IN FOCUS
/ SECTOR PROFILE /
THE
HISTORY
BOYS
IT Global is home to numerous trusts with
a track record of more than 100 years – but
there is far more to the sector than longevity,
writes Adam Lewis
H
OME TO A TOTAL OF
£27BN OF ASSETS,
IT Global is by far the
largest sector in the
closed-ended universe.
With investors generally
shunning UK equities in 2017,
thanks largely to political
uncertainties surrounding Brexit,
both open- and closed-ended
global funds have proved popular
hunting grounds.
However, while the open-ended
sector has at times struggled to
beat the MSCI World, its closed-
ended counterpart has excelled.
Not only has it outperformed the
index over one, three, five and
10 years, it has also significantly
outperformed IA Global over
every one of these periods.
Over the past decade, for example,
the IT Global sector is up 146.95 per
cent compared with 110.86 per cent
from IA Global and 89.02 per cent
from the MSCI World.
TIME ON THEIR SIDE
The trusts in the closed-ended
sector certainly have experience on
their side. Aside from the 150-year-
old Foreign & Colonial trust, IT
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Global features several other
vehicles – Bankers, British Empire
and Scottish Investment Trust –
that were launched in the 1880s,
while the £6.1bn Scottish Mortgage
and £1.9bn Witan trusts are relative
saplings with both opening for
business in 1909.
Over this time, these trusts
have witnessed two World Wars,
the Great Depression, Black
Monday in 1987, the global
financial crisis of 2008 and, most
improbably of all, England’s
World Cup victory in 1966. It is
this history of not only investing
throughout – but also surviving
– so many market cycles that
helps to explain the broad appeal
of these trusts. But what other
factors lie behind the popularity
of this behemoth sector?
Adrian Lowcock, investment
director at Architas, says the
obvious benefit for closed-ended
global funds is their ability to gear,
which gives them a significant
advantage during rising markets.
At the same time, being closed-
ended means the fund managers
do not have to worry about inflows
and outflows.
trustnet.com
trustnet.com
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