Ian Cowie: my investment trust winners and losers in 2025

Bad news in almost every TV bulletin might make even the most optimistic investor fear the worst for stock markets in 2026. But many “experts” were equally gloomy at the start of 2025 before share prices surprised on the upside.

For example, the average investment trust turned £1,000 into £1,103 over the year to date, the week before Christmas. That’s pretty good going when only £1,038 would have been needed to keep pace with inflation, as measured by the Retail Prices Index (RPI) in the year to November, as published on Wednesday (17 December).

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Less happily, with scant sign of any Santa rally so far, the average investment trust shrunk the same starting capital into just £982 over the last quarter - or three-month period - according to independent statisticians Morningstar.

Never mind the generalities, your humble correspondent is very happy with the performance of the investment trusts in my “forever fund” over the last year and the last quarter. To be specific, no fewer than 13 of the 20 closed-end funds in which I have invested part of my life savings beat the annual average mentioned above; and 17 of them did better than the average over the last quarter.

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The laggards

But it certainly wasn’t all sweetness and light, with wide variations in returns demonstrating - once again - the importance of diversification to diminish our exposure to the risk of capital destruction. Speaking of which, step forward Greencoat UK Wind (LSE:UKW), which suffered a perfect storm in 2025 to become my worst investment trust over the last year and last quarter.

This renewable energy infrastructure specialist shrank £1,000 on 1 January into just £838 over the year to date and £896 over the last three months. Ouch!

Gale-force headwinds that battered this £4.1 billion fund included rising costs, falling electricity prices and idiotic windfall taxes imposed by the Conservatives and maintained by Labour. There are even rising fears, fanned by folk who hate wind farms, that these turbines might not last as long as originally hoped in the very hostile environment of the North Sea.

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Next worst over the year was JPMorgan US Smaller Companies Ord (LSE:JUSC), where my hopes that the longstanding outperformance of the mega-cap or very big technology shares might trickle down to corporate tiddlers. On the contrary, JUSC turned £1,000 into £852 over the year.

Another smaller companies specialist, India Capital Growth Ord (LSE:IGC), was my third-worst investment trust in 2025. It failed to live up to its name and turned the same £1,000 starting capital into £896 by the week before Christmas.

The winners

But I don’t intend to sell any of the above, partly because of what happened at the other end of the performance spectrum this year. Polar Capital Technology Ord (LSE:PCT), a self-descriptive fund in which I have been a shareholder for more than a decade, continued to benefit from the artificial intelligence (AI) boom, boosting £1,000 on January 1 into £1,324 as I write.

More surprisingly, long-standing stinker Schroders Capital Global Innov Trust Ord (LSE:INOV) did even better, finishing the year with £1,364 on the same basis, as it bounced back to some extent after a decade of capital destruction. To be fair, only the kindest-hearted shareholders in INOV are likely to restore its former “star fund manager” Neil Woodford to their Christmas card lists on the basis of its very partial recent recovery.

More importantly for me, Ecofin Global Utilities & Infra Ord (LSE:EGL), which is my most valuable investment trust and the fifth-biggest among 55 shareholdings in the forever fund, turned the same starting capital into £1,424. EGL’s diversified portfolio of electricity distributors and generators - including nuclear power - benefited from rising demand by AI data centres, among others.

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But best of all - and perhaps most surprising of all - BlackRock Latin American Ord (LSE:BRLA) turned £1,000 into an eye-stretching £1,529 during 2025. As discussed here in more detail last week, BRLA has bounced back after years of shrinking returns, as a collateral beneficiary of the trade war between America and China. The latter is buying more of the hard and soft commodities it needs from Brazil and less from the US.

Whether that is likely to continue remains uncertain, with the probabilities changing almost daily, alongside erratic pronouncements from the White House. While the mood swings of US President Donald Trump remain unpredictable, the last year showed investment trust shareholders how previously disappointing shares can still surprise on the upside.

None of us knows what will happen next year but 2025 demonstrated how our worst fears are rarely realised. Short-term stock market shocks need not prevent long-term shareholders from realising capital growth and income from a diversified portfolio of investment trusts.

Ian Cowie is a freelance contributor and not a direct employee of interactive investor.

Ian Cowie is a shareholder in BlackRock Latin American (BRLA), Ecofin Global Utilities and Infrastructure (EGL), Greencoat UK Wind (UKW), India Capital Growth (IGC), JPMorgan US Smaller Companies (JUSC), Polar Capital Technology (PCT) and Schroders Capital Global Innovation (INOV) as part of a globally diversified portfolio of investment trusts and other shares.