IN FOCUS
/ SECTOR PROFILE /
BACK-UP
PLAN
Investors pulling money out of the IA UK All Companies sector may
wish to consider putting it back into the closed-ended equivalent where
discounts are widening, writes Adam Lewis
T
HE £168BN IA UK
ALL COMPANIES
SECTOR has been
making the headlines
for all the wrong
reasons in recent months, with
investors rushing for the exit door
in their droves.
According to the Investment
Association, it was the worst-
selling sector in net retail terms in
May, June and July, with outflows
totaling £1.23bn over these three
months. While this may seem
marginal when compared with
the overall size of the sector,
which remains the largest in the
IA universe, it is indicative of the
current nervousness surrounding
the domestic market.
THE ALTERNATIVE
However, rather than reinvest this
money into open-ended global
22
equity or bond funds, something
that the in- and out-flows data
suggests many investors have been
doing, should they look instead at
the equivalent closed-ended UK All
Companies sector?
Housing just 15 funds and
with a market capitalisation of
£4.6bn, it offers a lot less choice.
Nonetheless, it contains a wide
variety of manager styles and
strategies.
“Unlike the UK Equity Income
sector, UK All Companies is a
difficult one to generalise about as
it contains quite a disparate mix
of funds,” says Innes Urquhart, a
research analyst at Winterflood
Investment Trusts.
“For example, you have the
more mainstream trusts –
such as Jupiter UK Growth or
Schroder UK Growth – and
trusts that invest much further
down the market spectrum such
as Schroder UK Mid Cap, The
Mercantile Investment Trust and
Henderson Opportunities.”
Indeed, when it comes to
different styles, AIC UK All
Companies also houses Neil
Woodford’s £788m Patient
Capital Trust and Artemis
Alpha, which both invest in
several unquoted companies,
so comparing trusts on a like-
for-like basis is no easy task.
However, the same can be said
for the equivalent open-ended
sector, which critics have long
argued needs to be broken up into
smaller categories.
LITTLE DIFFERENCE
Performance wise, there is little
to choose between the open- and
closed-ended UK All Companies
sectors. You would have been better
trustnetdirect.com
trustnetdirect.com
23