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Citywire Investment Trust Awards: the winners!

We present the 18 winners of our first investment trust Performance and Best Board awards.

Top performers

This gallery reveals the 18 winners of the first Citywire Investment Trust Awards, presented last Thursday at a ceremony at the Swan, Shakespeare’s Globe, overlooking the Thames and the City of London.

Seventeen Performance Awards were given to the investment trusts and investment companies whose fund managers had done the best job in their categories against their stock market benchmarks in the three years to the end of July. There was also a Best Board award for the board of directors our judges considered had best served their shareholders’ interests in recent years.

The important point to note about our Performance Awards is that they do not reward the investment trusts with the best shareholder return over three years. Nor, as you might expect, do they go to the companies with the best three-year growth in the net asset value (NAVs) of their investment portfolios either.

The basis for all but three of our Performance Awards is the information ratio, which measures how much value fund managers add to an investment trust’s portfolio for the risk they have taken against their stock market benchmark. The following pages show the winners and their nearest rivals, with their three-year information ratios, NAV and share price returns and the stock market indices against which they were measured.

Next: the winner in UK All Companies

UK All Companies

Independent Investment Trust (IIT) seized the Performance Award in the competitive UK All Companies category with its three-year returns (see table) boosted by the phenomenal success of Fevertree Drinks (FEVR), the premium tonics and mixer company which now accounts for nearly 13% of the portfolio, as well as big bets on house builders.

Max Ward (pictured left), managing director and founder of Independent collected the award from Investment Trust Insider editor Gavin Lumsden (right). The £367 million investment trust officially resides in the Association of Investment Companies’ Global sector but because it invests in the UK, we decided to give it a more appropriate home in our awards. Ward is a former manager of Scottish Mortgage Trust (SMT).

TrustInformation ratioThree-year NAVThree-year share priceIndex
Independent IT1.1102.3112.8FTSE All-Share TR
Fidelity Special Values0.644.648.1FTSE All-Share TR
Invesco Perpetual Select - UK0.636.433.7FTSE All-Share TR

Next: the winner in UK Equity Income

UK Equity Income

After a brief wobble following the Brexit referendum vote last year, Finsbury Growth & Income (FGT) investment trust romped home in this core category. The high-conviction, buy-and-hold approach of star fund manager Nick Train, who backs a relatively small number of cash-generative, global consumer brands, gives FGT a strong information ratio against both its rivals and the FTSE All-Share index.

Will Hampsey-Cook (left) of Frostrow Capital, which provides administrative and investment services to Finsbury Growth & Income, collected the award.

TrustInformation ratioThree-year NAV %Three-year share price %Index
Finsbury Growth & Income1.356.656.4FTSE All-Share TR
F&C Capital & Income0.940.036.5FTSE All-Share TR
Edinburgh IT0.538.133.6FTSE All-Share TR
Troy Income & Growth0.535.536.3FTSE All-Share TR
JPMorgan Claverhouse0.531.327.2FTSE All-Share TR

Next: the winner in UK Smaller Companies

UK Smaller Companies

The short-list in our table demonstrates the strength and depth of the UK Smaller Companies investment trust sector. Rights & Issues (RIII) was the clear winner, however, with the stock-picking skill of its veteran manager Simon Knott compounded by a reconstruction of the investment trust last year that further boosted shareholder returns.

Knott (pictured left) keeps a low profile despite his superb investment track record. Citywire last saw him in 2004 for the company’s fifth birthday party and although we have frequently followed his share dealings, we last spoke to him in 2012. We took the opportunity to record a rare video interview with him which we will publish soon.

TrustInformation ratioThree-year NAV %Three-year share price %Index
Rights & Issues IT1.498.9100.2Numis Smaller Companies (-InvTrust) TR
Invesco Perpetual UK SmCos1.361.576.7Numis Smaller Companies (-InvTrust) TR
BlackRock Throgmorton Trust1.367.668.8Numis Smaller Companies (-InvTrust) TR
Henderson Smaller Companies1.062.164.1Numis Smaller Companies (-InvTrust) TR
Standard Life UK Smaller0.966.666.5Numis Smaller Companies (-InvTrust) TR

Next: the winner in Asia Pacific Equities

Asia Pacific Equities

JPMorgan Asian (JAI) saw off stiff competition from rivals at Schroders and Fidelity to clinch our top spot in Asia Pacific Equities. Although the investment trust did not have the best share price or net asset value returns in the three years to 31 July, it did have the best information ratio, reflecting a move by its fund managers Richard Titherington and Ayaz Ebrahim to invest more in their best stock picks. A hike in dividends also boosted demand for the shares.

Richard Plaskett (pictured left), client director of JP Morgan Asset Management, collected the award on behalf of the managers.

TrustInformation ratioThree-year NAV %Three-year share price %Index
JPMorgan Asian0.969.973.9MSCI AC Asia ex Japan TR USD
Schroder AsiaPacific0.770.472.3MSCI AC Asia ex Japan TR USD
Invesco Asia0.662.963.2MSCI AC Asia ex Japan TR USD
Schroder Asian Total Return0.573.981.7MSCI AC Asia ex Japan TR USD
Fidelity Asian Values0.361.576.9MSCI AC Asia ex Japan TR USD

Next: the Emerging Market Single Country winner

Emerging Market Single Country

There is a long history of investment trusts offering specialist exposure to single countries in emerging markets and our short-list below indicates the high level of investor interest in India and Vietnam. The former country provided our winner with JPMorgan Indian (JII) managed by Rajendra Nair beating Aberdeen New India (ANII) by the narrowest of margins.

The two have the same information ratio but JII took the crown with slightly higher NAV and share price returns. It’s worth nothing that India Capital Growth (IGC) had higher NAV and share price performance than both of these trusts, but did not make the cut as it generated a lower information ratio against its benchmark, the S&P BSE MidSmallCap index, whereas its rivals were calculated to have delivered more value against the MSCI India index which hadn’t performed as strongly.

James Saunders-Watson, client director of JPMorgan Asset Management, collected the award for JPMorgan Indian.

TrustInformation ratioThree-year NAV %Three-year share price %Index
JPMorgan Indian1.076.982.6MSCI India TR USD
Aberdeen New India1.076.778.2MSCI India TR USD
VinaCapital Vietnam Opportunity1.078.399.3MSCI Vietnam TR USD
VietNam Holding0.439.655.2MSCI Golden Dragon TR USD
JPMorgan Russian0.321.422.3MSCI Vietnam TR USD

Next: the winner in European Equities

European Equities

European smaller and medium-sized companies have been the place to be in the past year as the eurozone economy has started to motor and the weak pound has boosted returns from the Continent. TR European Growth (TRG) investment trust has reaped the rewards from fund manager Ollie Beckett positioning the portfolio in cheap stocks whose valuations belied the forthcoming upturn. Its three-year information ratio was some way ahead of stable mate Henderson Eurotrust (HNE) and Jupiter European Opportunities (JEO).

Simon Longfellow, head of investment trust marketing at Janus Henderson, collected the award for TR European Growth.

TrustInformation ratioThree-year NAV %Three-year share price %Index
TR European Growth1.1100.5115.1MSCI Europe ex UK Small Cap TR USD
Henderson Eurotrust0.958.154.9MSCI Europe ex UK TR EUR
Jupiter European Opportunities0.666.968.8MSCI Europe ex UK TR EUR

Next: the winner in Global Emerging Markets Equities

Global Emerging Markets Equities

Emily Fletcher, co-manager of BlackRock Frontiers (BRFI) picked up the Performance Award after the investment trust she runs with Sam Vecht demonstrated the best information ratio in this category.

Although the past three years has been a relatively fallow period for this fund focused on countries yet to gain emerging market status, our analysis shows it has delivered more value against its MSCI Frontiers benchmark than trusts compared to either global or regional emerging market indices. Over five years it leads the Global Emerging Markets sector with its net asset value and shareholder returns.

TrustInformation ratioThree-year NAV %Three-year share price %Index
BlackRock Frontiers0.735.528.0MSCI Frontier Markets TR USD
JPMorgan Emerging Markets0.450.651.6MSCI EM (Emerging Markets) TR USD
Baring Emerging Europe0.131.533.1MSCI EM Eastern Europe 10-40 TR USD

Next: Global Equities

Global Equities

We move to the traditional global heartland of investment trusts. Five well-known investment trusts battled it out on the short-list. Scottish Mortgage Trust (SMT), the flagship fund of Edinburgh-based Baillie Gifford, was the clear winner with an information ratio higher than its rivals and nearly double that of stable mate Monks (MNKS).

In the past three years the portfolio has been propelled higher by its stakes in many of the world’s big digital winners such as Amazon, Alibaba and Alphabet, although fund managers James Anderson and Tom Slater have begun to consider how much more upside there can be for its tech titans.

Thomas Patchett, sales manager of Baillie Gifford, collected the award for Scottish Mortgage which earlier this year entered the FTSE 100.

TrustInformation ratioThree-year NAV %Three-year share price %Index
Scottish Mortgage0.890.796.7MSCI AC World TR USD
Bankers0.755.057.9LCI FTSE All-Share/MSCI World (30:70)
Mid Wynd International0.668.570.9MSCI AC World TR USD
Seneca Global Income & Growth0.436.644.8FTSE All-Share TR
Monks0.468.490.2MSCI World TR USD

Next: the winner in infrastructure

Infrastructure

We shift to infrastructure, one of those newer asset classes that has witnessed huge growth as investors have sought to diversify away from equities and to tap into the income from operating schools, hospitals and roads. Infrastructure is the first of three categories – including Private Equity and Specialist Debt – where the absence of reliable index benchmarks means we dropped information ratios and assessed trusts’ performance simply on their growth in net asset value (NAV) over three years.

Shares in 3i Infrastructure (3IN) and other listed, social infrastructure funds have been under pressure in the past month after Labour expressed interest in cleaning some of the PFI contracts in which they invest. Prior to that, the company built up a commanding lead over rivals with 59.5% NAV growth over three years. James Dawes, chief financial officer of 3i Infrastructure, collected the award.

TrustThree-year NAVThree-year share priceSector
3i Infrastructure59.561.7Infrastructure - Social
HICL Infrastructure42.627.8Infrastructure - Social
BBGI42.035.2Infrastructure - Social

Next: the winner in International Income

International Income

This sector has also seen growth as income investors seek to diversify away from the UK. Three investment trusts demonstrated superior returns according to our analysis in the three years to July but it was Schroder Oriental Income (SOI) managed by Matthew Dobbs that scored the highest information ratio.

Peter Rigg, a non-executive director on the board of Schroder Oriental Income, collected the award.

TrustInformation ratioThree-year NAVThree-year share priceIndex
Schroder Oriental Income0.549.550.7MSCI Pacific ex Japan TR USD
JPMorgan Global Growth & Income0.463.671.2MSCI AC World TR USD
Murray International0.140.634.7LCI FTSE All-Share/MSCI World (40:60)

Next: the winner in Japanese Equities

Japanese Equities

There may still be questions over Japan’s future but there is no doubt about the remarkable revival in Japan’s stock market under prime minister Abe. Three trusts have shown particular skill in the past three years, two of them from Baillie Gifford.

Baillie Gifford Japan (BGFD) was our winner. The £687 million fund, which has been managed by Sarah Whitley since launch in 1991, scored a higher information ratio in the three years to July against its Topix index benchmark than the smaller company focused Baillie Gifford Shin Nippon trust did against its Tokyo Second Section index.

Last month Whitley announced she would retire next April) when her deputy Matthew Brett will become the trust’s lead manager. Under Whitley the trust’s net assets grew by 545%, beating the 156% return on Japan’s Topix index.

Thomas Patchett was back on stage to collect the award on behalf of Whitley.

TrustInformation ratioThree-year NAV %Three-year share price %Index
Baillie Gifford Japan0.882.689.5Topix TR
JPMorgan Japanese0.370.675.1Topix TR
Baillie Gifford Shin Nippon0.2113.5117.8Tokyo SE 2nd Section TR

Next: the winner in North American Equities

North American Equities

The US is a notoriously difficult market for active fund managers to beat. JPMorgan US Smaller Companies (JUSC) managed by Don San Jose in New York was the only investment trust with a positive three-year information ratio, ensuring it went off with a gong.

James Saunders-Watson JP Morgan Asset Management returned to collect the award.

TrustInformation ratio3-Year NAV % 3-Year share price % Index
JPMorgan US Smaller Cos0.784.691.2Russell 2000 TR

Next: the winner in Private Equity

Private Equity

3i Group (III) triumphed over rival private equity investment trusts, its superior net asset value (NAV) growth over the past three years boosted by its leading stake in Action, the rapidly growing, unlisted Dutch discount retailer.

While most trusts in the sector have seen the discounts on their shares narrow in the past year as the category has finally returned to favour after the financial crisis, 3i shares have consistently traded at a premium to NAV in the past five years, testament to the turnaround the £9.3 billion company achieved after the 2008 credit crunch.

Anil Kohli, a 3i partner in charge of its banking team, collected the award.

TrustThree-year NAV %Three-year share price %Sector
3i Group101.9178.5Private Equity - Direct
NB Private Equity84.640.6Private Equity - Direct
HgCapital Trust64.286.2Private Equity - Direct
HarbourVest Global Private Equity62.365.0Private Equity - Fund of Funds
Pantheon International58.255.2Private Equity - Fund of Funds

Next: the winner in UK Property

UK Property

Commercial property has bounced back from the post-EU referendum sell off but a Brexit cloud still hovers over the sector. Three listed funds fought their way through the turbulence and on to our short-list with Picton Property Income (PCTN) topping the bill with its three-year growth in net asset value.

Michael Morris (left), chief executive of Picton Capital, Picton Property Income’s investment manager, took the award after a year in which he has reduced the trust’s investments in London and upped exposure to the regions. The company yields just under 4% and plans to convert to a real estate investment trust next year.

TrustInformation ratioThree-year NAVThree-year share priceIndex
Picton Property Income1.463.259.6IPD UK All Property Monthly TR
Schroder Real Estate0.443.233.9IPD UK All Property Monthly TR
F&C Commercial Property0.439.539.3IPD UK All Property Monthly TR

Next: the winner in Specialist Property

Specialist Property

Investors’ incessant search for yield has spawned a raft of specialist property companies and real estate investment trusts in recent years although our winner, Taliesin Property (TPF), a Jersey-based investor in German residential real estate, does not pay a dividend.

Named after a sixth century Welsh bard, Taliesin was launched in 2007 when Mark Smith (pictured left) and the trust’s other co-founders saw what they saw as an historic opportunity to invest in Berlin’s undervalued property market. Valuations have shot up since then but have not reached their full potential, Smith believes.

TrustInformation ratioThree-year NAV %Three-year share price %Index
Taliesin Property1.3172.4122.3IPD Germany Annual Property Index (All Prop) TR
Ground Rents Income0.756.034.1IPD UK All Property Monthly TR
Tritax Big Box REIT0.651.864.8IPD UK All Property Monthly TR
MedicX Fund0.547.937.1FTSE 350/Real Estate TR
Primary Health Properties0.550.255.9FTSE 350/Real Estate TR

Next: the winner in Specialist Debt

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Specialist Debt

The years since the financial crisis have provided plenty of debt for our short-listed funds in this category to get stuck into. Our clear winner, with the best net asset value growth over three years, was Fair Oaks Income (FAIR).

The £286 million Guernsey-based company specialises in collateralised loan obligations (CLOs), bundles of asset-backed corporate debt, from which its managers Roger Coyle (pictured left) and Miguel Ramos Fuentenebro (right) derive an impressive 13% yield.

TrustThree-year NAVThree-year share priceSector
Fair Oaks Income39.140.5Debt - CLOs
Invesco Perpetual Enhanced Income31.428.8Debt - Diversified
GCP Infrastructure Investments26.633.5Debt - Infrastructure Debt
CVC Credit Partners Euro Opps - £25.021.2Debt - Asset Backed Secured Loans

Next: the winner in Specialist Equities

Specialist Equities

Property, technology and environmental trusts feature in this eclectic category but it was International Biotechnology Trust (IBT) that beat them all to scoop our last Performance Award.

The £230 million investment trust’s share price performance has perked up since the announcement last year that it would pay a 4% dividend in future, although its top information ratio indicates the good performance the portfolio has achieved against its benchmark in the past three years.

Lucy Costa Duarte (left) and Ailsa Craig (right) of SV Life Sciences, who manage International Biotechnology Trust with Carl Harald Janson, collected the award.

TrustInformation ratioThree-year NAV %Three-year share price %Index
International Biotechnology1.189.0119.7NASDAQ Biotechnology TR
TR Property0.755.147.6MSCI Europe/Real Estate TR
Worldwide Healthcare0.681.397.3MSCI ACWI/Health Care TR
Impax Environmental0.567.070.2FTSE Environmental Opportunities All Shares
Polar Capital Technology0.3105.9117.3MSCI World/Information Technology TR

Next: the Best Board winner

Best Board

We know fund managers do an important job but often the boards of directors of investment trusts and investment companies go unsung, even though they are an indispensable part of the proposition of funds listed on the London Stock Exchange.

The Citywire Best Board Award is designed to put this right and highlight boards that have done a good job promoting their shareholders’ interests. Our five short-listed boards have all taken their companies on journeys in recent years as they have sought to improve investor returns and make their funds more accessible.

All deserve credit but our judges considered the board of VinaCapital Vietnam Opportunity Fund (VOF), chaired by Steve Bates, had made the most positive impact. In the past four years the fund has moved from the Caymans to Guernsey, upgraded from the junior Alternative Investment Market to a premium London Stock Exchange listing, switched to sterling from dollars and changed some of its accounting practices.

Khanh Vu, director of VinaCapital, fund manager of VinaCapital Vietnam Opportunity Fund, flew in from Ho Chi Minh City to receive the award on behalf of the board.

Next: Congratulations and thank you

Congratulations and thank you!

Congratulations to all our winners and a big thank you to our judges: Charles Cade of Numis Securities, Genevra Banszky Von Ambroz of Smith & Williamson, John Newlands, Newlands Fund Research and John Spiers of EQ Investors.

Look out for our video interviews with the following award-winning fund managers which we will publish soon: Max Ward, Simon Knott, Mark Smith, Miguel Ramos Fuentenebro and Roger Coyle, Michael Morris, Ailsa Craig and Khan Vu.