In a financial world of short-termism investment trusts are reassuringly old, with a large number equalling or exceeding the Queen’s 90 years.
On the 21st April the world’s oldest reigning monarch and Britain’s longest reigning monarch, Queen Elizabeth II, celebrates her 90th birthday. She shares her birthday year with Finsbury Growth & Income and Temple Bar (we’re confident she’ll be excited about this too).
According to the AIC (Association of Investment Companies), 27 investment trusts (that’s 10%) equal or exceed 90 years, with the oldest, Foreign & Colonial, pre-dating her parents reign having being established when Queen Victoria was on the thrown back in 1868.
John Newlands, head of investment trust research at Brewin Dolphin, and having written several books on the sector is a sage of all things investment trusts, wrote about the 1920’s, the decade in which the Queen was born in his book ‘Put Not Your Trust In Money’.
History buffs and investors alike will be interested to learn that in the early part of the last century (and before), equities tended to be eschewed by investment trusts in favour of Bonds. 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….” This looks eerily similar to the economic situation we find ourselves in today.
The book continues “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 of the shares the early trusts were investing in will not be familiar to us today. For example, Foreign & Colonial Investment Trust’s first equity investments included ‘Liebig’s Extract of Meat’, ‘Texas Gulf Sulphur’, and ‘Swedish Match’, who are still in business today and listed in Stockholm, though no longer a holding in the F&C portfolio.
Foreign and Colonial Investment Trust is the oldest investment trust in the world, having reached the dizzy age of 148. Its 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, which is managed by Alistair Mundy (we interviewed him recently and you read that here), was 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).
Fit for a Queen: Investment Trusts aged 90 years and more
Investment Trust
Management group
AIC sector
Total assets (£m)
Launch date
Foreign & Colonial Investment Trust
F&C Management
Global
£2,878
01/01/1868
Scottish American
Baillie Gifford
Global Equity Income
£435
31/12/1873
Dunedin Income Growth
Aberdeen Asset Managers
UK Equity Income
£435
01/02/1873
JPMorgan American
J.P. Morgan Asset Management
North America
£899
18/06/1881
Mercantile
J.P. Morgan Asset Management
UK All Companies
£2012
08/12/1884
Scottish Investment Trust
Scottish Investment Trust
Global
£791
27/07/1887
Henderson Smaller Companies
Henderson Global Investors
UK Smaller Companies
£570
16/12/1887
JPMorgan Overseas
J.P. Morgan Asset Management
Global
£298
21/04/1887
Alliance
Alliance Trust
Global
£3,244
21/04/1888
Bankers
Henderson Global Investors
Global
£765
13/04/1888
Merchants
Allianz Global Investors
UK Equity Income
£605
16/02/1889
F&C Global Smaller Companies
F&C Management
Global
£565
15/02/1889
Law Debenture Corporation
Law Debenture Corporation
Global
£732
12/12/1889
Edinburgh Investment
Invesco Asset Management
UK Equity Income
£1,576
01/03/1889
City of London
Henderson Global Investors
UK Equity Income
£1,334
01/01/1891
BlackRock Income Strategies
BlackRock Investment Management (UK)
Flexible Investment
£420
05/01/1898
British Empire
Asset Value Investors
Global
£748
01/01/1898
TR Property
Thames River Capital (UK)
Property Securities
£1,156
05/05/1905
Witan Pacific
Witan Investment Services
Asia Pacific - Including Japan
£173
30/12/1907
Murray International
Aberdeen Asset Managers
Global Equity Income
£1,335
18/12/1907
Witan
Witan Investment Services
Global
£1,784
17/02/1909
Scottish Mortgage
Baillie Gifford
Global
£3,792
01/01/1909
London & St Lawrence
London & St Lawrence
Global Equity Income
£101
07/03/1910
Hansa Trust
Hansa Capital Partners
Global
£251
01/01/1912
Murray Income
Aberdeen Asset Managers
UK Equity Income
£536
07/06/1923
Finsbury Growth & Income
Frostrow Capital
UK Equity Income
£786
30/12/1926
Temple Bar
Investec Asset Management
UK Equity Income
£859
30/12/1926
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.”