By Annabel Brodie-Smith
The tree is up and Christmas and New Year festivities are fast approaching.
Despite the shocks and surprises of 2016, overall it’s been a good year for our investors with the average investment company this year up 12% to end November.
In Compass this month we are looking forward to what may be in store in 2017. You may be interested in the results of our fund manager survey. To quote Macmillan, ‘events dear boy events’ have taken over, with pressing geopolitical fears at the top of managers’ agenda. Yet most managers are cautiously optimistic on the outlook for equities and despite Trump’s unexpected win it seems the American dream remains alive and well amongst investment company managers with the US being the country most widely expected to outperform in 2017 and the next five years.
It’s well worth also looking at our panel discussion video on the prospects for 2017 with three very well-known managers, Bruce Stout from Murray International, Peter Ewins from F&C Global Smaller Companies and James Henderson, manager of Lowland, Henderson Opportunities and Law Debenture.
This month Ian Sayers, the AIC’s Chief Executive, examines a successful year for investment companies with the figures to end November showing the average investment company significantly outperforming the FTSE All-share over 1, 3, 5 and 10 years. Ian also wonders “whether 2017 will be the year when the merits of the closed-ended structure receive true recognition” after the difficulties of the open-ended property sector, which has reminded investors of “the genuine advantages of holding illiquid asset classes in a closed-ended structure.”
It’s also been a good year for investors in Baillie Gifford’s Monks Investment Trust which is up 29% over the year to end November. This month Monks’ manager, Charles Plowden, explains their investment philosophy in his article, “Our job, as long-term investors, is to look past short-term headlines and identify those businesses that can sustainably grow their cash flows and earnings at above average rates.”
Ever wondered why this investment company is called Monks? Well, Monks was one of three companies, including The Friars Investment Trust and The Abbots Investment Trust founded in the late 1920s and all three were named after the company secretary’s office on the street, Austin Friars in the City of London. In 1931 Baillie Gifford took over the management of all three companies and in 1932 Monks became a founder member of our trade association. The considerable history of many investment companies puts any short-term worries about markets or political events into perspective.
Wishing you the best of luck with your investments in 2017.
Merry Christmas and a Happy New Year.
Annabel Brodie-Smith, Communications Director, AIC