European smaller companies have been the best performing sector over five and 10 years, according to...
European smaller companies have been the best performing sector over five and 10 years, according to the AITC's March 2001 statistics.
Over five years the share price, size-weighted average, for this sector was 305% and over 10 years was 692.3%, compared with five and 10 year averages of 188.3% and 335.1% for UK smaller companies trusts.
The average for all AITC conventional trusts over the same time periods was 183.1% and 367.6% respectively.
There are only five trusts in the European smaller companies sector, of which only three have 10-year records. Hendersons' TR European Growth was the best performer over 10 years. A £1,000 investment in TR European Growth 10 years ago would have turned into £8,341, while over five years it would have risen to £3,209. However, a £1,000 investment last year would have fallen in value, returning the investor £717.
Stephen Peak, fund manager of TR European Growth, said the good long-term performance has been a result of the bottom-up, stockpicking approach Hendersons undertakes, where stock levels drive where they invest rather than sectors or geographical regions.
Peak also said that gearing has aided long-term performance. With the average level over five years being about 20%, Peak said that a successful policy gearing amplifies returns.
The trust was launched in September 1990 and focuses on smaller and medium-sized companies. It has 92 holdings, with exposure to 30% in the Netherlands, 18% in France, 13% in Germany and 12% in Switzerland.
The AITC stats also showed that utilities was another strong sector on a five-year scale, with a share price size-weighted average return of 233.1%.
Of the three investment trusts in that sector, LeggMason Investment Europe IRC, was the top performing, turning £1,000 into £3,489 in the five-year time period.
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