Gresham House ranked first in S&P's latest review of investment portfolios
Over three years to 1 June 2001, Gresham House is the top-ranking investment trust, according to the latest investment funds information published by Standard & Poor's.
During that time, the £18m Micropal five-star rated Venture & Development Capital investment trust, which invests in high-risk start-up situations, has returned £11,871 on an initial £1,000 investment, compared to the three-year average return of £1,346 for all investment trusts.
Alfred Sterling, the trust's manager, puts its outperformance down to a number of factors. He said the trust had a good deal of luck with one of its technology holdings, Transense Technologies, which has gone up to £23 since he bought it at 23p. He added that he had been selling this stock on its way up but has stopped as he thinks it is stabilising at a level of between £22-£23m.
Sterling said the trust's shares had been languishing at a discount for a long time, but a revaluation of its underlying holdings has boosted the performance of the trust. It is trading at a discount of 18.6% as at 8 June 2001.
Sterling also manages the Welsh Industrial investment trust, which, over three years to 1 June 2001, is ranked ninth, returning £2,946. Over one year, it is ranked first, returning £2,960 against the average £1,023.
The trust has benefited largely from the performance of Transense Technologies and, like Gresham House, is very liquid at present due to Sterling's wariness about current market conditions.
Biotech trusts are well represented in the top 10 best performers over three years, with Finsbury Worldwide Pharmaceuticals, ranked second out of 258 trusts, returning £3,703, and International Biotechnology ranked third out of 258, returning £3,330. The two biotech funds have also outperformed the average over one year, returning £1,583 and £1,130 respectively.
The two biggest investment trusts in the bottom 10 over three years, Aberdeen High Income and Leveraged Income-ord, come from the UK High Income sector.
Aberdeen High Income, the £123m Micropal one-star rated portfolio, is ranked 253 over three years, returning £613 against the average return of £1,346. Over one year, the trust has returned £641 but its performance fares better over five years, returning £1,449 against the average return of £1,721.
Piers Currie, marketing director, investment trusts, at Aberdeen, said: 'Aberdeen High Income is a geared investment trust investing in income shares. These are high yielding, geared shares that are sensitive to market volatility, so recent volatility and performance is amplified.
'Over the past three years to 31 May, the FTSE All-Share has virtually moved sideways, returning £1,090 from a £1,000 investment. However, over the previous three years, the FTSE All-Share performed well, returning £1,931 while Aberdeen High Income returned £2,357.'
Leveraged Income-ord is ranked 254 over three years. The £106.6m Micropal one-star rated fund, also run by Aberdeen, has turned a £1,000 investment into £609 and, over one-year, posted a return of £607.
Three country-specialist funds are in the bottom 10: Edinburgh Java, which specialises in the Far East has returned £617; East German (Europe) has returned £653; and Old Mutual South African has returned £571.
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