Investment trusts lag in February

The investment trust sector was down 7% in February as markets continued to slide, according to the latest monthly report from Wins Investment Trusts (Wins).

This fall was sharp enough to underperform the wider market, as the FTSE All-Share index fell 6.5% in February, worse than its fall of 5.8% in January. Wins suggests this was down to the growing threat of nationalisation for banks in both Britain and America, as well as ongoing negative economic data.

After underperforming the bounce in the FTSE All-Share during the first week of the month, the investment trust sector broadly tracked the index on the way down, Wins says.

Investment trusts have had a strong 2009 so far, falling 7.7% to the end of February, compared with a 12% decline for the index over the same period.

However, over the 12 months to the end of February, the sector lagged the All-Share, falling 38% against the index’s 33%.

In share price terms, the worst performer in February was Candover Investments, down 53%, and Invesco Property Income, down 47%. Ten of the 20 best performers for the month were property funds, including offerings from Axa, Invista and Hendersons, which benefited from a bounce back from low levels.

So far in 2009, the best performer in share price terms is Principle Capital, up 109% following news of corporate activity, according to Wins. Axa Property Trust, Thames River Hedge + and BlackRock World Mining were other strong performers.

In net asset value terms, JPM Russian Securities was the best performing vehicle, while Japanese funds struggled as the yen weakened. Gartmore Fledgling and Eaglet Trust also produced strong returns.

At the regional level, February saw negative returns across the board, with Japan the worst hit, declining 11.5%. The best region was emerging markets with a 4.5% fall.


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