Investment trust 2024 review

The discount of the average investment trust excluding 3i was 13.7% at the beginning of the year, widening to 15.2% by 12 December 2024.

It was a record year for share buybacks, with £6.95bn of shares repurchased in the first 11 months of 2024 according to the latest figures from Winterflood (using Morningstar data)³. This compares to buybacks of £3.9bn during 2023 – the previous record.

Industry assets were £271bn at the end of November, an increase of 4% from £260bn at the beginning of the year. Investment trusts paid out a total of £5.99bn in dividends in the first 11 months of 2024.

Fundraising by existing investment trusts (called secondary fundraising) totalled £804m, down from £1.1bn last year. There were no investment trust IPOs in 2024.

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “Discounts have remained wide this year, prompting boards to take action. We’ve seen a record number of mergers, record share buybacks and 32 investment trusts have cut their fees.

“So far this century, investment trusts have weathered the financial crisis, the dotcom boom and bust and a global pandemic. As we look forward to 2025, we will continue to see the investment trust industry innovate and adapt to meet investors’ needs.”

See below for more details on mergers, manager changes, liquidations, acquisitions and fee changes.

Performance in 2024

The average investment trust generated a share price total return of 14.8% in 2024 (to 6 December). The best performing sector was Growth Capital with a 48.4% return, followed by Private Equity (41.7%), Technology & Technology Innovation (33.3%), Leasing (30.5%), Debt – Structured Finance (21.6%), Global (19.5%), India / Indian Subcontinent (16.7%), North America (15.7%), Asia Pacific Equity Income (15.0%) and Debt – Loans & Bonds (13.8%).

Mergers in 2024

Ten mergers between investment trusts completed in 2024. Tritax Big Box REIT’s merger with UK Commercial Property REIT was the largest, creating a company with total assets of £6.1bn. This was followed by the merger of Alliance Trust and Witan Investment Trust, which completed in October bringing together total assets of £5.7bn. The combined company, Alliance Witan, will join the FTSE 100 index on 23 December.

An additional merger has been proposed between Asia Dragon and Invesco Asia to form Invesco Asia Dragon. If approved, it is expected to complete in the first quarter of 2025.

Source: theaic.co.uk

Manager changes in 2024

Two investment trusts changed their manager in 2024.

Source: theaic.co.uk. Management group changes which result from a restructure, merger or acquisition at the management group level are not included.

Liquidations in 2024

Five liquidations of investment trusts were completed in 2024. 

Source: theaic.co.uk

Acquisitions

Six investment trusts were acquired in 2024 (for mergers between investment trusts, see the table above).

Source: theaic.co.uk

Fee changes

During the year, 32 investment trusts changed their fees to benefit shareholders. The most common type of fee change was a reduction in a trust’s base fee (20 trusts) and the second most common was a reduction in a tiered fee (15 trusts). In addition, four trusts introduced tiered fees⁴.

Secondary fundraising and IPOs

Fundraising by existing investment trusts (called secondary fundraising) totalled £804m, down from £1.1bn last year as interest rates fell less than expected and the issue of cost disclosure affected investor sentiment. There were no new initial public offerings (IPOs) in 2024.

JPMorgan Global Growth & Income raised £417m in 2024, more than any other trust.

Source: theaic.co.uk. Amounts rounded to nearest million. All fundraising is secondary fundraising. Closed issues admitted to trading only. Excludes VCTs and shares reissued from treasury.

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Notes to editors

1. All data, except for total assets data, excludes venture capital trusts (VCTs). VCTs made up £6.3bn of investment companies’ £271bn of assets as at 30 November 2024.
2. Five mergers were also completed in 2020.
3. There were share buybacks of £6.95bn in 2024 (as at 30 November 2024). This is the greatest value of buybacks in a calendar year since Winterflood’s records began in 1996. In addition to the £6.95bn of share buybacks, there was an additional £2.0bn of shares repurchased through tender offers and redemptions making £8.95bn in total to 30 November 2024. Source: Winterflood/Morningstar.
4. The number of fee changes in 2024 is based on when fee changes became effective (not when they were announced). Trusts may make more than one type of change at the same time (e.g. abolishing a performance fee while introducing tiered fees).
5. The Association of Investment Companies (AIC) represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s vision is for investment companies to be understood and considered by every investor. The AIC has 313 members and the industry has total assets of approximately £271 billion.
6. For more information about the AIC and investment companies, visit the AIC’s website.
7. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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