Growth capital, UK property logistics, country specialist and environmental sectors were the top-performing among investment trusts in the 30 November, according to new data from the Association of Investment Companies (AIC).
The 'growth capital' sector produced a return of 47% over the 11 months to November, compared to the average investment company return of 13% over the same period, while the 'property – UK logistics' sector delivered a return of 43%, the 'country specialist' sector, boosted by strong performances from the three Vietnam-focused investment companies, delivered a 31.33% return, and 'environmental' sector delivered a 29% return.
The best-performing individual investment trusts were led by Geiger Counter Ltd, in the commodities and natural resources sector, which delivered a 111.2% share price total return, followed by the Schiehallion Fund Ltd, in the growth capital sector, which returned 108.5%, and VietNam Holding Ltd (LSE:VNH) in third with 74%.
Annabel Brodie-Smith of the AIC said: “Despite the pandemic continuing to affect our lives, it’s positive to see the average investment company delivering a healthy 13% return."
She noted that the best-performing sectors were dominated by alternative assets such as unquoted companies and property, as well as specialist equity, while the growth capital sector is a relatively new one to the AIC list, focused on trusts that invest in later-stage venture capital.
“It’s interesting to look back at the best-performing companies, but important to remember that past performance is not an indicator of future returns. Investing should be for the long term and investment companies cover a broad variety of sectors, risk profiles and geographical exposure to match a range of investor needs. Investors need to consider their investment objectives and focus on building a diversified long-term portfolio,” Brodie-Smith said.
Rob Crayfourd and Keith Watson, managers of the Geiger Counter trust, said: “Nuclear power is benefiting from a positive swing in sentiment in its direction. Both governments and investors are increasingly aware of the need for nuclear power, both as a non carbon-emitting energy source and to provide baseload power in support of the green energy agenda. Whilst renewables are an ever-increasing component of energy supply, production is intermittent in nature, making nuclear an essential part of the energy mix, especially in meeting emissions targets. We think that the current supply deficit is unsustainable and will drive a continued recovery in the uranium price, which will bring new projects into production, particularly as current market uncertainties are making it difficult for new projects to advance.
“We believe demand growth will be driven by a build-out of new reactors led by the emerging regions of China and India, which are focusing on improving air quality. The portfolio has a strong bias towards small and mid-cap uranium mining companies and this reflects our view that these types of company generally have superior growth prospects (for example, production improvements or improvements in reserves) and, generally being less well researched, it is also where the closed-end nature of the company allows us to take a longer term view.”
Craig Martin, manager of VietNam Holding, said: “It has been a stand-out year for Vietnam and Vietnam Holding in many ways. Not only have we seen a very strong performance in our NAV and share price, but we have been able to do more, measure more and report more on our responsible investing initiatives.
“Domestic investors have driven the stock market to record highs on the back of surging levels of liquidity and, with our team on the ground, we have been able to nimbly navigate the opportunities, and position our concentrated portfolio at the junction of great growth and reasonable valuations. We are excited by the prospects for 2022 as Vietnam gets back to its multi-decade GDP growth trajectory of 6% to 7% per annum.”