Ian Cowie: the winners and losers in my ‘forever fund’ in Q3 2025

Despite all the bad news in almost every TV bulletin, the third quarter (Q3) of this year was a good one for investment trust shareholders, with most of us making money.

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Across more than 300 funds in the Association of Investment Companies (AIC), independent statisticians at Morningstar say the average return on £1,000 between the start of July and end of September was £1,050.

That might not sound like much but, if it was sustained over 12 months, 2025 would be another outstanding year. Never mind the generalities, your humble correspondent saw two of my investment trust shares rise by 20% or more during Q3, with another not far behind. No fewer than 14 of the 20 funds in which I have an interest delivered positive returns during this period.

However, because I know that some of you enjoy my pratfalls more than my profits, let’s start with the losers. Perhaps surprisingly, the worst of them was Seraphim Space Investment Trust Ord (LSE:SSIT), which turned £1,000 into £827 in three months. Oh, well, I always did say it might go up like a rocket and come down like a stick.

SSIT’s underlying portfolio of largely unlisted companies, aiming for capital growth from extraterrestrial activities, was always likely to be volatile. So it proved in Q3, but I’m not bothered having paid 53p in March for shares that traded at 72p on Thursday. I haven’t sold any SSIT shares and intend to hang on for the ride.

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Sad to say, both of my other worst performers in the last quarter are focused on the same country. India Capital Growth Ord (LSE:IGC) and JPMorgan Indian Ord (LSE:JII) ended the period with £928 and £937, respectively.

Tariffs or taxes of 50% imposed by US President Donald Trump on Indian exports since August have hit the world’s largest democracy hard. Trump aims to punish India for buying Russian oil and liquefied natural gas (LNG), which he quite rightly points out is helping fund the invasion of Ukraine.

I have no idea what will happen next in the short term, but this long-term investor hasn’t sold any IGC or JIGI shares recently, nor do I intend to. As I may have mentioned before, JIGI was my very first 10-bagger, after I paid 63p in June 1996, for shares that traded at £10.10 this week. Better still, I look forward to receiving dividends from its new policy of paying out 4% of net asset value (NAV).

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Turning to the Q3 winners, Edinburgh Worldwide Ord (LSE:EWI) turned £1,000 into £1,171, with its global portfolio of smaller companies - some of which are very large indeed, albeit not listed on any stock market. Elon Musk’s Space Exploration Technologies, or SpaceX, is the highest-profile example of that type of business and comprises more than 12% of EWI’s £830 million assets.

If that sounds like too much of a moonshot investment, bear in mind that SpaceX now has 8,475 satellites in orbit and its Starlink subsidiary has brought internet access and mobile telephony to many parts of the world that had neither. It might be the most exciting business on earth. I am delighted to have some exposure via this investment trust.

Canadian General Investments Ord (TSE:CGI) ranked second by ending the quarter with £1,200. That’s a spectacular return from this conservative fund, with assets of Canadian $1.8 billion (£958 million), which dates back to the beginning of the Great Depression in 1930.

Volatility - but this time in a nice way - is the explanation, once again. These shares had been under a cloud but the third quarter saw Mr Market rediscover the appeal of underlying holdings, including the technology giant NVIDIA Corp (NASDAQ:NVDA), which makes the microchips or graphics processing units (GPUs) needed to power artificial intelligence (AI). Elsewhere, CGI’s diversified portfolio also includes the railway Canadian Pacific Kansas City Ltd (TSE:CP) and the gold royalties company Franco-Nevada Corp (TSE:FNV).

Best of all in the third quarter, Polar Capital Technology Ord (LSE:PCT), ended the period with an eye-stretching £1,204. Despite all the ongoing worries about valuations, not to mention nightmarish memories of the tech bubble that burst 25 years ago, this £5.6 billion global giant fund continues to ride the AI boom.

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Its biggest holding is Nvidia, while the software giant Microsoft Corp (NASDAQ:MSFT) and the iPhone-maker Apple Inc (NASDAQ:AAPL) also feature in PCT’s top 10. Reassuringly, the fund’s lead manager, Ben Rogoff, has been at the helm since 2006 and matches enthusiasm with experience.

Nick Britton, research director of the AIC, told me: “It was a storming quarter and the technology sector, which has been riding high on ongoing optimism about AI, was up 20%.

“Closer to home, a Bank of England rate cut to 4% in August was not quite enough to reignite enthusiasm for UK assets given stubborn inflation. UK equities delivered low single-digit returns, while commercial property and renewables were down 2% and 8% respectively.”

That serves as a salutary reminder for investors not to get carried away. But, for the time being, this bull market continues to climb a wall of fear.

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

Ian Cowie is a shareholder in Apple (AAPL), Canadian General Investments (CGI), Edinburgh Worldwide (EWI), India Capital Growth (IGC), JPMorgan Indian (JIGI), Microsoft (MSFT), Polar Capital Technology (PCT) and Seraphim Space Investments (SSIT) as part of a globally diversified portfolio of investment trusts and other shares.