Ian Cowie: top 20 investment trusts since start of Covid crash

Today, 20 February, marks five years since Covid-19 caused stock markets to crash and temporarily closed swathes of the global economy. But how did investors who bought at a bad time fare?

Data exclusively for interactive investor reveals the top 20 investment trusts, in terms of total returns since then to this week, identified by the Association of Investment Companies (AIC) and independent statisticians Morningstar.

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Our table shows how all 20 of the top investment trusts increased the value of £1,000 invested immediately before the FTSE 100 and S&P 500 began their precipitous plunge on 20 February 2020. So, it also includes how they coped with Europe’s worst war since 1945, bloodshed in the Middle East and more recent shocks, such as the DeepSeek technology shares tantrum.

JPMorgan American Ord (LSE:JAM) holds up the bottom end of our “Magnificent Seven” or leaders among the top 20 investment trusts since the Covid crash. But even the seventh-best among these leaders turned £1,000 invested on 18 February 2020, into an impressive £2,317 today.

The yearly ongoing charge is a modest 0.38%. No wonder this £2.1 billion giant, launched in 1881, trades near to par at a discount of only 0.1% below its net asset value (NAV). Underlying assets include Amazon.com Inc (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL).

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Doric Nimrod Air Three Ord (LSE:DNA3), the aircraft leasing specialist, ranks sixth in this analysis with a total return of £2,436. Most airplanes were grounded during the Covid crisis and so this £110 million fund experienced extreme turbulence, peak to trough, but its extraordinary 12.8% dividend yield propels DNA3 to trade at an eye-stretching 29% premium to its NAV.

Rockwood Strategic Ord (LSE:RKW) is another tiddler, with only £99 million assets, but this “UK Smaller Companies” fund finished this five-year period with an end value of £2,460. It seeks underlying holdings that can sustain a 15% internal rate of return (IRR) and has clearly succeeded. Once again, strong performance has pushed RKW’s shares to trade 3% above their NAV.

CQS Natural Resources Growth & Income Ord (LSE:CYN) lived up to its name, yielding 2.58% dividend income while turning £1,000 five years ago into £2,853 this week. So, perhaps it was no surprise that shareholders in this mining and commodities specialist rejected a recent bid by US activist investor Saba Capital to break it up. However, critics might claim its ongoing charge of 1.9% is expensive.

Pershing Square Holdings Ord (LSE:PSH), another “North America” sector giant with £13 billion assets, takes the bronze medal and ranks third over the past five years by trebling its original £1,000 to £3,094 this week. Its modest dividend yield of just under 1.2% is growing strongly, rising by an annual average of 10% over the past five years, but PSH shares continue to be priced 27% below their NAV. Underlying holdings are led by the Canadian alternative assets fund manager, Brookfield Corp Registered Shs -A- Limited Vtg (NYSE:BN); with Restaurant Brands International Inc (NYSE:QSR), which owns Burger King, and Chipotle Mexican Grill not far behind.

Geiger Counter Ord (LSE:GCL) grabs the silver medal with a total return of £3,229 from its portfolio of underlying companies engaged in the exploration, development and production of uranium to supply the nuclear power industry. Once again, ongoing charges look on the high side at 2.63% but strong medium and long-term returns have squeezed GCL’s discount down to -2.5%. However, bargain-hunters may note it has shrunk shareholders’ capital by -23% over the past year, which might represent an attractive entry point for those who believe its returns will revert to their long-term mean or average.

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3i Group Ord (LSE:III), the private equity specialist with total assets of £24.9 billion gained the gold medal and top place over the past five years, by more than quadrupling its original investment to an end value of £4,134 this week. Its biggest underlying holding is the Continental retailer, Action, which accounts for more than half its assets and has propelled this trust’s shares to trade 69% above their NAV.

Sad to say, none of my investment trusts got anywhere near the Magnificent Seven although India Capital Growth Ord (LSE:IGC) and Polar Capital Technology Ord (LSE:PCT) did rank 12th and 13th over the past five years with end values of £2,194 and £2,169 respectively.

Top 20 investment trusts over five years

Source: theaic.co.uk/Morningstar. Past performance is not a guide to future performance.

Nick Britton, research director of the AIC, told me: “The past five years have been an unsettled and often alarming period, so it’s reassuring to see that the average investment trust has returned £1,513 for every £1,000 invested during this time.

“A broad mix of trusts have done well, from private equity and commodities to technology and more mainstream equity strategies, showing the importance of having a diversified portfolio. Investment trusts continue to help meet people’s financial needs, whatever is going on in the world.”

With the Covid crisis receding into the rear-view mirror and talks under way to end the fighting in Ukraine, let’s hope the next five years are less dramatic and even more rewarding.

Ian Cowie is a freelance contributor and not a direct employee of interactive investor.

Ian Cowie is a shareholder in Apple (AAPL), India Capital Growth (IGC), Microsoft (MSFT) and Polar Capital Technology (PCT) as part of a globally diversified portfolio of investment trusts and other shares.