan (85) | 54.02 |
| First State - Asia Pacific Sustainability | Asia Pacific Excluding Japan (85) | 47.41 |
| L&G - Asian Income | Asia Pacific Excluding Japan (85) | 44.88 |
| Schroder - Asian Income | Asia Pacific Excluding Japan (85) | 43.43 |
| First State - Asia Pacific | Asia Pacific Excluding Japan (85) | 40.6 |
| Pacific Assets Trust | IT Asia Pacif exc Japan | 40.3 |
| First State - Asia Pacific Leaders | Asia Pacific Excluding Japan (85) | 39.05 |
| Schroder - Institutional Pacific | Asia Pacific Excluding Japan (85) | 38.1 |
| Schroder - Asian Income Maximiser |
Asia Pacific Excluding Japan (85) | 37.1 |
| Schroder - Asian Alpha Plus | Asia Pacific Excluding Japan (85) | 36.64 |
| Schroder Asia Pacific | IT Asia Pacif exc Japan | 36.6 |
| Vanguard - Pacific ex Japan Stock Index | Asia Pacific Excluding Japan (85) | 33.63 |
| Baillie Gifford - Pacific | Asia Pacific Excluding Japan (85) | 33.15 |
| Old Mutual - Asia Pacific | Asia Pacific Excluding Japan (85) | 33.13 |
| Edinburgh Dragon Trust | IT Asia Pacif exc Japan | 32.4 |
| Aberdeen New Dawn | IT Asia Pacif exc Japan | 32.4 |
Source: FE Analytics
The best NAV returns have been achieved by the Aberdeen Asian Smaller Companies trust, which has made 92.9 per cent on this basis over three years.
The £397m trust, which has five FE Crowns, is managed by the Asian equities team at Aberdeen, which also takes charge of the $4.82bn Aberdeen Global Asian Smaller Companies fund.
The latter has returned 54.02 per cent to investors over the past three years while its MSCI AC Asia Pacific ex Japan Small Cap benchmark has made 10.46 per cent.
Our data shows that the managers have had more success with their closed-ended portfolio, before discount moves are taken into consideration.
On a share price total return basis, the gap is even wider, with the trust making 130.13 per cent, according to data from FE Analytics.
Performance of trust vs fund and benchmark over 3yrs
Source: FE Analytics
Aberdeen has soft-closed its top-performing emerging markets funds to protect existing investors and some experts have warned that the same could happen to the group's Asia funds.
Our data suggests that investors may wish to consider the trusts, which will never soft-close.
Aberdeen’s trust has beaten Scottish Oriental Smaller Companies, run by rivals First State, into second place.
The trust, which was recently taken over by Angus Tulloch, has made 69.4 per cent in NAV terms over the period.
Aberdeen has also beaten its rival in regard to its income funds, although by a narrower margin.
Aberdeen Asian Income has produced 66.2 per cent over the past three years in NAV total return terms, while the Schroder Oriental Income trust has made 58.82 per cent.
Both have benefited from a strong run for defensive, dividend-paying stocks in their region and have beaten the best open-ended fund in the same space: Newton Asian Income.
The latter has made 58.82 per cent over three years, according to our figures, significantly ahead of L&G Asian Income, which has returned 44.88 per cent.
The Vanguard Pacific ex Japan Stock Index appears high up on the list of the best performers, but it is hard to draw any conclusions from this.
The fund takes the MSCI Pacific ex Japan index as its benchmark rather than the more popular Asia Pacific ex Japan indices.
This index includes Australian and New Zealand stocks, which has helped it outperform the other benchmark, returning 28.46 per cent to the Asian index’s 19.55 per cent.
Performance of indices over 3yrs
Source: FE Analytics
Asian income funds also have high weightings to these countries, supporting their strong returns.
Out of the 20 best performers, only eight are investment trusts, but this represents 40 per cent of the 15 funds.
The average return of the trusts is also much higher, at 38.6 per cent compared with 21.26 per cent. In a recent article, FE Trustnet also showed that managers of investment trusts tend to outperform in the smaller companies sectors as well.
One of the reasons for this could be that managers do not have to worry about keeping money on hand for redemptions and can remain fully invested, which may also have an effect in the Asian region.
Schroders has six funds on the list, more than both Aberdeen and First State. The closed-ended Schroder Oriental Income fund beat Schroder Asian Income.
In share price terms, the outperformance of the investment trusts has been magnified.
Performance of trusts over 3yrs (Share price)
| Name | 3yr returns (%) |
|---|---|
| Aberdeen Asset Managers - Aberdeen Asian Smaller Companies Investment Trust | 130.13 |
| First State Investments IT - Scottish Oriental Smaller Companies | 95.93 |
| Schroder Investments Ltd - Schroder Oriental Income | 69.45 |
| Aberdeen Asset Managers - Aberdeen Asian Income | 63.18 |
| Frostrow Capital LLP - Pacific Assets Trust |
53.22 |
Source: FE Analytics
The best-performing income trust, Schroder Oriental, has made 69.45 per cent while Newton Asian Income, the best-performing income fund, has made 58.82 per cent.
Performance of fund vs trust over 3yrs
Source: FE Analytics
Frostrow Capital’s Pacific Assets Trust saw its NAV returns of 40.3 per cent boosted to 53.22 per cent in share price terms.
In a previous article, FE Trustnet looked at the best-performing UK income managers.
