In 2014 Morningstar wrote about the investment trust issue in the FTSE 250 noting that they accounted for 15% of holdings. Today, it’s up to 36% of holdings.
Is this by ticker count or value? Can imagine US based trusts alone have 5x since 2014.
By ticker count. Added a link to the Morningstar article, it referenced 43 investment trusts at the point. Agree on US focused trusts distorting it if otherwise. US outperformance is one reason I'm surprised that total returns of the FTSE 250 and FTSE 250 ex-inv trusts isn't that different. I don't have a detailed look-through on trust holdings but I think a lot of the bigger ones are global so you end up with a chunk of world beta vs just US beta.
Rooseveltian - love it. Is this an early dividend from moving to the US?
Great article. I’m a huge fan of investment trusts, especially now the charging transparency is close to a sensible resolution. However, I less wonder of their inclusion than have a straight up concern what such a volume in the 250 means for the health of the market and economy. It’s a stark reminder of over reliance on the City.
Haha, yes more US references coming. And I agree that’s it’s is a pretty sad sign for the health of the UK market. Clearly not helped by low UK valuations/performance as all else equal if these trusts hold ex UK stocks and ex UK performs better than UK, then the share of the trusts in the index will automatically grow. But then valuations and performance also reflect underlying economic health too. There were a few reports out last week on FTSE 250 so interested to read through and see what’s suggested - may write about it soon!
In 2014 Morningstar wrote about the investment trust issue in the FTSE 250 noting that they accounted for 15% of holdings. Today, it’s up to 36% of holdings.
Is this by ticker count or value? Can imagine US based trusts alone have 5x since 2014.
By ticker count. Added a link to the Morningstar article, it referenced 43 investment trusts at the point. Agree on US focused trusts distorting it if otherwise. US outperformance is one reason I'm surprised that total returns of the FTSE 250 and FTSE 250 ex-inv trusts isn't that different. I don't have a detailed look-through on trust holdings but I think a lot of the bigger ones are global so you end up with a chunk of world beta vs just US beta.
Rooseveltian - love it. Is this an early dividend from moving to the US?
Great article. I’m a huge fan of investment trusts, especially now the charging transparency is close to a sensible resolution. However, I less wonder of their inclusion than have a straight up concern what such a volume in the 250 means for the health of the market and economy. It’s a stark reminder of over reliance on the City.
Haha, yes more US references coming. And I agree that’s it’s is a pretty sad sign for the health of the UK market. Clearly not helped by low UK valuations/performance as all else equal if these trusts hold ex UK stocks and ex UK performs better than UK, then the share of the trusts in the index will automatically grow. But then valuations and performance also reflect underlying economic health too. There were a few reports out last week on FTSE 250 so interested to read through and see what’s suggested - may write about it soon!