Best and Worst Performing Investment Trusts of 2021

At the midpoint of the year, Fidelity Special Values holds the number one slot, while Japan trusts are in the doldrums

James Gard 5 July, 2021 | 4:01PM
Facebook Twitter LinkedIn

2021 graphic

If 2020 was the year of tech stocks then 2021 has been all about the value recovery. For the first five months of the year that trend has held, but a dramatic comeback for high growth stocks in June has upended our list of the best and worst performing investment trusts in the second quarter. At this point of 2021 we have investment trust performance data for June, Q2 and for the first half of the year. The data shows the tug-of-war between growth and value trusts, and between those focused on Asia and the United States. To illustrate the mixed nature of this year, two trusts with very contrasting styles occupy the number one and four slots in 2021 so far: value-focused Fidelity Special Values and tech growth trust Scottish Mortgage, which was last year's top performer.

Despite the ongoing threat of inflation, this year has been a relatively benign one for world stock markets, with US benchmarks hitting new record highs in recent months. So the gap between the best and worst performers is only around 30 percentage points, whereas at this point last year – a tough comparison because of the coronavirus crash – the best performer, Scottish Mortgage, was 42% higher in share price terms whereas Temple Bar Investment Trust (TMPL) was down 46%. Only two trusts have posted negative returns in the year so far and they are both focused on Japan.

Top Rated Trusts

In the year to date, Gold-rated Fidelity Special Values (FSV) is top of the leaderboard with a gain of nearly 22%, whereas Silver-rated JPMorgan Japan (JFJ) is off more than 8%. In the second quarter, Scottish Mortgage (SMT) came out on top with a gain of 15% after a stunning performance in June, while Baillie Gifford Japan (BGFD) was at the bottom of the pile with a very modest dip of -0.46%. The Fidelity trust has benefited from the swift rotation back into value and recovery stocks this year. Alex Wright also manages the open-ended fund, Fidelity Special Situations, which has gained around 17% in 2021, but has lost ground in June after the growth comeback.

Top 10 Best Performing Investment Trusts

 

Best performing UK investment trusts

Morningstar upgraded the trust (and fund) earlier this year to Gold, with analyst Fatima Khizou praising Wright’s insight, portfolio construction and contrarian approach. After a very strong run, Japanese markets have dipped following a rise in coronavirus cases and muddled messages over the Tokyo Olympics. JPMorgan Japanese has a Morningstar Analyst Rating of Silver and gained 44% last year. “JPMorgan Japanese Investment Trust continues to benefit from an impressive lead manager, a well-resourced supporting team, and a time-tested investment process,” says Morningstar’s Samuel Lo.

Bottom 10 Performing Investment Trusts

Worst performing UK investment trusts

Looking in detail at the top 10 for 2021, there's a decent mix in terms of regions, styles and cap bias. Russia, Europe, America and Asia focused trusts all make the grade. JPMorgan America (JAM), whose top holdings include Microsoft and Apple, also rubs shoulders with two small-cap focused trusts, BlackRock Smaller Companies (BRSC) and Standard Life UK Smaller Companies (SLS). JPMorgan Russian Securities (JRS) holds the number three spot so far in 2021, as the country’s stocks have been helped by booming oil prices.

In terms of quarterly performance, Silver-rated Scottish Mortgage (SMT), the best performing trust under Morningstar coverage in 2020, was the star performer in Q2 with a gain of 15%, while Bronze-rated Baillie Gifford Japan (BGFD) was at the bottom of the pile with a 0.46% fall in the last three months.

  • To make it on to our list of leaders and laggards, the investment trust needs to have a Morningstar Analyst Rating of Negative and Above. Returns are based on share price changes rather than net asset value (NAV)

 

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.

Facebook Twitter LinkedIn

About Author

James Gard  is content editor for Morningstar.co.uk