Investments  

Best performing trusts of the decade named

Best performing trusts of the decade named

A debt-focused investment trust has been named the best performer of the decade after returning almost 1,000 per cent over the past 10 years.

Latest data from the Association of Investment Companies showed Volta Finance, run by Axa Investment Managers, returned 959 per cent in share price terms over the 10 years to December 31, 2019.

This was well above the 197 per cent average return in share price terms from all investment trusts in the AIC universe over the same time period.

The £275m trust takes a multi-asset investment approach on deals which provide it exposure to debt, from corporate credit to mortgages, student loans and car leases.

In general the trusts investing in smaller companies dominated the 10 best performers, accounting for half of the top spots. BlackRock was the most successful fund house with two trusts named on the list.

RankTrustAIC SectorReturns (%)
1Volta FinanceDebt - structured finance958.7
2Lindsell TrainGlobal730.4
3Baillie Gifford Shin NipponJapanese Smaller Companies678.4
4BlackRock Smaller CompaniesUK Smaller Companies622.7
5Henderson Smaller CompaniesUK Smaller Companies621
6Rights & IssuesUK Smaller Companies607.3
7BlackRock ThrogmortonUK Smaller Companies600.5
8Tetragon FinancialFlexible Investment565.7
9Biotech GrowthBiotech & Healthcare541.6
10Polar Capital TechnologyTechnology & Media519.6

In terms of sectors the Biotechnology and Healthcare sector topped the chart, returning an average of 490.8 per cent in share price terms over the past decade.

Trusts focused on investing in smaller companies also delivered strong returns. 

The UK Smaller Companies and Global Smaller Companies sectors were the second and third best performing sectors of the decade and delivered 379 per cent and 330 per cent respectively. European Smaller Companies also featured in the top ten.

RankAIC SectorReturns (%)
1Biotech & Healthcare491
2UK Smaller Companies379
3Global Smaller Companies330
4Private Equity285
5Japan269
6Global264
7UK All Companies259
8North America231
9Infrastructure225
10European Smaller Companies222

Annabel Brodie-Smith, communications director of the AIC, said: “It’s encouraging to see a diverse spectrum of investment company sectors perform so strongly over the last decade. 

“While Biotechnology & Healthcare was the top performing sector by some margin, two UK equity sectors made it into the top ten despite the Brexit referendum and subsequent lack of clarity surrounding the UK’s exit.”

Ms Brodie-Smith said the closed-ended investment company structure lent itself “particularly well” to illiquid investments, pointing out that both the Private Equity and Infrastructure sectors had delivered strong returns.

Jason Hollands, managing director of communications at Tilney, said there was “no big surprises” amongst the top performers.

He said: “The broad theme is that smaller companies across a variety of markets have been amongst the best performing parts of the market. 

“Ironically, this has taken place over a period during which investors have increasingly shunned them in the clamour for passive products that are overwhelming skewed to large-cap companies.”

Mr Hollands thought the more smaller companies were ignored, the greater the potential available for active managers to add value by spotting winners the wider market was yet to discover.

imogen.tew@ft.com

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