The Strong Performance Of Venture Capital Trusts and Biotech Trusts In 2014


Investment trusts including Venture Capital Trusts and other emerging market vehicles performed extraordinarily well in 2014. VCT dominated the industry, with six out of the top ten best trusts in the AIC universe falling into this segment. The three of the top ten performing non-Venture Capital Trusts are focused on India. They delivered an average return of 58.2% in the year. One of the non-VCT vehicles is completely focused on Vietnam. The major investment themes were biotechnology and healthcare in 2014.

The leaders

The best-performing investment trust in 2014 was India Capital Growth. It is an investment trust of Ocean Dial Asset Management. As per the data provided by FE Analytics, the trust provided a total return of 70.07%.

The biotechnology trust rewarded investors with strong returns. SV Life Sciences International delivered return of 48.16% in the last year. It was followed by Biotech Growth Trust of Frostrow Capital with a return of 44.87%.

Factors driving growth

The strong performance of trusts in the biotech segment was led by impressive earnings growth among the top companies as they launched new products in the year. The positive results from clinical research and continued M&A activities added to overall performance.

The strong performance of individual trusts helped IT biotechnology and healthcare sector to deliver a return of 39.34%. It was the best performing sector in 2014. The second rank was secured by the ‘IT Country Specialists Asia Pacific’ segment with a return of 35.8%.

Strength from Indian markets

India performance was boosted by the win of Narendra Modi. The sentiment turned positive, and it was placed better to challenge China. PM Modi started with reforms that encouraged the country to deliver on its potential. The MSCI India Index delivered return of 31.58% in 2014 compared with 6.23% and 14.68% return on MSCI AC Asia Pacific Index and the MSCI China index respectively.


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