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Average investment company outperforms the FTSE, MSCI World and average open-ended fund over 30 years

18 April 2018

Latest data compares performance over 30, 20 and 10 years.

In the year when the industry celebrates 150 years since the launch of the first investment company, the latest research on investment company long-term performance by the Association of Investment Companies (AIC) has revealed the average investment company has outperformed the FTSE All-Share, MSCI World and average open-ended fund over 30 years to the end of March 2018. The average investment company has also outperformed over 20 years. Over 10 years the average investment company has outperformed the FTSE All-Share and the average open-ended fund but is just behind the MSCI World.

Over 30 years to the end of March 2018, the average investment company has returned 1,955%. In comparison, the FTSE All-Share returned 1,196%, while the MSCI World returned 944% and the average open-ended fund returned 919%.

In cash terms, a £100 lump sum investment 30 years ago in the average investment company would now be worth an impressive £2,055. The same initial investment in the FTSE All-Share, MSCI World and the average open-ended fund would have grown to £1,296, £1,044 and £1,019, respectively.

Commenting on this latest research, Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC) said: “The pensions changes have led to more investors investing beyond their retirement and even considering the next generation when making their investment decisions. It’s heartening to see the impressive long-term performance of the average investment company against some well-known indices and the average open-ended fund.

“The closed-ended structure, ability to gear, income benefits and independent boards are unique features that deliver strong long-term performance for investment company shareholders. Investment companies are the ideal vehicle for active managers, giving them the tools they need to deliver benchmark beating returns.”

% share price total return performance over 30, 20 and 10 years

Share Price Total Return (%)

01/04/1988 - 31/03/2018

01/04/1998 - 31/03/2018

01/04/2008 - 31/03/2018

Average investment company (excl. VCT)

1,955%

510%

144%

FTSE AllSh TR GBP

1,196%

170%

91%

MSCI World Free NR USD

944%

231%

151%

IA OE Total (average open-ended fund)

919%

214%

96%

Source: Morningstar

£100 lump sum share price total return performance over 30, 20 and 10 years

Share Price Total Return (£100 Lump Sum)

01/04/1988 - 31/03/2018

01/04/1998 - 31/03/2018

01/04/2008 - 31/03/2018

Average investment company (excl. VCT)

£2,055

£610

£244

FTSE AllSh TR GBP

£1,296

£270

£191

MSCI World Free NR USD

£1,044

£331

£251

IA OE Total (average open-ended fund)

£1,019

£314

£196

Source: Morningstar

-Ends-

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Notes

  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 349 members and the industry has total assets of approximately £174 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.
  3. To stop receiving AIC press releases, please contact the communications team.

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Annabel Brodie-Smith
Communications Director
Tel: 020 7282 5580
annabel.brodie-smith@theaic.co.uk
@annabelbrodies
@aicpress

Laura Thomas
PR & Marketing Manager
Tel: 020 7282 5551
laura.thomas@theaic.co.uk
@aicpress

Elmley de la Cour
Communications Executive
Tel: 020 7282 5583
elmley.delacour@theaic.co.uk
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