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15+ New Investment Trust Ratings

UPDATE: Morningstar's investment trust research team have released more than 15 new research reports since the start of December

Alanna Petroff 19 December, 2012 | 10:03AM

Morningstar's investment trust research team have been busy issuing a huge number of reports and analyst ratings throughout 2012, and in the month of December alone they published new research and ratings for more than 15 trusts.

Below is a small selection of the most highly regarded trusts that received new ratings and research in December: 

Jupiter European Opportunities Trust (JEO) (Rating: Gold)

Since 2000 until the end of October 2012, this fund has returned more than 12% per year on an annualised basis, which is nearly 9% more than the average of its category peers, states Morningstar analyst Szymon Idzikowski in his latest research.

"The manager has achieved consistent outperformance in every year bar one, and that one was 2008 when gearing exacerbated the market falls," said Idzikowski.

For those investors looking for exposure to European equities, the closed-end fund team says that this is a compelling choice.

Montanaro European Smaller Companies Trust (MTE) (Rating: Silver) 

This trust has officially been run by managers David Lindley and George Cook since the beginning of 2012, but Morningstar analysts point out that they are supported by a well-resourced analyst team and by the firm's founder, Charles Montanaro. 

"We like the firmwide [investment] process in use here," stated Idzikowski in his research report. "The aim is to find growing companies in niche areas with strong balance sheets, cash flows, and dividend yields. We believe that Montanaro’s long experience in the sector gives him an edge in understanding businesses’ growth prospects and barriers thereto."

Updated Research for a Selection of Trusts

The investment trust team also reaffirmed ratings on a number of trusts in December, including the following:

Scottish Mortgage Investment Trust (SMT) (Rating: Gold)

"Scottish Mortgage Trust remains one of our favourites for global equity exposure," says Idzikowski. "Manager James Anderson epitomises long-term investing. He is genuinely obsessed with the long term when looking at companies and doesn’t get caught up in short-term trends or market noise."

Keystone Investment Trust (KIT) (Rating: Silver)

According to the head of Morningstar's investment trust research team, Jackie Beard, this trust is suitable for cautious equity investors.

The trust was given a high rating, in part, because of the fund's manager:

"The management [of this trust] was transferred to Mark Barnett at Invesco Perpetual on 1 Jan 2003. Barnett had already built a strong track record at Perpetual Income & Growth Investment Trust (PLI) over the previous six years, so he was a good fit for this fund ... We like the approach Barnett takes in managing his funds. He places great emphasis on understanding the downside risk and, although there is no formal income target in place here, his style leads him to dividend-paying companies," said Beard.

2012: Nearly 100 Trusts Have Research and Ratings

Since first launching Morningstar's closed-end fund research in January 2012, the team has issued reports and ratings for nearly 100 trusts.

To view all the latest research from the investment trust team, click here.

To view all investment trusts that are available to UK investors, click here. (Tip: Click on the top of the Morningstar Anayst Rating column to see all the Gold-rated funds.)

Understanding Morningstar's Analyst Ratings

Morningstar’s analyst fund and trust ratings range from Gold to Negative. The ratings indicate whether Morningstar analysts are optimistic about a fund’s future performance. A Gold rating indicates Morningstar analysts think highly of a fund and expect it to outperform its peers and relevant index over a full market cycle of at least five years. Silver and Bronze ratings also indicate positive sentiment from Morningstar analysts. A Neutral rating indicates that Morningstar analysts believe a fund isn’t likely to deliver standout returns but also isn’t likely to significantly underperform. A Negative rating indicates Morningstar analysts believe the fund is inferior compared to its peers and has at least one flaw that is likely to significantly hamper future performance.

To learn more about the qualitative Morningstar analyst rating system, watch this video

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
Jupiter European Opportunities Ord551.00 GBX0.27
Keystone Ord1,864.00 GBX-0.48
Montanaro European Smaller Ord530.75 GBX0.43
Scottish Mortgage Ord272.80 GBX-1.12
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.