Charles Stanley Direct has highlighted The Scottish Mortgage Investment Trust as the top-performing mandate in its Foundation Fundlist since it established the best of breed list 18 months ago.
The Scottish Mortgage Investment Trust returned 38.9 per cent between 28 February 2013 and 31 August 2014 according to FE Analytics.
“A global equities investment trust probably wouldn’t have been most people’s pick for the top 18 months ago, but with exposure to a number of sectors that have experienced strong growth such as technology and biotechnology, the trust has performed exceptionally well,” says Ben Yearsley, head of investment research at Charles Stanley Direct and creator of the Foundation Fundlist.
“However, it is also worth noting that the trust has gearing of 13 per cent, which adds to the volatility and contributed to a more turbulent period in March and April this year,” he adds.
Investment trusts also sit in second and third position of the 71-strong list, with the BlackRock Frontiers Investment trust and the BlackRock Smaller Companies Investment trust returning 32.8 per cent and 30.7 per cent respectively.
Old Mutual UK Dynamic Equity was the leading open-ended fund over the period, taking fourth position amongst the best performers with returns of 30.3 per cent, which Yearsley says: “[reflects] a particularly strong period for smaller and medium-sized companies last year.”
Meanwhile BlackRock Gold & General has not fared so well over the short-term, falling 29.8 per cent over the 18 months.
“The resources sector has been disappointing as uncertainties linger over the rate of growth in China, a nation pivotal to the consumption of a wide range of commodities…BlackRock Gold & General lost nearly 30 per cent due to the sustained underperformance of gold mining equities,” Yearsley says.
“It should be noted that investments in certain funds, including frontier markets, emerging markets, smaller companies and specialist sectors, such as technology and mining stocks, tend to be more volatile with an increased risk to capital, and that short-term performance is not indicative of longer term performance.”