Kepler has released its rated investment trusts for 2025 across growth, income, and alternative income categories, adding AVI Japan Opportunity and Vietnam Enterprise Investments to the growth winners.
The ratings from Kepler Trust Intelligence factor in a span of five years with an analysis of risk, investment sector, objectives and performance relative to benchmark.
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Thomas McMahon, head of investment companies research at Kepler Partners, said: “The investment trust sector tends to attract the best managers; the structure gives managers plenty of flexibility to generate alpha, while the closed-ended nature means the management contracts are highly prized by fund groups.
“Our ratings reward the outstanding performers in three key categories and are designed to recognise those managers who have done particularly well to generate outperformance and mitigate the market risk during a highly volatile period over the past five years.”
Winners across the sectors include:
Growth Rated Funds
- Pershing Square Holdings
- Ashoka India Equity Investment
- Pacific Assets
- Schroder Asian Total Return Inv. Company
- Odyssean Investment Trust
- CQS Natural Resources G&I
- Fidelity European Trust
- Pacific Horizon
- AVI Japan Opportunity
- Henderson European Trust
- Invesco Global Equity Income Trust
- Vietnam Enterprise
- The European Smaller Companies Trust
- JPMorgan American
- Vietnam Holding
- BlackRock Frontiers
- BlackRock Energy and Resources Inc
- Schroder Japan Trust
- Strategic Equity Capital
- Fidelity China Special Situations
Kepler singled out the success of the Fidelity China Special Situations trust, which according to the AIC, is currently trading at a 13.8% discount according to the Association of Investment Companies. While the share price total return has lost 4.3% across the past five years, the sector has averaged a an 11.4% loss.
Income Rated Funds
- Montanaro UK Smaller Companies
- Utilico Emerging Markets
- JPMorgan UK Small Cap Growth & Income
- CC Japan Income & Growth
- BlackRock Smaller Companies
- Scottish American
- Templeton Emerging Mkts Invmt Tr
- JPMorgan Global Growth & Income
- JPMorgan European Growth & Income
- Henderson Smaller Companies
- Invesco Asia
- Diverse Income Trust
- Law Debenture Corporation
- abrdn Asian Income Fund
- TR Property
- Henderson Opportunities
- Schroder Oriental Income
- BlackRock World Mining Trust
- Aberforth Smaller Companies
- Fidelity Special Values
The list includes a group of UK small-cap trusts, with attention on Aberforth Smaller Companies. The trust runs as a pure value strategy and has had a share price total return of 7.7% in the past five years, against a sector average loss of 2.3%. It currently trades as a 12.4% discount.
“Four of the trusts to have won an Income rating utilise an enhanced dividend policy, pointing to a growing trend in the industry and suggesting that, over the medium term, these policies are effective in providing attractive dividend growth,” McMahon said.
Alternative Income Rated Funds
- Foresight Environmental Infrastructure
- Foresight Solar
- Bluefield Solar Income fund
- Renewables InfrastructureGroup
- CVC Income & Growth GBP
- Greencoat UK Wind
- BBGI Global Infrastructure
- Ecofin Global Utilities & Infrastructure
- 3i Infrastructure
“The Alternative Income rating looks at relevant sectors for trusts that have managed to deliver a flat or stable NAV along with dividend growth over the past five years. For the first time, the number of trusts rated in this category has fallen – with only nine trusts qualifying, down from 14 last year – reflecting the impact of an interest rate shock on the valuations of unlisted portfolios, financing costs and net cash yields,” McMahon said.