- UK investment trusts performed well under Major, Cameron and in Blair’s first term
- Current parliament has been second-worst for UK-focused trusts
The Association of Investment Companies (AIC) has released data on the performance of UK-focused investment trusts in each parliament since 1987.
Investment trusts investing in UK equities performed best of all under John Major’s government between 1992 and 1997, with an annualised return of 15.5%. This was very closely followed by the Conservative / Liberal Democrat coalition of 2010 to 2015 when David Cameron was Prime Minister, which saw returns of 15.4% for the average UK trust.
The third best parliament for UK investment trusts was the first term of Tony Blair, which ran from 1997 to 2001 and saw investment trusts deliver annualised returns of 12.2%.
While no UK parliament saw a negative return for investment trusts, the worst annualised returns were experienced in Tony Blair’s second term from 2001 to 2005 (0.4%). The current parliament has been the second worst for UK investment trusts, with returns of 2.8% so far.
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Clearly politics is only one of a number of influences on the UK stock market, and our research shows that UK investment trusts can thrive under governments of different political leanings.
“Performance of the average UK investment trust has varied from over 15% a year under John Major’s government in the 1990s to just 0.4% in Tony Blair’s second parliamentary term. The current parliament, which has coincided with the global pandemic, higher inflation and interest rates, and wars in Ukraine and the Middle East, has so far been the second-worst for UK investment trusts since 1987, though there is still time for this to change before the next election.”
