Over the last ten years the global economy has experienced new and intensifying wars, three bear markets, the most aggressive rate-hiking cycle since the early 1980s, a global pandemic, and the UK has left the European Union. It has been a particularly challenging decade for fund managers to pick winning stocks. Now managers are dealing with the impact of Trump’s tariffs in an increasingly uncertain world.
And yet despite this many investment trusts have performed exceptionally well, proving that investors who have patience and a long-term perspective are often handsomely rewarded.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said:
“There have been many times in the past decade when the most optimistic investors’ nerves have been tested. Currently, Trump’s tariffs are taking a toll on markets. However, investors who hold steady and don’t react to short-term movements are usually rewarded over the long term. All investors need a balanced portfolio which meets their investment needs over time.
“Private equity is the decade’s top sector, with seven investment trusts featuring in the top 25 best performers. There are two technology trusts with a ten-year record – Allianz Technology Trust and Polar Capital Technology – and both are very near the top of the performance table.
“For those looking for diversification across countries and companies, there’s lots of choice, from the Global sector to smaller companies and commodities.”
The tables below show the AIC sectors and investment trusts which have performed best over the past ten years.
Best performing investment trust sectors over ten years
| AIC sector | Share price total return, 1 year (%) | Share price total return, 5 years (%) | Share price total return, 10 years (%) |
| Private Equity | 23.3 | 285.4 | 534.1 |
| North America | -3.7 | 149.1 | 221.3 |
| Global | 4.1 | 74.8 | 202.8 |
| Country Specialist | -4.5 | 78.6 | 185.7 |
| European Smaller Companies | 6.5 | 109.1 | 138.8 |
| Global Equity Income | 3.0 | 86.2 | 129.7 |
| Asia Pacific | 2.7 | 60.7 | 118.1 |
| Europe | -2.1 | 72.7 | 115.7 |
| Global Smaller Companies | -1.8 | 39.9 | 114.2 |
| Asia Pacific Smaller Companies | 9.3 | 114.0 | 105.7 |
Source: AIC/Morningstar (returns to 31/03/25)
Best performing investment trusts over ten years
| Investment trust | AIC sector | Share price total return (%) | ||
| 1 year | 5 years | 10 years | ||
| 3i Group | Private Equity | 31.21 | 433.80 | 958.34 |
| HgCapital Trust | Private Equity | 9.86 | 147.73 | 475.84 |
| Allianz Technology Trust | Technology & Technology Innovation | 0.86 | 106.42 | 472.71 |
| Polar Capital Technology | Technology & Technology Innovation | -4.17 | 83.59 | 395.26 |
| Rockwood Strategic | UK Smaller Companies | 20.76 | 242.17 | 369.38 |
| JPMorgan American | North America | 0.32 | 165.89 | 286.66 |
| Scottish Mortgage Investment Trust | Global | 6.02 | 68.12 | 275.77 |
| Patria Private Equity | Private Equity | 7.53 | 159.40 | 252.65 |
| JPMorgan Global Growth & Income | Global Equity Income | -2.74 | 117.64 | 230.72 |
| CT Private Equity Trust | Private Equity | 10.84 | 109.96 | 229.31 |
| Manchester & London | Global | -7.74 | 27.62 | 228.60 |
| Oakley Capital Investments | Private Equity | 1.16 | 161.74 | 227.04 |
| VinaCapital Vietnam Opportunity Fund | Country Specialist | -5.83 | 81.66 | 216.86 |
| Montanaro European Smaller Companies | European Smaller Companies | 5.10 | 74.59 | 215.53 |
| VietNam Holding | Country Specialist | -3.46 | 198.77 | 212.84 |
| Pacific Horizon Investment Trust | Asia Pacific | 2.03 | 101.35 | 198.43 |
| NB Private Equity Partners | Private Equity | -1.60 | 176.35 | 195.28 |
| The European Smaller Companies Trust | European Smaller Companies | 9.99 | 166.66 | 192.15 |
| Brunner Investment Trust | Global | -0.21 | 102.40 | 190.36 |
| CQS Natural Resources Growth & Income | Commodities & Natural Resources | 12.97 | 328.37 | 187.78 |
| F&C Investment Trust | Global | 10.05 | 104.60 | 187.33 |
| BlackRock World Mining Trust | Commodities & Natural Resources | -4.07 | 130.68 | 186.97 |
| ICG Enterprise Trust | Private Equity | 8.77 | 119.74 | 183.08 |
| Alliance Witan | Global | -3.64 | 100.94 | 182.04 |
| Herald Investment Trust | Global Smaller Companies | -7.71 | 77.45 | 179.66 |
Source: AIC/Morningstar (returns to 31/03/25)
The AIC spoke to the managers of some of the best performing investment trusts over the past decade. Their comments are collated below.
What has been the driving force behind your portfolio?
Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “What is certain is that technology is most often the ‘edge’ and that means a consistency of demand for products, services and ongoing innovation. This keeps the sector so alive, along with an ecosystem of incomprehensibly talented inventors, scientists, engineers and entrepreneurs who work tirelessly towards the next generation of technology.
“AI continues to dominate headlines, there is no doubt that this is an amazing technology with the potential to have a huge impact on society. However, we are in frontier territory and ultimate long-term winners in the AI race may not yet even exist.”
Olivia Markham, Co-Manager of BlackRock World Mining Trust, said: “We believe our performance is partly explained by reflation of the global economy. Since the end of 2020, inflation has remained well above pre-pandemic levels, and the performance of commodities and related equities is typically positively correlated with inflation expectations. A lot of the outperformance was generated through 2022 when inflation was particularly acute and broader equity markets came under significant pressure.”
Felise Agranoff, Co-Manager of JPMorgan American, said: “US earnings have driven the US equity market returns over the last five years. Our strategy, which encompasses both value and growth, has always been focused on finding quality businesses with strong fundamentals that can weather short-term volatility and thrive in the long term.”
George Cooke, Head of Investments at Montanaro Asset Management, manager of Montanaro European Smaller Companies Trust, said: “We also have a rigorous investment process focused on finding attractive but under researched companies, what we call hidden gems. We look for the highest quality, market leading smaller companies operating in growth markets in which to invest for the long term. The last five years have been a tricky time for quality growth investing, but good stock picking has added value and allowed us to deliver strong absolute and relative returns.”
Luke Finch, Partner at Hg, manager of HgCapital Trust,said: “Hg’s investment strategy focuses on mission-critical B2B software and service businesses with recurring revenue models, which have demonstrated resilient growth even during challenging economic periods. Our portfolio continues to benefit from the long-term trend of digital transformation, which gained extra momentum during the pandemic. As more businesses continue to adopt cloud solutions, SaaS models, and digital workflow tools, many of our portfolio companies are well-positioned to meet this demand.”
What’s the outlook for your trust?
George Cooke, Head of Investments at Montanaro Asset Management, manager of Montanaro European Smaller Companies Trust, said: “European smaller companies have been deeply out of favour for the last few years. As a result, European smaller companies now sit on the largest P/E discount to the market on record – wider even than during the financial crisis of 2008 or the Eurozone crisis that followed. Now Europe is entering a period of significant fiscal expansion and investment as it seeks to reduce dependency on the US and elsewhere. Investors are responding; this year has seen the fastest rotation out of the American stock market in favour of Europe in 25 years.
“In our view, European smaller companies have a very attractive backdrop and we believe the trust is well positioned to benefit as we identify high quality growth opportunities in which to invest.”
Felise Agranoff, Co-Manager of JPMorgan American, said: “US equities will remain an essential part of portfolios, given the size, breadth, and growth potential of the US stock market. However, recent volatility underscores that active stock selection is even more important as the macro landscape evolves. In this climate, it’s about identifying companies that offer both value and growth potential, ensuring that portfolios can stand strong regardless of broader economic fluctuations.
“That said, we remain vigilant regarding potential risks that could induce volatility. These include ongoing geopolitical tensions and shifts in US trade, regulatory and fiscal policies.”
Luke Finch, Partner at Hg, manager of HgCapital Trust, said: “HgCapital Trustprovides shareholders with exposure to a portfolio of more than 50 leading B2B software and services companies. These companies provide services that customers rely on to run their businesses on a day-to-day basis, regardless of who is in the White House or Number 10.
“The more significant trend for us is AI, where there’s huge opportunity. We’ve already helped lots of our portfolio companies create successful AI-powered products and services.”
Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “The momentum from key growth trends such as AI and digitalisation, coupled with a more favourable regulatory environment and a boost in merger and acquisition activity, should support the technology sector in the year ahead.
“Looking even further ahead, exciting developments in areas such as quantum computing, augmented reality, artificial general intelligence and space exploration are on the horizon. However, this needs to be tempered with the risks around geopolitics and supply chains and highlights the need for disciplined risk management.”
Olivia Markham, Co-Manager of BlackRock World Mining Trust, said: “Near-term, we expect performance to be sensitive to the China stimulus situation, which is evolving, and we are watching closely to see if it translates into a pickup in demand. Longer-term, we expect mined commodity demand growth to be driven by increased global infrastructure, particularly related to the low carbon transition and increased power demand. Recent announcements like Germany’s EUR500bn infrastructure package provide a very solid demand footing for when China starts to show signs of improvement.
“Meanwhile, the supply side of the equation is constrained as mining companies have opted to pay down debt and return capital to shareholders rather than investing in production growth. The resulting limited supply, in addition to geopolitical tensions, are likely to benefit the mining sector.”
What investments have done well and why?
Felise Agranoff, Co-Manager of JP Morgan American, said: “Much has been written about the narrowness of the US equity market in recent years, with only two sectors outperforming the S&P 500 since the pandemic. Given the advancements in AI, it should be no surprise that one of those sectors has been tech. What may surprise many is that the energy sector was the other notable performer over the period.
“As stock pickers, we want to own the highest conviction names driven by bottom-up research rather than making macro or sector calls. While tech and energy sectors have outperformed the S&P 500 over the past five years, we have been able to add value in 10 out of the 11 S&P 500 sectors.”
Luke Finch, Partner at Hg, manager of HgCapital Trust, said: “HgCapital Trust’s largest portfolio company, Visma, a leading provider of mission-critical cloud software in Europe and Latin America, continues to perform well and to create significant value for shareholders. When we took Visma private in 2006 it had a valuation of around $400m and was purely focused on the Nordics.
“We have since supported the company’s growth to become the largest privately owned software business in Europe with a presence in more than 30 countries. We recapitalised Visma in 2023 at a valuation of over $19 billion, expanding its shareholder base and setting the business up for further international growth.”
George Cooke, Head of Investments at Montanaro Asset Management, which manages Montanaro European Smaller Companies Trust, said: “We have a history of backing winners in niche areas that fly under the radar of many other investors. Software companies such as Fortnox, which provides cloud-based accounting software in Sweden, and Atoss Software, which focuses on workforce management software in Germany, Austria and Switzerland, have been notable contributors.
“However, what truly distinguishes our performance is its breadth: success has come from companies across diverse industries ranging from electronics to luxury goods. The common thread is their high-quality characteristics, outstanding management and compelling structural growth prospects.”
Mike Seidenberg, Portfolio Manager of Allianz Technology Trust, said: “Palantir Technologies provided the largest relative contribution to the portfolio over the last year. We liked the company’s leadership position in big data and in the field of data analytics. Shares rallied on the continued momentum for AI-related applications as well as news that it would be added to the S&P 500 index. This should increase liquidity in the stock and we continue to hold it, with the shift in IT spending towards AI showing few signs of weakness. Our focus is to extract value for shareholders from a wider, more balanced and diversified selection of companies than simply the mega-caps.”
Olivia Markham, Co-Manager of BlackRock World Mining Trust, said: “The gold price has performed very strongly over the past three years. Central banks and Asian consumers have been investing in gold, which has helped the support price. It has performed well in spite of real interest rates rising and the US dollar strengthening. Inflation, high government debt and geopolitical uncertainty appear to have increased gold’s appeal as a safe haven asset. With the gold price now above $3,000, we are excited about the potential for earnings growth for mining companies from here.”
