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Emerging market investment trusts lead the way at the start of 2016

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Investors in emerging markets enjoyed the healthiest investment returns in the first three months of 2016, with the Emerging Europe and Global Emerging Markets sectors topping the performance rankings in net asset value (NAV) terms, according to Winterflood Investment Trusts.

Despite a rocky start to the year in terms of stockmarket returns, in total 17 sectors delivered positive in the first quarter of 2016 with Emerging Europe leading the way with an NAV return of 13.7%. Global Emerging Markets ranked second with a return of 9.1%, while the North American Income sector placed third with a 6.4% sector average return.

The Emerging Europe sector also topped the charts in share price terms over the same time period (up 11.9%), while with a gain of 8.5% the Commodity sector ranked second, pushing Global Emerging Markets back into third place with a share price gain of 7.5%

However given the volatility in markets, Winterflood noted there was a huge variation in NAV performance in the first quarter, with 13 sub-sectors delivering negative returns over the time period. Falling 13.1%, the sector sitting at the bottom of the pile was Biotech & Healthcare, followed by Asset Backed Debt (-5.0%) and UK Small Cap (-3.9%). The Biotech & Healthcare sector also registered the worst share price performance in the first quarter, falling 14.6%.

While emerging markets and commodity trusts lead the sector performance rankings, on an individual basis, the investment trust which topped the share price return table over the time period was the Duet Real Estate Finance trust, which clocked a total return of 50%. With a market cap of only £9.4m, the trust is a feeder fund that is invested solely in the European Real Estate Debt fund, which essentially invests in the debt of European commercial property.

Meanwhile topping the NAV rankings over the same time period was the commodity related Golden Prospect Precious Metals trust, which returned 47.8%.