Emerging markets investment companies are top performers in last decade, research indicates

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Written by Ray Clancy

Monday, 31 May 2010 09:00

Emerging markets investment companies dominate the consistent outperformers of the decade, research from the Association of Investment Companies shows.

It looked at annual returns for every year for the last 10 years and each company’s performance was benchmarked against the overall average performance of the investment company industry and the companies that most consistently outperformed on an annual basis were identified.

It found that the five most consistent performers over the last ten years have been BlackRock World Mining, followed by Fidelity European Values, HG Capital, Invesco Perpetual UK Smaller Companies and British Empire Securities & General.

The top 20 most consistently performing investment companies represented 12 different AIC sectors. Emerging Markets demonstrated their recent dominance, with 10 of the top 20 companies coming from this region. The most represented individual sector was Asia Pacific, excluding Japan, with four investment companies, followed by Global Emerging Markets and UK Smaller Companies with three companies from each sector in the list. There were two European Emerging Markets companies amongst the consistent outperformers.

The Association also compared the 10 year share price performance figures with the results for the 20 most consistent outperforming investment companies. It put BlackRock World Mining top on performance as well as consistency with £100 growing into an impressive £911 over 10 years.

The second best performer over ten years was Scottish Oriental Smaller Companies where £100 grew to £684, and the third best performer was Baring Emerging Europe where £100 over the last decade grew to £609. The best share price performances over ten years did not necessarily correlate with the most consistent year on year performance.

‘We looked at consistency of performance across the industry to see if there are any important lessons as past performance tables are usually dominated by one or two sectors. In many cases looking at consistency, that is discrete performance each year, gives a different result from just looking at past performance. At times of market uncertainty like now, it’s interesting to look at discrete performance to see how companies have performed through different market conditions,’ said Annabel Brodie-Smith, AIC communications director.

‘Traditional past performance is clearly an important criteria when considering an investment but looking at discrete performance gives you a better understanding of a potential investment. Of course there’s no guarantee that good and consistent past performance will continue into the future but it’s worth doing your research thoroughly before making an investment. It’s also important to consider a range of criteria such as the objective of the company, its investment risk, its major holdings, discount and charges before you decide to invest,’ she added.

Evy Hambro, manager of BlackRock World Mining said it was a great honour for to be recognised as one of the most consistent performing investment trusts.