best and worst its in q1

Investment trusts outperformed in Q1 following a poor final quarter in 2011 when closed-end funds lagged the market recovery, according to latest research from Winterflood.

best and worst its in q1


Over the past 12 months, however, the sector remains behind the index, with a 1.2% decline compared to a 1.4% increase for the FTSE All Share.

Discounts also narrowed in the first quarter, with the sector average ending March at 7.6%, compared with 7.9% at the end of 2011.

"Since the end of 1990, the long-run average discount for the investment trust sector has been 9.9%. However, in the past ten years, the average has been tighter at 9% due to a number of factors including buyback programmes, which became tax efficient in 1999 and corporate activity, including the adoption of discount control mechanisms," said Winterflood’s analysts.

Best and worst performers

The best performing trust in Q1 was Baker Steel Resources Trust, up 49% in terms of share price. Another top performer was SVG Capital up 41% in the period, while AXA Property was at the foot of the table having lost 14% on its share price.

UK small cap funds fared well in the first quarter Winterflood said, with Aberforth Smaller Companies gaining 32% in share price and Throgmorton Trust jumping 25%.

"Small cap has often seen strong performance in the first quarter of the year as reported earnings exceed expectations. In addition, this quarter’s performance has been assisted by an increase in investors’ risk appetites following a difficult second half in 2011," Winterflood explained.

Aberforth Smaller Companies also had the strongest performing quarter in NAV terms, while Aberdeen Development Capital had the worst performing NAV, with a drop of 5%.

For the full report from Winterflood, click here.



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