Figures from AIC show that 10% (27 by number) of conventional members have been around for 90 years or longer and continue to thrive.
Of these, nearly half are featured in the AIC’s dividend heroes list – companies that have increased their dividends for 20 years or more.
On the 21st April the world’s oldest reigning monarch and Britain’s longest reigning monarch, Queen Elizabeth II, celebrates her 90th birthday.
A queen is born, investment trusts move into equities
According to John Newlands in his book ‘Put Not Your Trust In Money’, which was published by the AIC, by the 1920s, the decade in which the Queen was born, “many investment trusts were starting to shift the balance of their investments away from purely fixed interest portfolios and into equities.” Some of these names look less than familiar today, however. For example, Foreign & Colonial Investment Trust’s first industrial investments included Liebig’s Extract of Meat, Swedish Match and Texas Gulf Sulphur, which were bought in 1926.
One extract from Newlands’ book about the early investment trusts holds particular resonance to this day: John Newlands writes: “It is essential to realize that investment, until the turn of the 20th century, and beyond, was all about income, rather than capital growth. Interest rates were low, and inflation negligible…investors had very few options….”
Foreign and Colonial Investment Trust is the oldest company in the investment company sector (148 years) whose original aim was to help the ‘investor of moderate means’ have ‘the same advantage as the large capitalist in diminishing risk in Foreign & Colonial stocks by spreading the investment over a number of stocks’. However, as well as the Queen’s 90th birthday, 2016 also sees the 90th anniversary for both Finsbury Growth & Income and Temple Bar.
Finsbury Growth & Income was launched on 15 January 1926 as the Scottish Cities Investment Trust, and remains Scottish domiciled today, despite being managed from London. By 1958 Finsbury Growth & Income had net assets of approximately £1m, which grew to £3.3m by 1968 and to £24m by 1990. The net asset value now exceeds £780m (as at end of March 2016).
Temple Bar launched in 1926 as The Cable, Telephone and General Trust Company Ltd and since then has confronted the Great Crash of the 1930s, the inflationary 1970s and subsequent periods of equity market strength and weakness. Today, its total assets are over £800m (as at end of March 2016).
Commenting on the longevity of investment companies John Newlands, Head of Investment Trust Research at Brewin Dolphin Ltd said: “The fact that a number of investment trusts had already been operating for decades when the Queen was born – and continue to trade today – shows that far from being old-fashioned, they have evolved and improved with the times. If they hadn’t they would have faded away, as have so many once famous large UK companies from Marconi to Woolworths. I would add that the long-term compound investment returns of many of these veteran investment trusts are not to be sneezed at, either.”
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies said: “It is a testament to the sector that 10% of investment companies have been around for the 90 years since the Queen was born or in many cases a good deal longer. Investment companies have weathered wars, booms and busts and they are still continuing to deliver strong long-term performance to their shareholders today. Long-term investing doesn’t get much more long-term than this.”
Investment companies 90+ years old
| Company | Management group | AIC sector | Total assets (£m) | Launch date |
|---|---|---|---|---|
| Foreign & Colonial Investment Trust | F&C Management | Global | 2,878.32 | 01/01/1868 |
| Scottish American | Baillie Gifford | Global Equity Income | 434.92 | 31/12/1873 |
| Dunedin Income Growth | Aberdeen Asset Managers | UK Equity Income | 434.92 | 01/02/1873 |
| JPMorgan American | J.P. Morgan Asset Management | North America | 899.23 | 18/06/1881 |
| Mercantile | J.P. Morgan Asset Management | UK All Companies | 2,012.39 | 08/12/1884 |
| Scottish Investment Trust | Scottish Investment Trust | Global | 790.77 | 27/07/1887 |
| Henderson Smaller Companies | Henderson Global Investors | UK Smaller Companies | 570.00 | 16/12/1887 |
| JPMorgan Overseas | J.P. Morgan Asset Management | Global | 298.12 | 21/04/1887 |
| Alliance | Alliance Trust | Global | 3,243.92 | 21/04/1888 |
| Bankers | Henderson Global Investors | Global | 765.40 | 13/04/1888 |
| Merchants | Allianz Global Investors | UK Equity Income | 604.94 | 16/02/1889 |
| F&C Global Smaller Companies | F&C Management | Global | 564.95 | 15/02/1889 |
| Law Debenture Corporation | Law Debenture Corporation | Global | 731.68 | 12/12/1889 |
| Edinburgh Investment | Invesco Asset Management | UK Equity Income | 1,576.54 | 01/03/1889 |
| City of London | Henderson Global Investors | UK Equity Income | 1,333.96 | 01/01/1891 |
| BlackRock Income Strategies | BlackRock Investment Management (UK) | Flexible Investment | 420.58 | 05/01/1898 |
| British Empire | Asset Value Investors | Global | 747.82 | 01/01/1898 |
| TR Property | Thames River Capital (UK) | Property Securities | 1,156.58 | 05/05/1905 |
| Witan Pacific | Witan Investment Services | Asia Pacific – Including Japan | 173.05 | 30/12/1907 |
| Murray International | Aberdeen Asset Managers | Global Equity Income | 1,335.54 | 18/12/1907 |
| Witan | Witan Investment Services | Global | 1,784.37 | 17/02/1909 |
| Scottish Mortgage | Baillie Gifford | Global | 3,791.90 | 01/01/1909 |
| London & St Lawrence | London & St Lawrence | Global Equity Income | 101.10 | 07/03/1910 |
| Hansa Trust | Hansa Capital Partners | Global | 251.06 | 01/01/1912 |
| Murray Income | Aberdeen Asset Managers | UK Equity Income | 535.97 | 07/06/1923 |
| Finsbury Growth & Income | Frostrow Capital | UK Equity Income | 785.69 | 30/12/1926 |
| Temple Bar | Investec Asset Management | UK Equity Income | 859.40 | 30/12/1926 |
Source: AIC using Morningstar (as at 31 March 2016)
Share price total return £100 lump sum over 25 years
| Company | AIC sector | SPTR 25yr |
|---|---|---|
| Overall weighted average ex VCTs | 901.76 | |
| Foreign & Colonial Investment Trust | Global | 845.57 |
| Scottish American | Global Equity Income | 579.81 |
| Dunedin Income Growth | UK Equity Income | 571.92 |
| JPMorgan American | North America | 1080.49 |
| Mercantile | UK All Companies | 1622.41 |
| Scottish Investment Trust | Global | 651.99 |
| Henderson Smaller Companies | UK Smaller Companies | 643.73 |
| JPMorgan Overseas | Global | 741.94 |
| Alliance | Global | 743.30 |
| Bankers | Global | 1,091.39 |
| Merchants | UK Equity Income | 675.41 |
| F&C Global Smaller Companies | Global | 1,536.91 |
| Law Debenture Corporation | Global | 1,404.20 |
| Edinburgh Investment | UK Equity Income | 755.01 |
| City of London | UK Equity Income | 863.47 |
| BlackRock Income Strategies | Flexible Investment | 474.94 |
| British Empire | Global | 1,348.83 |
| TR Property | Property Securities | 1,852.58 |
| Witan Pacific | Asia Pacific – Including Japan | 357.21 |
| Murray International | Global Equity Income | 1,033.72 |
| Witan | Global | 865.59 |
| Scottish Mortgage | Global | 1,426.67 |
| London & St Lawrence | Global Equity Income | 782.26 |
| Hansa Trust | Global | 1,248.81 |
| Murray Income | UK Equity Income | 736.76 |
| Finsbury Growth & Income | UK Equity Income | 1,719.68 |
| Temple Bar | UK Equity Income | 1,108.88 |
Source: AIC using Morningstar (as at 31 March 2016)
