Sector specialist trusts outperform country-focused peers in first half

Direct Property-Europe is top performing sector over first six months of 2011.

Sector specialist investment trusts have triumphed over their country-focused rivals in the first six months of the year, according to the Association of Investment Companies (AIC).

A £100 investment in the Property Direct – Europe sector at the start of the year would have returned £132, with the space proving resilient against a backdrop of sovereign debt woes in the eurozone.

However, a spokesperson for the AIC warned with average net gearing of 162% compared to the investment trust universe’s 7% average, the sector could be seen as one of the more risky in which to invest.

“The Property Direct –Europe sector was the top performer over six months to 30 June 2011, up 32%. But with average net gearing in this sector standing at 162%, it is not for the faint hearted.” 

Other specialist sectors that stood out included Private Equity, up 13%, with Biotechnology and Healthcare also faring well, returning 5%.

Asia Pacific was the worst performing sector over the first half of the year, down 16%, while Latin America also suffered, posting a decline of 14%.

The top performing investment trusts over the past six months all had specialist mandates, with commodity group El Oro leading the way, returning 50%.

European property trust Sirius Real Estate was second, returning 45%, while debt company Greenwich Loan Income came in third with 42%.

Real Estate Credit Investments was up 41% and Tamar European Industrial returned 36% – completing the top five.