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Trusts that have reigned longer than the Queen

Trusts that have reigned longer than the Queen

By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY, 21 May 2022:

Any investment that has generated wealth since before the Coronation must have firm foundations. That is true for the 36 investment trusts that predate the Queen’s accession to the throne.

They have survived the stock market crashes that peppered the early 1970s, October 1987 (Black Monday), 2000 (the bursting of the dotcom bubble), 2008 and 2020 in the wake of the pandemic. Some of the oldest trusts have invested customers’ money through the reign of six Monarchs.

So what is the secret to their longevity?

The earliest trusts were created under Queen Victoria to allow ordinary investors to benefit from global industrial expansion.

Foreign & Colonial was the first, established in 1868 and investing in government bonds from across the world, including South America. Later, Scottish American funded the construction of the US railways while Scottish Mortgage offered mortgages to Malaysian plantation owners who produced the rubber used in the tyres of the Model T Ford car…

Platinum performances

According to Investment platform AJ Bell, over the past 20 years, Scottish Mortgage has turned £1,000 into £13,150. BlackRock Smaller Companies, founded in 1906 as the North British Canadian Investment Company, has turned the same sum into £9,349. No trusts predating the Queen’s accession would have lost money over 20 years. The lowest return is 106.3 per cent from Aberdeen Diversified Income & Growth.

James Carthew, investment trust specialist at fund data group QuotedData, agrees the flexibility older trusts have shown has been key to their success, saying: ‘One of the strengths is their ability to adapt to changing market environments.’

An independent board steers the trust, hiring and firing investment managers, adapting objectives and driving down management fees.

However, Carthew says most of the older trusts focus on equities. So investors wanting to invest in different types of assets, such as property, infrastructure and renewable energy, will need to look at newer trusts.