H1 investment company review: leaders and laggards revealed as fundraising hits £4bn

The list of worst performing equity trusts is topped, unsurprisingly by JP Morgan Russia. It is joined by numerous Baillie Gifford funds, with the firm’s US Growth, Scottish Mortgage and European Growth trusts making up second, third and fourth worst respectively.

Elsewhere in the list were other growth trusts, technology focused funds and some UK small cap companies.

The best performing equity trusts include those with exposure to energy and commodities along with Latin American funds. Some value trusts including North American Income, Merchants and Temple Bar were also included in the list and were joined by multi-asset trusts.

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Scotgems, Crystal Amber and Rockwood Strategic, which have all had a degree of corporate action since the beginning of the year, were included among their top 25.

Of the best performing trusts only five are trading on premiums and seven are trading on double digit discounts.

Alternative trusts diverge

 The analysts noted that alternative investment companies have seen “a huge dispersion in performance”.

The weakest performers are those which only have exposure to private assets and in particular venture capital trusts, which Numis said was a result of “investors questioning the impact of rising interest rates and the moves in equity market valuations on private companies given the typical lag in producing valuations”.

The worst performers, in order, are Chrysalis, Molten Ventures, Seraphim Space and Schiehallion.

Numis added it believed some of the private equity trusts have been “too severely treated given a focus on resilient businesses”. These include HgCapital, Apax and NB Private Equity.

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The strongest performers include several renewable energy companies, such as JLEN Environment, Foresight Solar, Greencoat UK Wind and NextEnergy Solar all of which benefit from higher power prices. Gresham House Energy Storage and Harmony Energy are also included thanks to their benefit from power price volatility.

The analysts said this “represents an exceptionally strong performance for several funds that we would normally expect to be in the ‘slow and steady camp’”.

Fundraising

Alternatives also led the way in terms of fundraising for the first half of the year, which hit £4bn, the third highest amount for the first six months of the year on record, according to the AIC.

The largest fundraisings were International Public Partnerships, Supermarket Income REIT and Renewables Infrastructure Group.

There were no IPOs during the period.

Overall, industry assets dropped to £265bn at the end of May, down from the record high of £278bn at the end of November last year.

Elsewhere, fee reductions continued to be a theme with 14 companies amending them to benefit shareholders.

“Independent boards are an important benefit of investment companies over other types of fund and negotiating lower fees for shareholders is just one of the ways in which they demonstrate their value,” said Richard Stone, chief executive of the AIC.

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