I have a bunch of performance stats for more than 200 London-quoted investment trusts and similar offshore funds whose market values are £40m or higher. The lion's share of the industry, their total worth is over £50bn. Twice a year, at the end of Apr. and Oct., I hope to update the database and take a quick trip through broad trends.

As a long-haul investor I disregard the residuum of split trusts and a handful which are closing, such as Ottoman and Electric & General. I have set the adolescent infrastructure sector to one side for future analysis.

This first report takes in six months of chronic uncertainty in world markets, when the FT All-Share Index declined by 7%. My eye is on the slower twists and turns of rolling results, beginning with the best and worst over five years. All values assume £100 invested with income ploughed back into more of the same, using share prices to the close last Fri., Oct. 28.

Numbers come from the Association of Investment Companies website supplied by Morningstar, except for about thirty companies which it does not cover, where data is from FE TrustNet. GRN, JER and CAY denote funds registered in Guernsey, Jersey or the Caymans:

Trust                                      Return
                                         (5 years)
 
 
City Natural Resources High Yield            £247
Scottish Oriental Smaller Cos                £237
Aberdeen Asian Smaller Cos                   £225
Templeton Emerging Markets                   £219
Standard Life UK Smaller Cos                 £206
Aberdeen Asian Inc [JER]                     £203
Schroder Oriental Inc [GRN]                  £193
Ruffer [GRN]                                 £188
Lindsell Train                               £188
Invesco Asia                                 £188
 
AVERAGE (176 companies)                      £119
 
VinaCapital Vietnam Opp. Fd [CAY]             £64
Arc Capital                                   £61
Majedie Invs                                  £60
New Star                                      £56
Japan Residential Inv Co [GRN}                £54
Picton Property Inc [GRN]                     £52
JPMorgan Japan Smaller Cos                    £51
Invista Foundation Property [GRN]             £45
3i                                            £37
Candover Invs                                 £27

This listing reflects the time since just before nerves first grew frayed in early 2007. The mystic East dominates, including even earthquake-hit Japan after its 20 years of deflationary malaise; the region is or was perceived as somewhat discrete from the West's banking blunders, real-estate slump and sickly economic recovery. A couple of 'conviction' funds*, freewheeling mavericks, are in the Top Ten, of which Ruffer (RICA) placed a big bet in shares that Japan's sun would rise again. The medium-term laggards, however, are headed by a Vietnamese equity growth specialist (this country has been a disaster area), a Japanese homes investor and a Japanese smaller-companies fund.

Elsewhere, shockingly, the last name but one is 3i: still the Numero Uno of the industry by capitalisation with its string of global private-equity stakes. Another large private equity punter, Candover, did even worse, but see below. New Star is a Global Growth relic of the failed management group of that name; Brompton Asset Management is attempting salvage. Arc Capital does PE in Asia, Majedie is also Global Growth, and Picton Property Income is the former ING UK Real Estate Income fund.

Ten years is a better measure of durability and superiority for a passive punter such as me. For nine trusts the decade's performance is a blank because they do not belong to the AIC and Trustnet only goes back five years. Winners and losers since 2001, when the dotcom disillusion was still raging:

Trust                                      Return
                                        (10 years)
 
BlackRock World Mining                       £862
Aberdeen Asian Smaller Cos                   £829
JPMorgan Russian Secs                        £801
Scottish Oriental Smaller Cos                £720
Templeton Emerging Markets                   £668
JPMorgan Indian                              £667
BlackRock Latin American                     £651
JPMorgan Emerging Markets                    £610
Baring Emerging Europe                       £585
Aberdeen New Dawn                            £565
 
AVERAGE (123 companies)                      £266
 
Edinburgh US Tracker                         £110
RCM Technology                               £110
Invesco Leveraged High Yield [JER]           £109
Shires Inc                                   £103
Fidelity Japanese Values                     £103
International Biotechnology                  £100
JPMorgan Japanese                             £88
JPMorgan Japan Smaller Cos                    £71
BlackRock New Energy                          £63
Dolphin Capital Investors                     £31

BlackRock World Mining, one of the biggest issues, proves that elephants can gallop to the head of the crowd when metals prices keep booming under pressure of demand from east of Suez. All the other winners, where you could have more than quintupled your money, farm into the rebalancing of the world economy under communists, ex-communists, Indian dirigistes, Brazilian semi-socialists and other species of non-neoliberal.

The bad apples are more architects of their own downfall, in sectors where other trusts have not rotted. Edinburgh US Tracker simply mirrors Wall Street's overall aimlessness. Shires Income is an Aberdeen high-income supplier which supplied too much, too long, for its balance sheet's health. Fidelity Japanese Values, JPMorgan Japanese and JPMorgan Japan Smaller Companies remind us that though the old empire may have brightened a little in investors' eyes by contrast with western mishaps, the legacy of Nippon's Lost Two Decades won't be easy to shake.

BlackRock New Energy (environmentally correct kit), International Biotechnology and Allianz's RCM Technology exemplify themes that have been going to hit the jackpot for ages but somehow never quite take off. (Mind you, that was true of Brazil for about a century.) AIM-quoted Dolphin Capital Investors is developing beachfront leisure resorts in Greece, Cyprus and Third World countries, which maybe says all that needs saying.

These strictures may be tempered by a snapshot of recent performance, for the weakest may have found new vitality (and vice versa). So I compare the total return over one and five years, calculating the former as a ratio of the latter. For example, Candover-- a struggler in the longer run-- perked up in 2010-11, with a TR of £97 against £66 in 2006-11 for a ratio of 249:

Trust                                      Return
                                    1 yr v. 5yrs (%)
 
 
Candover Invs                                 249
Invista Foundation Property [GRN]             226
JPMorgan Japan Smaller Cos                    214 
Picton Property Inc [GRN]                     184
New Star                                      181
3i                                            180
Fidelity Japanese Values                      162 
Baillie Gifford Shin Nippon                   159
Troy Inc & Growth                             155
Standard Life Euro Private Equity             153
 
AVERAGE (165 companies)                        93 
 
Henderson Far East Inc [JER]                   53
New India                                      52
Fidelity Asian Values                          51
Edinburgh Dragon                               49
JPMorgan Chinese                               47
BlackRock Latin American                       45
Aberdeen Asian Smaller Cos                     44 
City Natural Resources High Yield              42
Scottish Oriental Smaller Cos                  41
Templeton Emerging Markets                     41

The feeling that commercial property, which crashed before most sectors, bottomed out some time in the past twelve months has assisted Invista Foundation and Picton. They are buttressed by high running yields from established rent rolls. Two Japanese equity prospectors that laboured over ten years, JPMorgan Japan Smaller Companies and Fidelity Japanese Values, are off the canvas-- largely since my first survey six months ago. So are New Star and 3i. Troy Income & Growth is a dividend-dispenser which got into the same hot water as its stablemate Shires, but is being put back on its feet by Sebastian Lyon and Francis Brooke of Troy Asset Management.

Conversely we saw reactions against previous favourites, above all Mark Mobius's Templeton Emerging Markets. The huge pioneer of EM investing now props up the table for midterm deterioration. Geograhically focused issues going downhill are concentrated on the BRICs-- especially China, which people may be tired of hearing cried up. See also the hype and anti-climax of Anthony Bolton's Fidelity China Special Situations, which lost one-third of its value in its first year.

These days punters thirst for income, but on an average yield of 2.2% the two hundred trusts in my database are supplying only two-thirds as much as the market. For the adventurous there are some juicy ones, though:

Trust                                       Yield
                                              (%)
 
Picton Property Inc [GRN]                     9.5
IRP Property Invs [GRN]                       9.4
Invista Foundation Property [GRN]             9.3
Invesco Leveraged High Yield [JER]            9.2
ISIS Property [GRN]                           8.2
Standard Life Invs Prop. Inc [GRN]            7.7
European Assets NV                            7.7
MedicX Fd [GRN]                               7.3
Princess Private Equity Hldg [GRN]            7.2
New City High Yield [JER]                     6.7
 
AVERAGE (210 companies)                       2.2

These are mostly in commercial property funds whose rents are not rock-solid in today's atmosphere. Invesco Leveraged High Yield specialises in borrowing to buy junk bonds, and on a discount of 8% feels it should get more respect for its skill. European Assets, lately chewed over on this board, is a faintly risible and complex set-up whose 'yield' partly consists of gnawing on its own tail. MedicX, despite its monicker, is a UK property investor building for the NHS.

New City High Yield is a UK High Income sector member, where others also return over 6%: Henderson High Income, City Merchants High Yield and Henderson's fairly new Diversified Income. However, the ones I picked for sustainable income in 'baskets' mostly yield between 3.5% and 5%. More than two-thirds of ITs yield under 3%; about sixty do not pay out regularly at all, many in the underworld of offshore registration and narrow specialisation where dividends are for wimps.

Discount at the end of last month averaged 9% across the board, obviously with vast sectoral and company-specific variances:

Trust                                     Premium/
                                          Discount
                                               (%)
 
VinaCapital Vietnam Opp. Fd [CAY]            41.9
Capital Gearing                              15.3
Lindsell Train                               14.7
Burford Cap [GRN]                            13.5
MedicX Fd [GRN]                              10.1
RIT Capital Partners                         10.0
Duet Real Estate Finance [GRN]                9.2
New City High Yield [JER]                     9.1
Law Debenture                                 8.1
Aberdeen Asian Inc [JER]                      4.6
 
Average discount (210 companies)             -9.0
 
Graphite Enterprise                         -34.6
Picton Property Inc [GRN]                   -35.3
Candover Invs                               -36.2
Phaunos Timber Fd [GRN]                     -38.3
Pantheon Intnl Participns                   -41.2
3i                                          -42.4
Invista European Real Estate [LUX]          -43.1
Dunedin Enterprise                          -43.4
Standard Life Euro Private Equity           -46.8
Vietnam Infrastructure [CAY]                -52.4

Among the rare premiums of more than 10%, three Conviction trusts stand out: Capital Gearing, Lindsell Train and RIT. They are being hailed for their different ways of negotiating the perils of the past few years. Burford Capital's premium is my estimate: it is a new launch in the sordid business of financing American civil litigation for a cut of the wins, and has no yet fully committed its war chest. Law Debenture, a large mainstream Global Growth trust, has been garlanded for the way its securities administration and custodian subsidiary anchored revenues during the crash.

Relatively non-fungible funds where valuations and realisations are sticky have gone to big discounts. Not only private equity portfolios and office blocks, but Phaunos Timber's woodland and (that land of non-opportunity again) Vietnam Infrastructure: a Cayman operation which I had to check was for real.

Across the whole waterfront, 37 out of 210 trusts trade above net asset value, whereas 134 are on discounts of 5% or bigger. The twenty issues on the costliest ratings include, unwontedly, four income specialists: Murray International, Merchants, City of London and Edinburgh, whose adoption by divi-meister Neil Woodford (now running more money than any other mutual fund manager) attracts fans.

Mood swings have altered the pecking order since Apr. The twenty largest investment trusts by capitalisation, accounting for almost half the industry, are:

 
Trust                                       Market                  Rank           Yield        Disct
                                        value (£m)              Oct      Apr         (%)          (%)
 
 
3i                                           2166                 1        1         0.6        -42.4
Alliance                                     2056                 2        2         2.5        -16.2
RIT Capital Partners                         2010                 3        4         0.3         10.0
Templeton Emerging Markets                   1761                 4        3         0.7         -6.2
Foreign & Colonial                           1694                 5        6         2.3        -10.8
Scottish Mortgage                            1674                 6        5         1.8         -9.7
BlackRock World Mining                       1087                 7        7         0.9        -16.6
Murray Intnl                                  950                 8       12         3.7          4.5
UK Commercial Property [GRN]                  930                 9       11         6.7          2.7
Edinburgh                                     916                10       14         4.3          3.2
Mercantile                                    909                11        8         3.8        -15.0
Caledonia                                     891                12        9         2.3        -21.9
Witan                                         860                13       10         2.6        -12.2
Monks                                         845                14       13         0.9        -12.8
British Empire Secs & Gen                     723                15       15         1.7         -6.2
F&C Commercial Property [GRN]                 672                16       17         5.8          3.8
City of London                                651                17       21         4.6          3.2
Genesis Emerging Markets [GRN]                607                18       17         0.0          0.0
BH Macro Sterling [GRN]                       591                19        -         0.0          1.9
JPMorgan Emerging Markets                     583                20       20         0.6         -7.8

3i somehow hangs on to the blue riband, with another sick one, Alliance, on its heels. Jacob Rothschild's RIT, where the old man is becoming more hands-on since his son quit, is close behind: nor does Lord R need to pay out for popularity, for the family trust despises dividends and short-termism in general. RIT swapped chart placings with Templeton Emerging Markets, but the next big gainer, Murray International, is a highish-yielding Global Growth & Income player of bourses which sticks mainly to developed economies. Amid the encircling gloom of real estate, Guernsey's UK Commercial Property has made up for a poor total return over five and one years (it floated in 2005) with a strong dividend stream, conservatively obtained. The 'Woody effect' (see above) lifted Edinburgh, and City of London joined in the trend, but small-company expert Mercantile encountered pessimism about the outlook for its vast array of tiddlers.

Two big old international equity trusts, Wiran and Monks, slid a little as sentiment moved against foreign generalists. Two Channel Islands names which are little known for their size are Genesis Emerging Markets, one of the oldest Eastern Europe equity venturers (1989), and BH Macro Sterling, a feeder to Brevan Howard Master Fund which trades fixed interest and currencies.

Finally, a summary of results for the whole universe of trusts and for major types, both globally and UK-oriented:

Trust                                       M/cap                Share price total return               Yield          Disct
                                               £m            1yr           5yrs          10yrs            (%)            (%)  
 
 
Total (210)                               56105.0           £100           £119           £266            2.2           -9.0
 
Conventional growth (42)                  17374.1           £101           £116           £213            2.1           -7.7
Conventional growth & inc (23)             6932.0           £109           £119           £204            4.1           -1.1
Conviction (10)                            4654.8           £105           £133           £283            1.6           -3.6
Basket of Seven                            1393.7            £95           £156           £311            3.9           -8.9         

Growth & Income, responding to dividend-hunger, has beaten the industry TR over the past year when its discount all but evaporated. G&I is in line over five years after lagging in the previous five. Growth funds, which are worth nearly three times as much, have been close to the norm since 2006 and previously less far behind it than G&I. The Growth sectors' discount is much bigger, but below an industry average swollen by so many illiquid and esoteric companies.

The Conviction band of ten which go their own ways* (defined by me, not the AIC) easily outpaced both orthodox types of IT in mid-decade-- less so when the crisis hit. They have slipped a little behind G&I in the past year, handicapped by their reluctance to distribute income. The Basket of Seven (see Investing for Income) which I recommend for indefinitely rising dividends** is appended for comparison, though the capital-growth part of total return and reinvesting income to that end are not in its manual.
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* British Empire, Caledonia, Capital Gearing, Hansa, Independent, Lindsell Train, Manchester & London, Personal Assets, RIT Capital Partners, Ruffer Investment.

** F&C Capital and Income, JPMorgan Claverhouse, Lowland, Mercantile, Murray International, Perpetual Income & Growth, Scottish American.