Top 20 most consistently performing investment companies over the last decade revealed
The world's 20 most consistently performing investment companies over the past decade have been revealed, in a new study by the Association of Investment Companies (AIC).
A quarter of the top 20 are in the global sector, with the Lindsell Train Investment Trust taking pole position and F&C Global Smaller Companies pulling in second.
Despite looming fears about Brexit, a further 25 per cent of the top 20 have a UK focus with Invesco Perpetual Select UK Equity, Invesco Perpetual UK Smaller Companies, Finsbury Growth & Income, F&C Commercial Property and Threadneedle UK Select Trust all featuring on the list.
“The past decade has been a great period to be overweight in small cap equities. The asset class has done well despite the economic downturn around the global financial crisis, and other economic and political challenges along the way,” said Peter Ewins, fund manager of F&C Global Smaller Companies.
“Most recently we have added to our European exposure and trimmed our US weighting, reflecting the relatively more attractive valuation case and improving economic backdrop in Europe.”
Ewin's F&C fund manages a portfolio of small cap stocks, while the Lindsell Train Investment Trust (LTIT)– managed by Michael Lindsell and Nick Train's Lindsell Train Limited – takes long-term stakes in a small number of quoted companies.
LTIT's share price has recently been trading at a “heady premium” to its net asset value and, according to Lindsell, the fund's chairman has been warning shareholders that this is unlikely to be sustainable.
“But with so much debate within the investment community about interest rates, inflation, Brexit and Trump – none of which we spend much time dwelling on – it seems to be as good a time as any to shelter under the umbrella of a collection of companies with such strong fundamentals,” Lindsell said.
Seven of the investment companies on last year's list retained a place in this year's top 20, including Allianz Technology, F&C Global Smaller Companies, Finsbury Growth & Income, Invesco Perpetual UK Smaller Companies, JPMorgan American, JPMorgan US Smaller Companies and Schroder Oriental Income.
Investment businesses focused on North American smaller companies also performed well, with two of the three operators in the sector – JPMorgan US Smaller Companies and Jupiter US Smaller Companies – making the grade.
Yet investment companies from the Asia Pacific (excluding Japan) were down on last year, with three featuring as opposed to five. Edinburgh Dragon, Schroder Oriental Income and Aberdeen Asian Income all slotted into the top 20.
The AIC used Morningstar data to rank its member investment companies by discrete annual returns, and benchmarked outperformance against the overall average investment company. Where two companies had the same consistency score, volatility of returns was used to differentiate between them.