What the top investment trusts of the past 20 years can teach us
“The BlackRock World Mining trust has given investors the roughest ride of all”
“Financial history books are littered with names that haven’t stood the test of time”
In the last 20 years, the FTSE 100 index has risen by about a third. But if dividends, based on an average yield of 3.5% per annum, are included, the total return is between 2.6 and 2.8 times. This has been enough to keep ahead of inflation, but little more. Some investment trusts have done far better.
As Ian Cowie of Interactive Investor has pointed out, no fewer than 42 trusts have multiplied investors’ money ten or more times over. They are what Fidelity’s former investment guru, Peter Lynch, called “ten-baggers”. What clues do these 42 provide for identifying the ten-baggers of the next 20 years?
Firstly, it took stubborn patience to hold these trusts throughout those 20 years. At the start, stockmarkets were halfway through the bear market that followed the technology bubble at the end
