Interactive Investor

Money Observer Investment Trust Awards 2020: the winners

We unveil the winners and highly commended investment trusts across 15 sectors – and find a number of …

30th April 2020 11:01

by Fiona Hamilton from interactive investor

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We unveil the winners and highly commended investment trusts across 15 sectors – and find a number of returning champions among them.

The winners of Money Observer’s annual Investment Trust Awards are testament to the success of active management and the advantages enjoyed by investment trusts.

Most of our winners have thrashed benchmark returns over the three years under consideration to 31 January 2020 and some for considerably longer periods. Several have boosted returns by deploying gearing and most either focus on smaller companies (as the winners of the Japan, US, Europe, and UK Growth awards all do).

- Investment trusts: winners of the 2020 Monthly Medals

Exciting smaller companies

Others include some exciting smaller companies in a more diversified portfolio, as in the case of the Best Large Trust award winner, Allianz Technology Trust. Straying down the size spectrum in this way is much easier for closed-ended investment companies than for open-ended funds.

When judging the awards, we exclude trusts that have fallen into the bottom quartile of their sector eight or more times in 25 rolling one-year periods (measured monthly), as we think investors are likely to be uncomfortable with such volatility.

We then give priority to trusts that have achieved above-average net asset value (NAV) returns in each of the past three years, as this provides a better guide to future success than if strong three-year figures are attributable to one stellar year.

Our approach has again been validated by the repeat success of a number of previous award winners. Most notable is Scottish Mortgage Trust, which has won ourBest Global Growth Trust award for the sixth successive year; and JPMorgan Emerging Markets Trust, which has won the Best Global Emerging Markets Trust award for the third year running.

Allianz Technology, Scottish American, Finsbury Growth & Income, Montanaro European Smaller Companies, JPMorgan Asian Growth & Income and HgCapital have all retained the awards they won last year.

Better than average

Many of our award winners have suffered steep setbacks since the end of the period under review to 31 January 2020, but they all held up better than average in the 2018 downturn and in many cases have once again proved more resilient than their peers.

Investors who were reluctant to buy into them when they were on premium ratings may now be able to do so at a discount. For those uncertain about timing, drip-feeding purchases means benefiting from pound cost-averaging. The bounce, when it eventually comes, could be steep.

The 2020 roll of honour

Premier Group
Winner: Baillie Gifford
Highly commended: JP Morgan Asset ManagementRead more

Large Trust
Winner: Allianz Technology
Highly commended: Polar Capital TechnologyRead more

Global growth
Winner: Scottish Mortgage
Highly commended: Edinburgh WorldwideRead more

Global Income 
Winner: Scottish American
Highly commended: Securities Trust of ScotlandRead more

UK growth
Winner: BlackRock Throgmorton
Highly commended: JPMorgan Smaller Companies TrustRead more

UK income 
Winner: Finsbury Growth & Income
Highly commended: Murray Income TrustRead more

Emerging markets
Winner: JPMorgan Emerging Markets
Highly commended: Templeton Emerging Markets Trust Read more

Winner: JPMorgan Asia Growth & Income
Highly commended: Schroder Asian Total ReturnRead more

Winner: Montanaro European Smaller Companies
Highly commended: European Opportunities TrustRead more

North America
Winner: JPMorgan US Smaller Companies
Highly commended: JPMorgan American Investment Trust Read more

Winner: Atlantis Japan Growth
Highly commended: Fidelity Japan TrustRead more

Winner: Caledonia Investments
Highly commended: Seneca Global Income & Growth TrustRead more

Winner: Renewables Infrastructure
Highly commended: 3i Infrastructure Read more

Direct UK Commercial Property
Winner: Urban Logistics REIT
Highly commended: GCP Student Living (DIGS) Read more

Private equity and capital growth
Winner: Hg Capital
Highly commended: Oakley Capital Investments Read more

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How the Awards are won

Only investment companies that are recognised by the Association of Investment Companies (AIC) qualify for inclusion.

Our awards are based on an investment company’s net asset value (NAV) total return (i.e. with income reinvested).

Trusts whose NAV returns have fallen into the bottom quartile of their sector eight or more times in 25 rolling one-year periods (measured monthly) are excluded on grounds of excessive volatility.

We rank qualifying trusts in the sector(s) under consideration according to the following weighted result: 40% for annual NAV performance to 31 January 2020, 30% to January 2019, 20% to January 2018 and 10% for the overall three-year NAV return to 31 January 2020. However, in the private equity category, each year’s performance is given equal weight because returns tend to flow through sporadically.

To emphasise consistency, we favour contenders that have been in the top half of the peer group in each of the past three years. Qualitative aspects are also taken into consideration before the final awards are announced.

Note: The data for the awards was sourced from the Association of Investment Companies and Morningstar. All of the ‘Key Facts’ data and charted performance (over a three-year period) pertains to 31 January. 

Premier Group Award

The Premier Group award is open to management groups with a diversified choice of investment companies. We include the returns of all those managed by the group for at least three years, or those that retained the investment manager in the event of a switch. The contribution of each company is calculated on the same weighted three-year basis as the sector-based awards.

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This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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