Best Investment Trusts for 2025

Hargreaves Lansdown have highlighted five investment trusts to their clients for 2025 which they believe should be held for five years. We give our view on each of them in this guide to the best investment trusts of 2025.

A unique part of the UK investment landscape is the presence of Investment Trusts (IT). ITs are funds that invest in other companies. Investment Trusts (IT) are funds that pool capital to invest. Sponsoring and managing these ITs are big fund management companies such as Fidelity, JP Morgan, Aberdeen etc.

Many ITs are closed-ended. This mean that the number of shares of an IT remains static for a period of time. For most ITs, you can readily trade their shares during a business day. But the bid-ask spread will probably vary depending on the size and liquidity of a trust.

For example, you subscribed to an IPO of an investment trust. Three years later you wish to sell. Most likely you will be selling the shares to other buyers at the prevailing market price and not back to the trust. The original capital stays with the trust.

The first thing to find out about an Investment Trust is: What does it do?

One of the largest ITs in the UK, the Scottish Mortgage Trust (SMT), states this investment objective in its factsheet: “Scottish Mortgage is an actively managed, low cost investment trust, investing in a high conviction, global portfolio of companies with the aim of maximising its total return to its shareholders over the long term.”

In other words, SMT invests in global securities and is unconstrained by geographical limits. Because it invested in US FAANGS stocks, it has in the past outperformed FTSE by a wide margin.

Other trusts may have a more narrow focus, such as capitalisation-, sector-, or country-based. For example, the Fidelity China Special Situations (FCSS) invests solely in chinese-related securities while City of London (CTY) focuses on UK stocks.

Make sure you understand what the trust is trying to do – and its suitability to your own investment goals.

Smithson Investment Trust

The Smithson investment trust focuses on innovative small and mid size companies from developed markets across North America and Europe. Indeed just under 50.0% of the fund is invested in US Small and Midcap equities, which can be more innovative and faster moving, than their large or mega cap peers.

As we noted when discussing Hargreaves Lansdown’s fund choices, US Small and Midcap stocks are expected to do well under Donald Trump and his America first agenda.

It’s quite opportunistic then that Smithson trades at more than a -10.0% discount to NAV, though that is below the 12 month average discount of -11.54%.

However, that is what you would expect to see with interest in small and midcap stocks picking up. And with the trust’s share price ralling by +9.0% over the last six months that looks to be the case.

Smihson’s investment remit is to provide shareholders with long term capital appreciation, so it’s not dividend payer and therefore not one for income investors.

The portfolio includes US tech names such as internet security firm Fortinet inc, and high-end European consumer discretionary brands like Moncler and Geberit.

If you are looking for diversification away from large cap equities, but still want exposure to the world’s leading equity markets then Smithson could be for you.

JPMorgan Emerging Markets Investment Trust

This investment trust invests in both large and small cap stocks from emerging markets around the globe. Emerging market investing is not without its risk, liquidity, volatility, macroeconomics, and geo politics are just some of the issues that confront any would-be investors.

A collective scheme such as this aims to dial down those risks somewhat, through diversification, the experience of the management team, and the convenience of a London listed vehicle that’s priced in sterling.

The JP Morgan Emerging Markets Investment Trust has been around since 1991 and has £1.40 billion of assets, but a market cap of just £1.19 billion.

Which puts it on a discount of -13.79% which is below the 12 month average discount of -11.81%.

The trust’s portfolio contains stocks such as Taiwan Semi, Tencent, Infosys, Samsung and Tata Consultancy. The Technology and Financial Services sectors account for 58.0% of the fund, and at a country level China, India, Taiwan and Brazil make up some 70.0% of the trust’s exposure.

The trust is up by +5.50% over one year, and +9.30% over five years.

The ideal scenario for the JPMorgan Emerging Markets Investment Trust would likely be a resurgence in the Chinese economy and a period of US dollar weakness. That doesn’t look to be on the cards immediately, however, the trust’s stock price could get a boost if Mr Trump’s talk of trade tariffs of 100.0% and more, is dialed back when he takes up office.

Personal Assets Trust

If you read the bio and the fact sheet for Personal Assets Trust it may sound familiar and that’s because it’s managed by the same people behind the Troy Trojan Fund, which featured in the Hargreaves Lansdown five funds for 2025 selection.

Indeed PAT, as it’s often referred to, makes use of the same four pillar approach to investment as the Trojan fund, with exposure to large established companies, government and index linked bonds, gold and gold related investments and cash.

The trust’s objective is capital preservation, and the portfolio is designed to perform in an economic downturn. So it could appeal to defensive minded investors or those who think the bull market we have enjoyed post Covid, will inevitably come to an end, and want to position themselves accordingly.

PAT trades on a very modest discount to NAV of -0.98%, it yields 1.13% and its stock price has risen by +17.75% over the last 5-years.

Not one for raging bulls but worth considering if you think the equity market has run far enough.

Capital Gearing Trust

Another trust that has capital preservation on its mind Capital Gearing takes a similar approach to the managers at Troy/PAT. Though in this instance the trust uses three “buckets” which cover risk assets, index linked bonds and dry powder.

The Risk assets bucket contains equity investments. However rather than hold stocks directly, Capital Gearing Trust invests in other trusts and funds that have equity exposure themselves.

Which means that Capital Gearing Trust can access assets that trade at discount, specialist investments, and the skills of other management teams.

The dry powder bucket contains a mix of cash, T-bills and short-dated bonds. And it’s this bucket that’s meant to provide stability and a measure of capital preservation during periods of market volatility or economic uncertainty.

Capital Gearing Trust trades on a -1.71% discount to NAV, which is inside the 12 month average discount of -2.20%, its stock price has risen by almost +9.80% over the last 5-years.

The portfolio is well diversified at a holding and sector level, but it’s worth being aware that some 63.0% of the trust’s assets hail from the UK, US and Japan.

Another trust that’s worth considering if you are looking to add defensive capabilities and a measure of downside protection into your portfolio.

Greencoat UK Wind

A trust that’s aimed squarely at the energy transition and the push towards renewable sources of energy. Greencoat UK Wind investment trust invests in on and offshore wind farms that are income producing. The trust aims to pay investors a sustainable dividend (in every sense) that rise in line with the UK RPI index.

As such its a distribution model, where income overrides capital growth, so investors shouldn’t expect too much in the way of share price appreciation.

In the recent budget Chancellor Rachel Reeves effectively removed some of the last barriers to greater on-shore wind farm development, in the UK.

And it’s been estimated that if the UK is to meet its 2030 net zero targets, then its capacity for wind power production will need to double, or even triple from its current levels.

Greencoat trades at a -19.15% discount to its NAV that’s well below its 12 month average discount of 13.94%.

Investors should be aware that NAV values for the trust are only set on quarterly basis and that trusts underlying assets could be considered as highly illiquid. Nor is the trust’s performance measured against any formal index or benchmark.

Over the last 5-years the trust’s share price has lost more than -15.0% though it has rallied by +1.50% over the last month.

This is very much a specialist investment trust that invests in a complex market. So if you dont have a handle on the economics of wind power generation here in the UK then tread carefully. That said it looks like a good way to get direct exposure to the sector.