Achieving decent returns has been difficult in 2022 as shareholders in many investment trusts have found to their cost. According to data from the Association of Investment Companies, the average one-year share price total return from all trusts (excluding venture capital trusts) is -13.7%.

However, several trusts have really stood out from their sector peers this year. In this article we highlight notable outperformers in some of the most high-profile trust groupings.

GLOBAL

It has been hard going for trusts which look to invest with a worldwide remit. The average share price total return for the sector of -27.3% in 2022 reflects a weak performance for popular trusts like Scottish Mortgage (SMT) which has suffered this year from exposure to out of favour growth companies in the technology sector.

In this context F&C Investment Trust’s (FCIT) ability to generate a positive return (2.1%), the only global trust to do so, is testament to its diversification. Being invested in some strong areas has compensated for weakness elsewhere.

Providing exposure to many individual managers F&C Investment Trust aims to be a one-stop shop for investors, with holdings in stocks like Microsoft (MSFT:NASDAQ) and pharmaceutical giant Merck (MRK:NYSE) alongside unquoted securities and private equity. The trust, the first of its kind when it launched in 1868, trades at a 2.1% discount to net asset value and has a 0.54% ongoing charge.

GLOBAL EQUITY INCOME

Generous dividends have become more prized in a rising interest rate environment, and this is reflected in a decent showing for income-focused global trusts.

Murray International (MYI) has performed far better than its peer group with a 20.5% total return over the past 12 months.

Prior to 2022 it suffered for its lack of exposure to big US technology stocks but that has turned from a weakness to a strength as this part of the market has endured a heavy sell-off.

Numis recently commented on the trust: ‘We believe Murray International remains an attractive option for more defensively minded investors looking for yield, particularly given the uncertain macro backdrop.’

Steered by Bruce Stout since 2004, its largest holding is Mexican airport operator Grupo Aeroportuario del Sureste (ASURB:BMV) but it also holds more familiar names like consumer goods firm Unilever (ULVR) and US tobacco group Philip Morris International (PMI:NYSE). Murray’s shares trade on a 0.6% premium to net asset value and offer a yield of 4.2%. The ongoing charge is 0.57%.

NORTH AMERICA

After years of delivering strong returns to investors, US shares have been sunk this year by a strong dollar and the US Federal Reserve’s aggressive rate hikes aimed at tackling inflation.

Investment trusts with an income focus have bucked a negative average 12-month total return for the sector of -12.8%. Particularly impressive is the double-digit positive total return (14.2%) from North American Income (NAIT), which also has a decent track record on a longer-term view.

It has a concentrated portfolio and stocks tend to be held for the long term although managers Francis Radano and Ralph Bassett will trim and top up positions in response to short-term shifts in valuation.

While there is an emphasis on finding undervalued stocks, there is also a focus on quality to avoid value traps. Top holdings include broadcaster Comcast (CMCSA:NASDAQ) and energy services firm Baker Hughes (BHI:NYSE).

Trading at a 7.5% discount to net asset value, the fund pays a quarterly dividend and offers a yield of 3.25%. Ongoing charges total 0.88%.

UK ALL COMPANIES

Despite the FTSE 100 outperforming many counterparts in developed countries this year, by trading roughly flat, only two trusts in the UK All Companies sector have avoided double-digit losses.

Both are value-orientated, making them better suited to the market backdrop. While both trust’s showings will ultimately have still been a disappointment to investors, they held up materially better than their peer group.

Whereas some names like Baillie Gifford UK Growth (BGUK) delivered a near-30% loss over the past 12 months, Fidelity Special Values (FSV) saw a mere 4.2% decline.

Numis comments: ‘Alex Wright’s track record since taking over as Fidelity Special Values’ portfolio manager in September 2012 remains exceptional with net asset value total returns of 189% versus 89.5% for the FTSE All Share.

‘We rate the manager highly and admire his investment approach which has a strong contrarian flavour, looking for unloved stocks where the downside is limited and there is a catalyst for change.

‘However, investors should therefore not be surprised to see periods when performance is distinctly different from the index.’

Names in the portfolio include support services outfit Serco (SRP), Barclays (BARC) and tobacco stock Imperial Brands (IMB).

Also performing much better on a relative basis than the peer group was Aurora (ARR). Its investment process involves maintaining a laser focus on cash flow and how this relates to a company’s valuation.

The trust also does a lot of work to get under the bonnet of the companies it invests in. ‘We spend a lot of time understanding the nuts and bolts of how businesses make their money. We walk the aisles of supermarkets to understand UK food retail, visit hundreds of building sites to understand housebuilders and attend obscure German conferences about steel production to understand more about engineering.’

Companies currently in the portfolio include retailer Frasers (FRAS), Barrett Developments (BDEV), Netflix (NFLX:NASDAQ) and EasyJet (EZJ). The shares are roughly in line with net asset value and the ongoing charge is 0.49%.

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