A little over a year ago, the AIC set out the 30-year returns for the trusts that have been with us for 70 years or more. The data has just been updated so let’s see what impact the events of the last year have had.
I covered last year’s release in this article if you want to look at the previous version. It was created to honour the 70 years of Queen Elizabeth II’s reign while the updated list goes back to the birth of King Charles III but both lists essentially cover the same trusts.
There are 36 trusts on the latest list and they were launched between 1868 and 1947. 3i, which was launched in 1945, wasn’t on the first list but is included this time. However, there is only return data for 3i available back to the start of 1995 that I can find freely available, so its figures are for 28 and a bit years not the full 30.
The 36 trusts are predominantly equity trusts investing in either the UK or globally as regional specialisation and alternative assets are more recent developments.
All the return data below is based on share price total returns, so it includes reinvested dividends and any costs charged within the trust itself (i.e. not dealing charges or admin charges levied by any investment platform).
I’ve added rows for the average of all trusts plus the FTSE All-Share and FTSE World although trackers following these indices would have returned slightly less due to their own internal costs (trackers didn’t really exist in the UK back in 1993 either but that’s another issue).
I reckon there are 85 trusts that have a 30-year track record at this point so this list of veterans represents just under half of that wider group. Only around a dozen trusts that launched in the 1950s, 1960s, and 1970s are still with us today so most of the other trusts that have a 30-year track record but that aren’t on this list date back to the 1980s and early 1990s.
However, if you’re looking for the likes of Personal Assets, Capital Gearing, Caledonia, RIT Capital Partners, Mid Wynd, JPMorgan Claverhouse, Lowland, and private equity trusts like Pantheon, ICG Enterprise, and HgCapital, that’s the reason they don’t appear. A number of these younger trusts have produced better returns than those shown below — HgCapital, Rights & Issues, ICG Enterprise, Fidelity European, and North Atlantic Smaller Companies have all returned between 13 and 15% a year over the last three decades.
Survivorship bias is something to be aware of when looking at any long-term data like this. This list only includes trusts still in existence today and not those that have been wound up or merged into other trusts. Surviving trusts are likely to be the best performers over the long term so looking back at their return data alone gives a flattering view of how the average investor of the time would have done. Unfortunately, we don’t know the extent of the, er, flatterence.
About 30% of trusts that were in existence in early 2007 are no longer with us. A similar pattern of decline would suggest that only around a quarter of trusts that were around 70 years ago have survived until today. Fewer new trusts seem to have been launched between the end of the Second World War and the end of the 1970s, suggesting the actual survival rate could be somewhat higher.
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Nearly all the trusts will have changed individual managers over the last three decades (I think Job Curtis at City of London is the only manager to have managed one of these trusts for the full 30 years) and many of them will have changed investment management firms as well.
I don’t think many of these trusts have changed their main investment focus over the last few decades. Baillie Gifford China Growth used to be an Asian Pacific fund up until a few years ago but that’s probably the most radical change I can think of looking down the list. It’s more of a tweak than a big shift and it only happened quite recently.
The best-performing old-timers
That’s enough pre-amble. Let’s get stuck into the data. Here is the list, sorted by 30-year annualised performance. You can click on all the column headers to change the sort order:
|Company name||AIC sector||Launched||10 years||20 years||30 years|
|TR Property||Property Securities||1905||8.0%||11.8%||12.6%|
|Canadian General Investments||North America||1930||12.3%||11.9%||11.9%|
|Henderson European Focus||Europe||1947||10.6%||12.4%||11.6%|
|BlackRock Smaller Companies||UK Smaller Companies||1906||9.9%||15.6%||11.3%|
|3i Group||Private Equity||1945||22.8%||15.4%||11.0% *|
|Finsbury Growth & Income||UK Equity Income||1926||9.5%||13.3%||10.7%|
|Law Debenture||UK Equity Income||1889||9.9%||11.7%||10.4%|
|Mercantile||UK All Companies||1884||7.9%||11.5%||10.4%|
|JPMorgan American||North America||1881||14.5%||12.2%||10.3%|
|JPMorgan Global G&I||Global Equity Income||1887||13.7%||12.8%||9.9%|
|Hansa Investment Company||Flexible Investment||1912||2.8%||8.9%||9.8%|
|Global Smaller Companies||Global Smaller Companies||1889||8.1%||13.9%||9.7%|
|JPMorgan European G&I||Europe||1929||10.5%||11.0%||9.5%|
|Murray International||Global Equity Income||1907||6.2%||12.1%||9.5%|
|Investment Company||Flexible Investment||1868||6.9%||6.7%||9.4%|
|Temple Bar||UK Equity Income||1926||4.7%||9.2%||8.9%|
|Average of all trusts||–||–||8.8%||10.6%||8.8%|
|FTSE World (Index)||Global||1986||11.5%||10.5%||8.5% *|
|Merchants||UK Equity Income||1889||8.9%||9.7%||8.4%|
|Scottish American||Global Equity Income||1873||12.2%||11.6%||8.2%|
|City of London||UK Equity Income||1891||6.7%||9.2%||8.2%|
|Henderson Far East Income||Asia Pacific Equity Income||1930||3.4%||9.0%||8.2%|
|Murray Income||UK Equity Income||1923||6.1%||8.9%||7.8%|
|Dunedin Income Growth||UK Equity Income||1873||6.3%||8.5%||7.4%|
|FTSE All-Share (Index)||UK||1962||6.4%||7.9%||7.4% *|
|Edinburgh||UK Equity Income||1889||6.1%||9.9%||7.3%|
|Henderson Smaller Companies||UK Smaller Companies||1887||9.2%||14.2%||7.3%|
|Shires Income||UK Equity Income||1929||6.4%||10.0%||6.4%|
|abrdn Diversified I&G||Flexible Investment||1898||1.1%||4.9%||4.3%|
|Baillie Gifford China Growth||China / Greater China||1907||2.3%||7.8%||3.9%|
* the start of the data for 3i is January 1995 and for the FTSE World and FTSE All-Share indices it is January 1994. The figures in the 30-year column for these items have been annualised from those dates instead.
We have a new leader in this updated list with TR Property taking over from Scottish Mortgage. TR Property didn’t have a great year last year but Scottish Mortgage did much worse. This, combined with a slightly different start date, is enough to drag Scottish Mortgage’s annualised return down from 14.7% to 11.7%. The average for all trusts over the last 30 years has dropped quite a bit, from 10.0% last time to 8.8%.
In fact, the start date of April 1993 has shifted quite a few things around, primarily because the 20-year data now starts in April 2003, the nadir of the dot-com bear market. That’s helped the 20-year record of the ‘growthier’ trusts on this list compared to the previous start date of February 2002. You could argue that April 1993, April 2003, and April 2013 all marked relative low points for market returns although 1993 and 2013 were less extreme than 2003. As for April 2023, only time will tell…
Canadian General Investments, Henderson Euro Focus, JPMorgan American, and Scottish Mortgage boast 10%+ returns over all three time periods with a number of other trusts coming within a whisker of doing so. 3i’s stellar performance over the last decade — it’s the best performer out of all investment trusts — means that it’s still near the top of the pile despite having rather indifferent returns in the 1990s and 2000s.
Global trusts have generally beaten UK trusts over the last three decades, thanks to the UK market lagging global equity returns for the last several years. But even allowing for some survivorship bias, it’s impressive that only four of the 36 trusts have trailed the All-Share over the last three decades.
Returns by decade
I think it’s also useful to examine returns by decade again as it gives a clearer picture of which trusts have been the most consistent. The more specialised a trust is, the harder it is to be consistent over time given that investment fashions wax and wane.
Here is the same list breaking down the figures into three ten-year blocks:
|Company name||AIC sector||Launch date||2013-2023||2003-2013||1993-2003|
|TR Property||Property Securities||1905||8.0%||15.6%||14.3%|
|Canadian General Investments||North America||1930||12.3%||11.4%||12.0%|
|Henderson European Focus||Europe||1947||10.6%||14.2%||10.0%|
|BlackRock Smaller Companies||UK Smaller Companies||1906||9.9%||21.6%||3.1%|
|3i Group||Private Equity||1945||22.8%||8.5%||0.8% *|
|Finsbury Growth & Income||UK Equity Income||1926||9.5%||17.2%||5.9%|
|Law Debenture||UK Equity Income||1889||9.9%||13.6%||7.7%|
|Mercantile||UK All Companies||1884||7.9%||15.2%||8.1%|
|JPMorgan American||North America||1881||14.5%||10.0%||6.6%|
|JPMorgan Global G&I||Global Equity Income||1887||13.7%||12.1%||4.4%|
|Global Smaller Companies||Global Smaller Companies||1889||8.1%||19.9%||1.9%|
|JPMorgan European G&I||Europe||1929||10.5%||11.4%||6.7%|
|Murray International||Global Equity Income||1907||6.2%||18.4%||4.3%|
|Investment Company||Flexible Investment||1868||6.9%||6.5%||15.0%|
|Temple Bar||UK Equity Income||1926||4.7%||13.8%||8.5%|
|Average of all trusts||–||–||8.8%||12.4%||5.3%|
|Merchants||UK Equity Income||1889||8.9%||10.6%||5.8%|
|FTSE World (index)||Global||1986||11.5%||9.6%||4.1% *|
|Scottish American||Global Equity Income||1873||12.2%||10.9%||1.9%|
|City of London||UK Equity Income||1891||6.7%||11.6%||6.3%|
|Henderson Far East Income||Asia Pacific Equity Income||1930||3.4%||14.9%||6.5%|
|Murray Income||UK Equity Income||1923||6.1%||11.7%||5.8%|
|Dunedin Income Growth||UK Equity Income||1873||6.3%||10.7%||5.3%|
|Edinburgh||UK Equity Income||1889||6.1%||13.8%||2.5%|
|Henderson Smaller Companies||UK Smaller Companies||1887||9.2%||19.5%||-5.3%|
|FTSE All-Share (index)||UK||1962||6.4%||9.5%||4.5% *|
|Shires Income||UK Equity Income||1929||6.4%||13.7%||-0.4%|
|abrdn Diversified I&G||Flexible Investment||1898||1.1%||8.8%||3.1%|
|Baillie Gifford China Growth||China / Greater China||1907||2.3%||13.5%||-3.6%|
* 3i and index data annualised from January 1994 and January 1995 respectively as in the first table
There is a much wider variation in percentages here with a number of individual trusts making negative returns over the whole decade from 1993 to 2003. Unsurprisingly, there are mostly the ones with the poorest 30-year records even though their returns in the last 20 years have been a lot more impressive.
Hansa’s fall from grace is probably the one that sticks out the most for me and the variation in returns between decades of the three smaller company trusts (two UK and one more global) is a useful reminder of how volatile these can be — not that I need reminding at this precise moment in time! I was also a little surprised by how volatile Murray International’s returns have been, too, although that’s partly due to an exceptional period after Bruce Stout took charge in 2004.
One final thing worth noting is that most of these trusts beat both the All-Share and World indices in the first two decades. But the World index has proved to be a far more considerable adversary over the last ten years.
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