Which Elite Rated investment trusts are the most consistent performers?

New research from the Association of Investment Companies (AIC) has ranked Elite Rated Jupiter European Opportunities, BMO Global Smaller Companies and Baillie Gifford Japan among the top 20 most consistent investment trusts over the past decade.

The AIC ranked its member trusts by discrete annual share price total returns and outperformance against the average investment trust. Where two trusts had the same consistency score, volatility of returns was used to differentiate between them.

Interestingly, the 20 most consistent trusts in terms of performance came from 13 different sectors, demonstrating that investment trust managers have been able to achieve consistent performance investing in different areas, and using different styles and strategies.

Top performers

The three Elite Rated trusts in the table outperformed the average investment company in eight or nine years out of the ten.

RankElite Rated TrustNo. of years above the overall weighted average% share price total return over ten years to 31 May 2019
2ndJupiter European Opportunities9549.04%
6thBMO Global Smaller Companies8351.11%
12thBaillie Gifford Japan8467.10%

Alexander Darwall, manager of Jupiter European Opportunities, said: “We seek to identify companies with strong, differentiated attributes which they can monetise by meeting the demands of customers, while exploiting regulatory and technological changes. We believe that this approach is sustainable because the way we work has not changed: we continue to meet company management, we are investors rather than speculators, and we have a consistent style applied through different market cycles and irrespective of market sentiment.”

Alexander is looking to set up his own fund management business and the investment board of this trust is carrying out the due diligence necessary for their decision as to whether or not to keep him on as trust manager, or give to role to someone else. We at FundCalibre believe they will choose to stick with Alexander.

BMO Global Smaller Companies invests in both individual companies and other investment trusts. Manager Peter Ewins applies the highest standards of environmental, social and governance practice, working with a specialist team to engage with companies on significant ESG matters, such as business conduct, human rights, climate change and labour standards.

He said recently: “Like other investors, we will continue to monitor the macro-economic, trade and political newsflow. We remain confident in the quality of the management teams behind our investments and we will endeavour to continue to identify some more under-appreciated new stock ideas in the year ahead from the attractive global small cap equity universe.” The trusts has increased its dividend in each of the past 49 years.

The Baillie Gifford Japan trust invests predominantly in 40-70 medium and smaller sized Japanese companies, which the managers believe to have above average prospects for growth. This growth may come from innovative business models, disrupting traditional Japanese practices, or market opportunities such as growth from overseas. The trust will invest in larger companies when the right idea presents itself.

The latest interim management report stated: “We continue to be excited about the opportunities for growth stock-picking in Japan and believe that a well-executed strategy delivers results. When we consider the strengths of the businesses held in the portfolio we remain optimistic about the future.”

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.