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

Summary

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.

Implications

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.”

Links

https://www.theaic.co.uk/aic/news/press-releases/average-investment-company-outperforms-the-ftse-msci-world-and-average-open

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