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Top 5 Best Performing Investment Trusts of 2016

Which investment trusts have delivered top returns for their shareholders this year? Commodities, mining and gold related closed-end funds are among the top performers

Emma Wall 20 December, 2016 | 2:48PM

BlackRock World Mining (BRWM)

Return YTD – 89%

Recent years have been challenging for this Silver Rated trust's management and its shareholders. This was particularly the case in 2014 when the board made the decision to write down to zero the holdings in both the London Mining Marampa royalty contract and convertible bond, totaling over £52 million. But shareholders have been rewarded for their loyalty in 2016 – as the trust is crowned best performer of the year. Should commodity prices continue to rally, as many multi-asset fund managers predict, including Schroders’ Marcus Brookes, this trust may finally be in the red after five calendar years of losses.

The trust currently trades on a 6.8% discount.

Golden Prospect Precious Metals (GPM)

Return YTD – 88%

As with many other trusts invested in commodities and mining stocks, Golden Prospect has rallied this year after several years of losses. Despite a significant rally year to date, the trust is still down 20% on a five year annualised view, and has a 10 year annualised view of 12% losses per year. The trust is invested in stocks related to the precious metals sector.

JP Morgan Russian Securities (JRS)

Return YTD – 87%

This Neutral rated fund is built from the bottom up using both quantitative and qualitative criteria. The analysts evaluate a stock’s return potential through four sources of return: earnings growth outlook, dividend, changes in valuation, and currency. Then the team assesses growth prospects for the company and the industry in which it operates, as well as management quality, capital structure, and competitive advantage.

This year’s positive performance follows a 12% positive return in 2015.

BlackRock Commodities Income (BRCI)

Return YTD – 65%

This commodities trust holds large globally listed natural resources stocks including BHP Billiton, Rio Tinto and Royal Dutch Shell. The trust is largely made up of integrated oil companies, followed by mining companies and gold and copper firms. As with many of the top performers this year, the rally in performance is a welcome about turn for shareholders, who have suffered five calendar years of losses. Despite this, on an annualised returns basis the trust is flat over five years and up 3.8% a year over a 10-year basis.

JP Morgan Brazil (JPB)

Return YTD – 58%

It has been a bumpy ride for shareholders since this trust was launched in 2010. Even the 60% gains of this year have been volatile – as have Brazil’s politics. As well as the highs of hosting the 2016 Olympics in Rio, Brazil grabbed headlines this August when President Dilma Rousseff was removed from office following an impeachment vote in the Senate.

As with many other emerging markets, Brazil will be watching the Federal Reserve closely next year as rising US interest rates could impact local currency returns.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
BlackRock Commodities Income Ord89.00 GBX-0.70-
BlackRock World Mining Trust plc362.25 GBX-0.34
Golden Prospect Precious Metal Ord44.50 GBX1.14
JPMorgan Brazil Ord68.75 GBX-1.43
JPMorgan Russian Securities Ord552.00 GBX-0.18
About Author Emma Wall

Emma Wall  is Senior Editor for Morningstar.co.uk