Investment company sector assets rise above £90bn

Latest statistics from the Association of Investment Companies (AIC) have seen the investment company sector’s assets rise above £90bn for the first time ever in March 2007, closing the month with assets of £92bn compared to £87bn the month before.
Even so, whilst the continued rise of most markets over the last 12 months has been punctuated by some sharp corrections, the latest investment company statistics from the AIC highlight that over the long-term, time rather than market timing has rewarded investors handsomely. So whilst a £1,000 investment in the average investment company has grown to £2,518 over the last 10 years, investors who invested £1,000 just 5 years earlier would have found their investment had more than doubled to £5,111 over 15 years.

Financials outperform

The average investment company was up 4% over the year to 31 March, more modest growth compared to the last 3 years, with the average investment company up 77%. The Sector Specialist: Financials sector was once again the top performing investment company sector over the year, up 30%, and the second top performing sector over 3 years, up 183%.

The European investment company sectors also continued to perform very strongly. The European Smaller Companies sector is the second top performing sector, up 19% over a year and this sector is dominating the performance tables over most time frames, being the top performer over 3, 5 and 10 years, up 184%, 221% and 295% respectively. The Country Specialists: Europe was the third top performing sector over the year up 18%. Meanwhile, the Private Equity sector continues to deliver impressive long-term returns and is the second top performing sector over 10 years, up 263% and amongst the top performing sectors over 5 years, up 130%.

UK Focussed Investment Companies

The UK sectors fared well over the year, with UK Smaller Companies the 5th top performing sector, up 15%. Whilst not topping the performance tables, the UK Growth and UK Growth & Income sectors also performed well over the year, up 14% and 10% respectively, illustrating the relatively benign market conditions seen in the UK. In fact, the UK Growth sector has outperformed the FTSE All Share over 1, 3, 5 and 10 years, whilst the UK Growth & Income sector has outperformed the FTSE All Share over 3, 5 and 10 years.

Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: “What a difference a month can make, with the sector growing by £5bn and breaking through the £90 billion barrier for the first time. Whilst it’s interesting to see that the specialist sectors dominate the performance tables over one year, over ten years the traditional sectors are amongst the top performers. These statistics clearly illustrate the unpredictability of markets and the importance of having a balanced portfolio.”