Research by the AIC shows managers from Jupiter, BlackRock, JP Morgan are among those tipped by research analysts to outperform, as well as managers running the arguably lesser known trusts such as BB Healthcare, Keystone and Seneca.
Anthony Leatham, head of investment trust research at Peel Hunt, names former analyst Paul Major, co-lead manager of the recently-launched BB Healthcare trust as potentially being a key driver in the trust generating double-digit returns.
He says: “Paul is a biochemist by background and is supported by a team of highly experienced specialists at Bellevue Asset Management. Importantly, he is able to express his stock picking skill on this very concentrated portfolio.
“We think that the combined experience of Paul Major, his co-manager Dr Daniel Koller and the wider team makes this strategy well placed to deliver double-digit annualised shareholder return through fundamental stock analysis and an unconstrained investment approach.”
Leatham says Ross Teverson, lead manager of the Jupiter Emerging and Frontier Income trust, is well placed to use his experience in managing global emerging market equity funds at Standard Life Investments in the investment trust sector.
“This disarmingly intuitive focus on companies which are undergoing change, combined with an unconstrained mandate, accessing stocks from across the market cap spectrum and going beyond emerging into frontier markets, is expressed through a high conviction, concentrated portfolio,” Leatham says. “Ross takes a hands-on approach and is often found travelling to far-flung regions to meet with company management as part of his search for capital growth and income.”
Emma Bird, research analyst at Winterflood, picks Guy Anderson – who was appointed lead manager of £2bn The Mercantile Investment trust last April – and BlackRock’s Olivia Markham as ones to watch.
“Guy Anderson is a highly regarded manager and we believe that his promotion to lead manager of the largest investment trust investing in UK equities within five years demonstrates JP Morgan’s confidence in his ability.
“The manager’s passion about the individual stocks in which he invests is evident and the fund has started to show signs of a turnaround in performance since his role was expanded just over two years ago.”
Bird adds that Markham, co-manager of BlackRock’s Commodities Income Investment trust and the World Mining trust, has an in-depth knowledge of the sector from her role as sell-side mining analyst.
“Olivia is considered to be a rising star at BlackRock and we rate the company’s Natural Resources team highly.”
Ewan Lovett-Turner, investment companies research director at Numis Securities, is confident James Goldstone can fill the shoes of Mark Barnett in managing the Keystone Investment trust having been appointed manager in April, while picking Janus Henderson’s Laura Foll as having “a bright future”.
“It remains early days, but he has had made a good start with Keystone’s NAV total return up 4.4 per cent versus 3.5 per cent for the FTSE All Share since taking over,” Lovett-Turner says.
“Laura Foll has been co-manager of Lowland since 2013 and involved in law debenture since 2011. I’ve been impressed by Laura’s deep stock specific knowledge.”
Monica Tepes, head of investment companies research at Cantor Fitzgerald Europe, points to Seneca Global Income & Growth’s co-lead manager Peter Elston as being in prime position to grow the £70m trust.
“The fund has already made good progress in this direction with strong performance, an attractive yield, a successful zero discount policy in place and already some share issuance,” she says.
Tepes names Keith Watson and Robert Crayfourd, managers of City Natural Resources High Yield, Golden Prospect Precious Metals and Geiger Counter, as likely to benefit from a recovery in the natural resources sector.
“The first five of the last six years saw natural resource equities recording declines in every year,” Tepes says. “ 2016 however saw a sharp reversal of this trend and all three funds were among the top 15 best-performing trusts with price total returns of 57 per cent to 95 per cent. While 2017 started well for the sector, those gains have since been given back; I do think however that should the recovery trend get back on track and continue over the coming years, the managers will get more media and investor attention.”