We lift the curtain to reveal the best performing sectors over the past decade
Biotechnology & Healthcare was the top performing investment company sector of the last decade, data from the AIC can reveal. The sector produced an impressive return of 491% from 2010 to 2019, compared to a return of 198% for the average investment company over the same period.
Investment companies focused on smaller companies also delivered strong returns. The UK Smaller Companies and Global Smaller Companies sectors were the second and third best performing sectors of the decade and delivered 379% and 330% respectively. European Smaller Companies (10th) also featured in the top ten.
% is weighted average share price total return. Source: AIC/Morningstar.
Annabel Brodie-Smith, Communications Director of the AIC, said: “It’s encouraging to see a diverse spectrum of investment company sectors perform so strongly over the last decade. While Biotechnology & Healthcare was the top performing sector by some margin, two UK equity sectors made it into the top ten despite the Brexit referendum and subsequent lack of clarity surrounding the UK’s exit.
“The closed-ended investment company structure lends itself particularly well to illiquid alternative investments and over the past decade the Private Equity and Infrastructure sectors have both delivered particularly strong returns. Three smaller company sectors feature in the top ten best performers, demonstrating that investment companies are the best vehicle for holding smaller companies which can be hard to sell in times of stress. In addition, investors who have favoured investment companies to gain overseas exposure via the Japan, Global and North America sectors have been handsomely rewarded.
“It’s always interesting to look back at the best performing companies, but it’s important to remember that past performance is not an indicator of future returns. Investment companies cover a broad variety of sectors, risk profiles and geographical exposure to match a range of investor needs. When investing you should consider your objectives and the level of risk you are willing to take and, if you have any concerns, you should speak to a financial adviser.”
