5 Top Performing Investment Trusts

Stock markets have made paltry gains so far this year - but against this backdrop certain funds have thrived. The top performing investment trusts have returned 20%

Emma Wall 20 August, 2014 | 3:55PM
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Stock markets have had a sanguine year so far. After an incredible rally in 2013, the S&P 500 has made much slower gains over the past eight months and the FTSE 100 is around the same level now as it was in January – albeit with some volatility in between.

Morningstar investment strategist Andy Brunner said that equity markets were vulnerable to a setback with little priced into equities or credit for anything untoward developing yet the potential for disappointing outcomes is growing.

“Greater uncertainty over geopolitics and US growth and interest rate trends may generate some near term equity market instability,” he said. “An equity market correction may well be underway potentially engendering a safe-haven bid in government bonds.”

And it is not just developed markets that have made disappointing gains. The MSCI Emerging Markets index is up just 5% year to date – although this is better than the 4.5% loss made in 2013.

But against this backdrop certain funds have thrived. The top performing investment trusts so far this year have returned on average 20%. All of the best performers have exposure to emerging markets, and more specifically to Asian countries.

We reveal the top-performing investment trusts of 2014 so far, which have also been awarded a Gold, Silver or Bronze Rating by Morningstar analysts.

JPMorgan Indian (JII)

Return year to date: 30%

Morningstar analysts rate this trust Bronze, and say that shareholders of JPM Indian are in good hands. The fee structure is simple and the fund’s ongoing charges provide a saving of over 60 basis points, giving it a cost advantage relative to its peers. The fund features a strong management supported by a close-knit team and a tried-and-tested process.

Aberdeen New Thai (ANW)

Return year to date: 26%

This Bronze Rated trust is run by three portfolio managers based in Bangkok. They’re supported by a locally based analyst, as well as two further portfolio managers in Singapore with whom they coordinate their investment decisions. The Singapore team itself is stable and headed by Hugh Young, and it’s a team Morningstar analysts hold in high regard. Not only do the team members have depth of experience, many of them have been with Aberdeen for more than a decade.

Invesco Asia (IAT)

Return year to date: 17%

The managers use gearing actively at this fund and flex it according to their view on current valuations. This is a Bronze Rated trust and the managers have performed well for shareholders without taking excessive risk. 

Pacific Assets (PAC)

Return year to date: 16%

This Silver Rated trust is run by stable team of which Morningstar analysts have a high opinion, comprising more than 30 members. Turnover on the team is low, and its remuneration includes a reinvestment of profits into their funds, a positive element.

Templeton Emerging Markets (TEM)

Return year to date: 14%

This Bronze Rated closed-end fund has weathered several storms, and Morningstar analysts think it’s well placed to continue. The investment process focuses on finding long-term value in a company that’s not yet priced in. Team members are encouraged to become experts in their sectors globally and then to expand this through regional knowledge. 

We used the free Morningstar Closed-End Fund Screener to identify the Gold, Silver and Broze rated investment trusts that have increased the most in value this year

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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Aberdeen New Thai Ord  
Invesco Asia Ord338.00 GBX-4.25Rating
JPMorgan Indian Ord798.00 GBX0.88Rating
Pacific Assets Ord332.00 GBX-3.21Rating
Templeton Emerging Mkts Invmt Tr TEMIT169.80 GBX-1.39Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar