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Figures from AIC show that 10% (27 by number) of conventional members have been around for 90 years or longer and continue to thrive.
Of these, nearly half are featured in the AIC’s dividend heroes list – companies that have increased their dividends for 20 years or more.
On the 21st April the world’s oldest reigning monarch and Britain’s longest reigning monarch, Queen Elizabeth II, celebrates her 90th birthday.
A queen is born, investment trusts move into equities
According to John Newlands in his book ‘Put Not Your Trust In Money’, which was published by the AIC, by the 1920s, the decade in which the Queen was born, “many investment trusts were starting to shift the balance of their investments away from purely fixed interest portfolios and into equities.” Some of these names look less than familiar today, however. For example, Foreign & Colonial Investment Trust’s first industrial investments included Liebig’s Extract of Meat, Swedish Match and Texas Gulf Sulphur, which were bought in 1926.
One extract from Newlands’ book about the early investment trusts holds particular resonance to this day: John Newlands writes: “It is essential to realize that investment, until the turn of the 20th century, and beyond, was all about income, rather than capital growth. Interest rates were low, and inflation negligible…investors had very few options….”
Foreign and Colonial Investment Trust is the oldest company in the investment company sector (148 years) whose original aim was to help the ‘investor of moderate means’ have ‘the same advantage as the large capitalist in diminishing risk in Foreign & Colonial stocks by spreading the investment over a number of stocks’. However, as well as the Queen’s 90th birthday, 2016 also sees the 90th anniversary for both Finsbury Growth & Income and Temple Bar.
Finsbury Growth & Income was launched on 15 January 1926 as the Scottish Cities Investment Trust, and remains Scottish domiciled today, despite being managed from London. By 1958 Finsbury Growth & Income had net assets of approximately £1m, which grew to £3.3m by 1968 and to £24m by 1990. The net asset value now exceeds £780m (as at end of March 2016).
Temple Bar launched in 1926 as The Cable, Telephone and General Trust Company Ltd and since then has confronted the Great Crash of the 1930s, the inflationary 1970s and subsequent periods of equity market strength and weakness. Today, its total assets are over £800m (as at end of March 2016).
Commenting on the longevity of investment companies John Newlands, Head of Investment Trust Research at Brewin Dolphin Ltd said: “The fact that a number of investment trusts had already been operating for decades when the Queen was born – and continue to trade today – shows that far from being old-fashioned, they have evolved and improved with the times. If they hadn’t they would have faded away, as have so many once famous large UK companies from Marconi to Woolworths. I would add that the long-term compound investment returns of many of these veteran investment trusts are not to be sneezed at, either.”
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies said: “It is a testament to the sector that 10% of investment companies have been around for the 90 years since the Queen was born or in many cases a good deal longer. Investment companies have weathered wars, booms and busts and they are still continuing to deliver strong long-term performance to their shareholders today. Long-term investing doesn’t get much more long-term than this.”
Investment companies 90+ years old
Company
Management group
AIC sector
Total assets (£m)
Launch date
Foreign & Colonial Investment Trust
F&C Management
Global
2,878.32
01/01/1868
Scottish American
Baillie Gifford
Global Equity Income
434.92
31/12/1873
Dunedin Income Growth
Aberdeen Asset Managers
UK Equity Income
434.92
01/02/1873
JPMorgan American
J.P. Morgan Asset Management
North America
899.23
18/06/1881
Mercantile
J.P. Morgan Asset Management
UK All Companies
2,012.39
08/12/1884
Scottish Investment Trust
Scottish Investment Trust
Global
790.77
27/07/1887
Henderson Smaller Companies
Henderson Global Investors
UK Smaller Companies
570.00
16/12/1887
JPMorgan Overseas
J.P. Morgan Asset Management
Global
298.12
21/04/1887
Alliance
Alliance Trust
Global
3,243.92
21/04/1888
Bankers
Henderson Global Investors
Global
765.40
13/04/1888
Merchants
Allianz Global Investors
UK Equity Income
604.94
16/02/1889
F&C Global Smaller Companies
F&C Management
Global
564.95
15/02/1889
Law Debenture Corporation
Law Debenture Corporation
Global
731.68
12/12/1889
Edinburgh Investment
Invesco Asset Management
UK Equity Income
1,576.54
01/03/1889
City of London
Henderson Global Investors
UK Equity Income
1,333.96
01/01/1891
BlackRock Income Strategies
BlackRock Investment Management (UK)
Flexible Investment
420.58
05/01/1898
British Empire
Asset Value Investors
Global
747.82
01/01/1898
TR Property
Thames River Capital (UK)
Property Securities
1,156.58
05/05/1905
Witan Pacific
Witan Investment Services
Asia Pacific – Including Japan
173.05
30/12/1907
Murray International
Aberdeen Asset Managers
Global Equity Income
1,335.54
18/12/1907
Witan
Witan Investment Services
Global
1,784.37
17/02/1909
Scottish Mortgage
Baillie Gifford
Global
3,791.90
01/01/1909
London & St Lawrence
London & St Lawrence
Global Equity Income
101.10
07/03/1910
Hansa Trust
Hansa Capital Partners
Global
251.06
01/01/1912
Murray Income
Aberdeen Asset Managers
UK Equity Income
535.97
07/06/1923
Finsbury Growth & Income
Frostrow Capital
UK Equity Income
785.69
30/12/1926
Temple Bar
Investec Asset Management
UK Equity Income
859.40
30/12/1926
Source: AIC using Morningstar (as at 31 March 2016)
Share price total return £100 lump sum over 25 years
Company
AIC sector
SPTR 25yr
Overall weighted average ex VCTs
901.76
Foreign & Colonial Investment Trust
Global
845.57
Scottish American
Global Equity Income
579.81
Dunedin Income Growth
UK Equity Income
571.92
JPMorgan American
North America
1080.49
Mercantile
UK All Companies
1622.41
Scottish Investment Trust
Global
651.99
Henderson Smaller Companies
UK Smaller Companies
643.73
JPMorgan Overseas
Global
741.94
Alliance
Global
743.30
Bankers
Global
1,091.39
Merchants
UK Equity Income
675.41
F&C Global Smaller Companies
Global
1,536.91
Law Debenture Corporation
Global
1,404.20
Edinburgh Investment
UK Equity Income
755.01
City of London
UK Equity Income
863.47
BlackRock Income Strategies
Flexible Investment
474.94
British Empire
Global
1,348.83
TR Property
Property Securities
1,852.58
Witan Pacific
Asia Pacific – Including Japan
357.21
Murray International
Global Equity Income
1,033.72
Witan
Global
865.59
Scottish Mortgage
Global
1,426.67
London & St Lawrence
Global Equity Income
782.26
Hansa Trust
Global
1,248.81
Murray Income
UK Equity Income
736.76
Finsbury Growth & Income
UK Equity Income
1,719.68
Temple Bar
UK Equity Income
1,108.88
Source: AIC using Morningstar (as at 31 March 2016)
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