Which government was best for UK investment trusts?
The Association of Investment Companies (AIC) has released data on the performance of UK-focused investment trusts in each parliament since 1987.
The Association of Investment Companies (AIC) has released data on the performance of UK-focused investment trusts in each parliament since 1987.
Investment trusts investing in UK equities performed best of all under John Major’s government between 1992 and 1997, with an annualised return of 15.5%. This was very closely followed by the Conservative / Liberal Democrat coalition of 2010 to 2015 when David Cameron was Prime Minister, which saw returns of 15.4% for the average UK trust.
The third best parliament for UK investment trusts was the first term of Tony Blair, which ran from 1997 to 2001 and saw investment trusts deliver annualised returns of 12.2%.
While no UK parliament saw a negative return for investment trusts, the worst annualised returns were experienced in Tony Blair’s second term from 2001 to 2005 (0.4%). The current parliament has been the second worst for UK investment trusts, with returns of 2.8% so far.
Performance of the average UK equity investment trust in each parliament since 1987
Parliament | Prime minister | Start date | End date | Cumulative return | Annualised return |
|---|---|---|---|---|---|
1987-1992 | Thatcher / Major | 11 June 1987 | 9 April 1992 | 33.3% | 6.1% |
1992-1997 | Major | 9 April 1992 | 1 May 1997 | 107.7% | 15.5% |
1997-2001 | Blair | 1 May 1997 | 7 June 2001 | 60.3% | 12.2% |
2001-2005 | Blair | 7 June 2001 | 5 May 2005 | 1.7% | 0.4% |
2005-2010 | Blair / Brown | 5 May 2005 | 6 May 2010 | 39.9% | 6.9% |
2010-2015 | Cameron | 6 May 2010 | 7 May 2015 | 104.9% | 15.4% |
2015-2017 | Cameron / May | 7 May 2015 | 8 June 2017 | 24.2% | 10.9% |
2017-2019 | May / Johnson | 8 June 2017 | 12 Dec 2019 | 15.3% | 5.8% |
2019- | Johnson / Truss / Sunak | 12 Dec 2019 |
| 12.5% | 2.8% |
Source: theaic.co.uk / Morningstar. Share price total return. Ordinary share classes only. Data to 21/03/24. Average UK equity investment trust includes the weighted average of UK All Companies, UK Equity Income and UK Smaller Companies sectors, and the trust in the UK Equity & Bond Income sector.
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Clearly politics is only one of a number of influences on the UK stock market, and our research shows that UK investment trusts can thrive under governments of different political leanings.
“Performance of the average UK investment trust has varied from over 15% a year under John Major’s government in the 1990s to just 0.4% in Tony Blair’s second parliamentary term.”
Nick Britton, Research Director of the Association of Investment Companies (AIC)
“Performance of the average UK investment trust has varied from over 15% a year under John Major’s government in the 1990s to just 0.4% in Tony Blair’s second parliamentary term. The current parliament, which has coincided with the global pandemic, higher inflation and interest rates, and wars in Ukraine and the Middle East, has so far been the second-worst for UK investment trusts since 1987, though there is still time for this to change before the next election.”
- ENDS -
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Notes to editors
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 334 members and the industry has total assets of approximately £272 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- 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.
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