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Jubilee Celebrations

Platinum jubilee fund notes from AJ Bell and Hargreaves Lansdown


UK financial services firm AJ Bell has published a list of 36 investment trusts which are still going today and pre-date the Queen’s accession to the throne.


The firm notes that some investment trusts have had double platinum jubilees, but that the reign of investment trusts has been usurped by unit trusts


Laith Khalaf, head of investment analysis at AJ Bell, comments: “Seventy years and counting is a pretty good innings for a monarch, but for some investment trusts, it’s only half the time they have been in existence. The UK investment trust industry can chart its history back to 1868, when Queen Victoria sat on the throne, and Foreign and Colonial Investment trust was launched. The trust is still going strong today, having witnessed the reign of six British monarchs, though it’s investment focus is now global shares, rather than the overseas government bonds it held at launch.


“In total, 36 investment trusts have been around since before Queen Elizabeth II acceded to the throne, including well-known trusts like Scottish Mortgage (launched 1909), City of London (1888) and Bankers trust (1888), though names and investment mandates may have changed over the years. Many of the first investment trusts were created in Scotland to house the wealth created by the jute boom in the latter half of the nineteenth century, and a good number retain their Scottish heritage through their names and their management today.


“Despite its longevity, the investment trust industry’s primacy has been usurped by a relatively young pretender in the form of unit trusts. The first such fund was launched by M&G in 1931, and today open-ended funds account for around GBP1.5 trillion of investment, compared to around GBP270 billion from investment trusts. Of course, the closed-ended nature of investment trusts limits their size compared to their open-ended cousins. Consider that after 150 years, the F&C Investment Trust is one of the biggest in the market, with assets of GBP5.6 billion, while the open-ended Fundsmith Equity is worth GBP25.5 billion, a little over a decade since it was launched.


Meanwhile, over at Hargreaves Lansdown, Susan Streeter, Senior Investment and Markets Analyst, commented on the shocks which have ripped through the UK economy during the Queen’s 70 year reign.


1956 – The Suez canal crisis in 1956 led to an economic crisis and capital flight

1975 – Consumer price inflation reached 24 per cent during the oil crisis

1984 – Unemployment soared to 11.9 per cent amid miners’ strike

1987  – FTSE All Share drops 22 per cent on Black Monday

2001 – Dotcom bubble burst and markets fall by more than 50 per cent over 3 years

2008 – Financial crisis hits with housing market falling 15 per cent by February 2009

2016 – The vote for Brexit sees the pound fall sharply on currency markets

2000 – The pandemic sees record fall in output, with GDP falling 19.6 per cent

2022 – War in Ukraine unleashing commodity chaos and soaring inflation

June 2022 – drop in production expected as UK workers stop to celebrate Queen’s reign


‘The UK economy has shuddered with a series of shocks since Queen Elizabeth II was crowned in June 1953, following her accession in February 1952. There have been oil shocks, financial crises, market mayhem, war and a pandemic and at times inflation has soared much higher than today’s hot prices, with the economy setting off on multiple rollercoaster rides during her 70 year reign,” Streeter says. “The stock market has suffered in tandem with these shocks, but has regained form in the years which have followed.


“The invasion of Egypt by Britain, France and Israel following the nationalisation of the Suez canal just three years after the coronation sparked an economic crisis with intense speculative pressure on the pound leading to a flight of capital from the UK. Consumer price inflation reached the scorching levels of 24 per cent in July 1975, after an oil embargo was slapped on Western nations by the oil cartel OPEC, leading to a deep recession.  There was not much respite before the Iranian revolution sparked a fresh spike in energy prices, laying the chill ground for a winter of discontent amid soaring interest rates and mass walk outs with household spending plummeting by 4.2 per cent. Just a few years later the miners’ strike led to production plummeting and unemployment reaching record levels of 11.9 per cent in the second quarter of 1984.


“Investors have been taken on a wild ride with other falls clocked up sparked by infamous events such as the Black Monday crash in October 1987 which saw the FTSE 100 fall 23 per cent over two days. The bursting of the dot com bubble in 2000 led to a sharp downturn in the FTSE All share, falling by around 50 per cent over three years. But this volatility was then overshadowed by another deep rout after the global financial crisis hit the markets in September 2008 with the repercussions causing unemployment to soar to 8.4 per cent and house prices plummeting 15 per cent in a year. The shock of Brexit inflicted pain for the pound which fell to a 31 year low on currency markets as traders fretted about the impact of leaving the EU for the UK economy. Less than four years later investors had to buckle up to ride out the damage wreaked by the pandemic. Lockdowns between April and June in 2020 caused household spending to plunge by 20 per cent, the largest quarterly contraction on record, sparking the biggest ever decline in output, with GDP falling 19.8 per cent.”


Streeter comments that as preparations for the platinum jubilee events continue, volatility has again hit the financial markets as the commodity chaos unleashed by the devastating war in Ukraine sends inflation soaring once more. 


“Don’t be surprised if there is another knock to economic output in June’s GDP snapshot. All the planned celebrations over the jubilee extra-long weekend are expected to lead to a drop in productivity, as flag waving, parties and BBQs replace hours punching keyboards and on factory floors. The golden jubilee celebrations in 2002 saw production fall by 5.4 per cent and it dipped again in 2012 for the 60th celebrations. But that is likely to be a very small fall compared to the economic storms the Queen has witnessed time and time again over her reign.


“Rapid falls in the price of shares exacerbated by economic shocks can be unnerving for investors but tough times have been shown not to  last forever, and markets eventually recover. With inflation appearing to run rampant, and a recession looming right now, there are clearly tougher times ahead for companies and consumers but it’s important for investors to think back to their long-term strategy and stay resilient when markets are jittery. We don’t know exactly what is round the corner but by keeping calm and carrying on, instead of impulsively selling, might benefit you in the long run when prices eventually recover.‘’


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