Trying to find the best investment trusts on the market? Past performance is no guaranteed indicator of future returns – but combined with a strong management team, a supportive company, cheap fees and a tried and tested process it can help to whittle down the funds most likely to beat their peers over the medium term.
Here we highlight three of the best performing investment trusts of 2015 so far, which have also earned a coveted Gold, Silver or Bronze Rating from Morningstar Closed-end Fund analysts – suggesting their rally has further to run.
Schroder Japan Growth (SJG)
Growth YTD: 22%
Rated: Silver
Schroder Japan Growth remains a first-class offering in the sector. Andrew Rose has run Japanese equity portfolios since the 1980s and is one of the most experienced equity managers in the peer group.
He is supported by a strong team of analysts and portfolio managers based in Tokyo, which he headed until he moved back to London in the mid-2000s. We believe he is adept at using the resources to his advantage, and the quality of the group’s in-house research capability gives it an edge.
Baring Emerging Europe (BEE)
Growth YTD: 21%
Rated: Bronze
Given the fund’s investible universe—Emerging Europe is dominated by only a handful of countries and sectors the fund has experienced such big performance swings, and it’s likely such a pattern will continue, not least because of the possibility for strong political moves in that region. Each time the fund has subsequently bounced back, with the manager sticking to his process throughout, proving there’s merit in the firm’s approach.
Growth and valuation are the cornerstones of the process but the team considers country, liquidity and political risk, too--and these are considered separately from stocks.
Edinburgh Worldwide (EWI)
Growth YTD: 17%
Rated: Bronze
From 2003, when Baillie Gifford won the mandate to run this fund, to Jan 2014, the fund was an unconstrained, best ideas, global large-cap offering. However, over time this has become a highly competitive space and both the manager and the board felt there was little to differentiate it. Thus having liaised with shareholders, they proposed a change to the investment policy to make it focused on small, less mature but innovative companies.