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Investment trusts – marathon managers

Half of all investment trusts that’ve been running for at least 10 years have had the same manager over that time.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Investors are always encouraged to take a long-term view. But what about the people managing our money? Are they in it for the long haul too? We took a look at investment trusts managers and it seems the answer is a resounding yes.

Half of all investment trusts that’ve been running for at least 10 years have had the same manager over that time. There are 10 investment trust managers who have 25 years or more under their belt, and one has been at the helm an incredible 37 years. These figures are encouraging for investors looking for places to invest their money over the long-term.

Obviously there’s no guarantee how long a manger will stay with an investment trust. And there’s far more to choosing an investment trust than how many years a manager has been in charge. But we think manager longevity is an important consideration.

The longer a manager heads up a trust, the more likely the trust’s investment philosophy and process remains consistent, so investors know what they’re getting. And as the manager’s experience grows, the trust should benefit from that experience.

Investing is a marathon, not a sprint. As long as the trust’s board retains faith, we think the longer a manager is in the place the better.

This article isn’t personal advice. If you’re not sure where to invest please take advice. Investment will fall as well as rise in value, so you could get back less than you invest.

City of London – income idol

In July 1991 Bryan Adam’s hit song ‘(Everything I Do) I Do It For You’ threatened to top the charts for the rest of the decade. In the same month Job Curtis became manager of the City of London Investment Trust. But while Bryan Adams was eventually knocked off the top spot after 16 weeks, Curtis is still at City of London after 28 years.

He’s followed a consistent approach in that time, investing in companies with healthy and steadily growing dividends. He’s found the most opportunities in UK-based multinationals like HSBC and BP, but he also invests in higher-risk small and medium-sized businesses too, as well some overseas companies.

Curtis has increased the income paid out to investors in each of the 28 years he’s managed the trust. That’s earned him ‘dividend hero’ status from the Association of Investment Companies. He’s delivered impressive capital growth too but recent past performance has been lacklustre. £10,000 invested when he first took over would now be worth £124,978* with income reinvested. That doesn’t indicate or guarantee future performance and income is variable.

This investment trust can use borrowing to invest (gearing), which can increase returns but adds risk. The trust can also invest in higher-risk emerging markets.

Annual percentage growth
Jun 14 -
Jun 15
Jun 15 -
Jun 16
Jun 16 -
Jun 17
Jun 17 -
Jun 18
Jun 18 -
Jun 19
City of London Investment Trust 7.7% 0.7% 15.5% 4.1% -1.5%
FTSE All-Share 2.6% 2.2% 18.1% 9.0% 0.6%

Past performance is not a guide to the future. Source: *Lipper IM to 30/06/2019

More on this trust including charges

Key Information Document

JPMorgan Emerging Markets – quarter of a century and counting

25 years ago China’s GDP per person was $473. Nearly half of India’s population was living below the poverty line. Inflation in Brazil was around 3,000%. South-Africa had only just held its first democratic elections.

Since then China’s GDP has rocketed by around 2,000%. Less than 3% of India’s population now live in extreme poverty. Brazil has become a global 10-top economy and South Africa is the only African member of the G20 group of major economies.

One thing that’s remained constant in that time is the manager of JPMorgan Emerging Markets Investment Trust. Austin Forey invests in companies he thinks have excellent long-term growth prospects, mainly in three key areas: financial services, technology and consumer companies. Forey invests in a relatively small number of companies so each one can have a meaningful impact on performance. It’s a higher-risk approach though, as is investing in emerging markets in general.

He’s done an excellent job since taking over the trust in 1994. In that time Forey’s grown the trust 490.3%, compared with its benchmark’s 301.2%* growth. That’s not an indication of future returns.

This investment trust can use borrowing to invest (gearing) and is a relatively concentrated portfolio. This can increase returns, but adds risk.

Annual percentage growth
Jun 14 -
Jun 15
Jun 15 -
Jun 16
Jun 16 -
Jun 17
Jun 17 -
Jun 18
Jun 18 -
Jun 19
JPMorgan Emerging Markets Investment Trust 6.6% 9.3% 27.3% 7.0% 21.5%
FTSE Emerging 6.7% 3.7% 24.1% 5.9% 8.3%

Past performance is not a guide to the future. Source: *Lipper IM to 30/06/2019

More on this trust including charges

Key Information Document

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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