Why the differing performance between ITs and 'sister' funds?

INVESTMENT TRUSTS

clock • 4 min read

Why are there often such differences in the performance of investment trusts and open-ended counterparts run by the same managers, asks James Burns, head of the multi-manager team at Smith & Williamson.

The investment companies sector has proved itself to be durable and adaptable over its almost 150 year history. This is demonstrated best by its oldest constituent, Foreign & Colonial. It was originally launched in 1868 as a bond fund before transforming into an equity fund, and latterly into its current guise as one of a long-only equity proposition enhanced by significant exposure to private equity. More recently, the demand for yield and the retrenchment of banks from various areas of the market has led to a proliferation of alternative asset classes being made available to retail ...

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