The outperformance was greatest in the Japan and European Smaller Companies sectors, while trusts in the Global Growth & Income, UK Growth & Income and Global Growth sectors underperformed their open-ended peers.
The Global Growth & Income sector suffered from the weak performance of the historically strong Murray International trust.
Overall, investment trusts lagged equity markets in the fourth quarter of 2013. The sector as a whole was up 4.2%, compared to a rise of 5.5% for the FTSE All Share. Winterfloods attributed this to the greater number of low beta trusts, such as infrastructure and specialist debt, plus the higher overseas exposure of many equity trusts.
The discount on investment trusts widened slightly over the period, moving from 5.2% at the end of September to 5.4% at the end of December. However, discounts remain low compared to the average level since 1990 and if alternatives are included, discounts continued to contract.
The strongest sectors in the fourth quarter were the UK Smaller Companies and European Smaller Companies, which saw rises of 10.1% and 9.3% respectively. The UK Smaller Companies sector was buoyed by strong performance from trusts such as BlackRock Smaller Companies and JPM Mid-Cap.
The weaker trusts tended to be commodities-focused. City Natural Resources, for example, lost 17% over the quarter. Global emerging markets trusts were also weak, dropping 1.9% on average. The Genesis Emerging Markets trust lost 10%, while the Aberdeen Latin American Income fund dropped 8%.
