The Private Equity sector is the top-performing sector this year, data from the Association of Investment Companies (AIC) has revealed. The sector produced a return of 43% over the 11 months to the end of November 2023, whereas the average investment company returned 3% over the same period.
The Technology & Technology Innovation sector achieved the second highest return of 37%, while the North America sector came third with a return of 14%. The fourth best-performing sector was Europe which returned 12% and the India/Indian Subcontinent sector came fifth returning 10%.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “It’s been a challenging year for investment companies, with high inflation and rising interest rates, unhelpful cost disclosure regulation and war breaking out in the Middle East and continuing in Ukraine. However, many investment companies have performed well over the first 11 months of the year and this accelerated in November with better-than-expected inflation figures bringing an early Santa rally.
“Private Equity, the best-performing sector has come back strongly this year, with 3i the top-performing investment trust of the year. Many other trusts in the Private Equity sector are performing well this year but are currently trading on wide double-digit discounts. The Technology & Technology Innovation sector has also bounced back, with the rise of artificial intelligence driving the performance of the ‘Magnificent Seven’ technology stocks in the US.
“This year’s top-performing sectors reflect the market and economic conditions in 2023. It’s important to remember that investment is about the long term. Rather than focusing on today’s winners, it’s important to build a balanced portfolio of investments which suits your needs.”
Ten best-performing sectors in the year to date
| AIC sector | Share price total return % | ||||
| YTD* | 1 year | 3 years | 5 years | 10 years | |
| Average investment company | 3.36 | 2.43 | 16.04 | 88.81 | 153.61 |
| Private Equity | 43.39 | 44.38 | 89.52 | 145.21 | 455.55 |
| Technology & Technology Innovation | 37.48 | 28.34 | 9.05 | N/A | N/A |
| North America | 13.62 | 10.28 | 21.11 | 134.45 | 202.40 |
| Europe | 12.27 | 10.39 | 16.61 | 50.07 | 134.33 |
| India/Indian Subcontinent | 10.40 | 7.88 | 44.25 | 38.67 | 184.94 |
| Property – UK Logistics | 8.21 | 5.25 | 0.46 | 37.30 | N/A |
| Debt – Structured Finance | 7.76 | 8.29 | 24.24 | 18.38 | N/A |
| Debt – Loans & Bonds | 7.67 | 8.82 | 14.42 | 11.67 | 19.91 |
| UK All Companies | 4.94 | 3.22 | 2.89 | 23.11 | 70.95 |
| Leasing | 3.63 | 6.86 | 110.26 | -11.13 | 57.96 |
Source: theaic.co.uk / Morningstar. N/A means there is no performance history for this period. Ordinary share classes only. Excludes VCTs. * Year to date = 11 months to 30 November 2023
Ten best-performing investment companies in the year to date
| Company | AIC sector | Share price total return % | ||||
| YTD* | 1 year | 3 years | 5 years | 10 years | ||
| Average investment company | 3.36 | 2.43 | 16.04 | 88.81 | 153.61 | |
| 3i Group | Private Equity | 70.98 | 73.10 | 134.22 | 224.52 | 791.79 |
| Manchester & London | Global | 56.43 | 44.26 | -13.21 | 39.42 | 152.17 |
| JPMorgan Emerging Europe, Middle East & Africa | Global Emerging Markets | 54.55 | 62.10 | -75.40 | -67.77 | -59.94 |
| Doric Nimrod Air Two | Leasing | 44.43 | 48.35 | 171.40 | 38.42 | 81.27 |
| Polar Capital Technology | Technology & Technology Innovation | 38.92 | 27.80 | 11.92 | 100.59 | 405.06 |
| Princess Private Equity | Private Equity | 34.40 | 25.76 | 7.55 | 36.15 | 193.45 |
| Allianz Technology Trust | Technology & Technology Innovation | 34.29 | 30.25 | 1.81 | 112.03 | 445.45 |
| Nippon Active Value | Japanese Smaller Companies | 33.66 | 28.73 | 55.36 | N/A | N/A |
| DP Aircraft I | Leasing | 30.56 | 46.87 | 17.50 | -93.56 | -89.93 |
| Amedeo Air Four Plus | Leasing | 29.67 | 32.30 | 82.49 | -34.15 | N/A |
Source: theaic.co.uk / Morningstar. N/A means there is no performance history for this period. Ordinary share classes only. Excludes VCTs and companies undergoing liquidation. Year to date = 11 months to 30 November 2023
In the 11 months to 30 November, 3i Group from the Private Equity sector was the best-performing investment company up 71%, and second came Manchester & London from the Global sector up 56%. They are followed by JPMorgan Emerging Europe, Middle East & Africa from the Global Emerging Markets sector up 55%, and Doric Nimrod Air Two from the Leasing sector up 44% over the same period. The Leasing sector has three companies in the list of ten top-performing companies, whilst the Private Equity sector and the Technology & Technology Innovation sector both have two companies featuring in the top ten performers.
