In an interesting turn of events, after a couple of years ‘in the wilderness’, investments trusts seem to have come back into favour as an asset class this year according to data from the AIC (Association of Investment Companies).

In the six months to the end of June, the average trust returned 8% compared with 5.6% for the FTSE 100 large-cap index and 4% for the FTSE mid-cap index.

‘After two challenging years, investment trust performance has bounced back strongly in the first half of 2024. Many headwinds remain including uncertainty over prominent elections, continuing conflicts and damaging cost disclosure regulation but cooling inflation, the prospect of interest rate cuts and resilient growth are helping many investment trusts deliver strong performance’, commented the AIC’s communications director Annabel Brodie-Smith.

TECH ON TOP

In terms of sectors, unsurprisingly given the enthusiasm for everything to do with AI (artificial intelligence), Technology and Technology Innovation was the best-performing AIC sector with a return of over 28% in the first half.

The second-highest return came from Growth Capital, at 22%, while Private Equity took the final spot on the podium with a 21% gain.

‘The Technology & Technology Innovation sector has continued to perform strongly with the dramatic rise of artificial intelligence driving the performance of the Magnificent Seven in the US’, added Brodie-Smith.

‘The Growth Capital sector, which invests in unquoted companies, has come back strongly this year, with Seraphim Space’s (SSIT) stratospheric performance making it the top performing trust. And the Private Equity sector, which was the best-performing sector last year, has continued to do well in 2024.’

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