5 Best and Worst Top-Rated Trusts in Q3

Edinburgh Worldwide's strong third-quarter performance saw it knock Scottish Mortgage off top spot in the year-to-date performance tables

David Brenchley 4 October, 2018 | 9:53AM
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Moscow buildings, Russian stock market, investment trusts

The globally focused Edinburgh Worldwide (EWI) continues to make impressive gains, powering to the top of the best-performing investment trusts table over both the year-to-date and the third quarter.

Elsewhere, healthcare trusts also served investors well, while Russia was the best-performing stock market in September, meaning JPMorgan Russian Securities (JRS) jumped up the tables.

Trailing behind, Asian offerings continued to fare badly. A pair of China-focused trusts were rock-bottom as trade tariffs bit, while India failed to fire yet again.

“Russia topped the performance charts last month, yet remains probably the cheapest market, for obvious political reasons. Yet the oil price rise will do wonders for the Russian economy,” says Ben Yearsley, director at Shore Financial Planning.

“China is back to crisis level valuations and markets await some form of stimulus package to offset the slowdown from the consumer. When this happens, will investors sit up and start buying again?”

We run down the five best and worst-performing top rated closed-end funds in the third quarter of 2018.

5 Best-Performing Trusts

Previously in second place behind Scottish Mortgage (SMT) in the year-to-date charts, Douglas Brodie’s Bronze Rated Edinburgh Worldwide took the lead. It’s now racked up gains of more than 30% in the year to 30 September.

Its near 10% return in the third quarter, combined with Scottish Mortgage’s 2%, took EWI above James Anderson’s mandate in the charts.

Following in second place over the third quarter, JPMorgan Russian Securities was boosted by the rise of the oil price. The price of the commodity is now at an all-time high in rouble terms and propelled Oleg Biryulyov’s Bronze Rated trust to three-month gains of 9%.

It's an area we noted at the start of the year as looking attractive on valuation and fundamental grounds.

Biotech Growth (BIOG) and Worldwide Healthcare (WWH) continue to take advantage of ageing demographics and favourable regulatory regimes in both the US and Asia. The pair, highlighted to Morningstar.co.uk recently as two fund picks for the long term, returned 8.9% and 9.7% respectively in Q3.

In fifth place Alexander Darwall’s Gold Rated Jupiter European Opportunities (JEO) captured upside of 7.4% over the past three months. Its largest holding, Wirecard (WDI), helped with a quarterly gain of more than a third.

5 Worst-Performing Trusts

It’s an all-too familiar story for investors in Asia, as investment trusts focused on the area as a whole, or specific countries, continue to find conditions tough.

While JPMorgan’s Russian fund has been reason to cheer, two of its other country-specific options, JPMorgan Indian (JII) and JPMorgan Chinese (JMC) are suffering. They were down 13.5% and 7.8% respectively in Q3; 15.5% and 13.5% YTD.

Fidelity Special Situations (FCSS), managed by Hong Kong-based Dale Nicholls, also felt the force of trade war uncertainty and slowing economic growth in the country, losing 12% in the third quarter.

That trio were the big losers in Q3, with both Alastair Mundy’s UK, value-focused Temple Bar (TMPL) and Matthew Dobbs’ Schroder Asia Pacific (SDP) down just over 3% following in fourth and fifth.

But that loss isn’t quite enough to drag Temple Bar into the 10 worst-performing top-rated funds year-to-date.

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
Biotech Growth Ord991.00 GBX1.12Rating
Edinburgh Worldwide Ord144.80 GBX-0.28Rating
European Opportunities Trust864.00 GBX-0.12Rating
Fidelity China Special Ord206.00 GBX-0.48Rating
JPMorgan China Growth & Income Ord215.00 GBX-0.69Rating
JPMorgan Emerg E, ME & Africa Sec Plc128.00 GBX0.39Rating
JPMorgan Indian Ord926.00 GBX0.76Rating
Schroder AsiaPacific Ord503.00 GBX-0.59Rating
Scottish Mortgage Ord861.20 GBX1.06Rating
Temple Bar Ord247.50 GBX0.81Rating
Wirecard AG0.02 EUR0.00
Worldwide Healthcare Ord333.50 GBX-0.15Rating

About Author

David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk

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