Top 10 most-popular investment trusts: May 2025

Investors are increasingly focused on potential opportunities in the renewable energy infrastructure sector, with two new entrants in May in our list of the top 10 most-bought investment trusts.

NextEnergy Solar Fund (LSE:NESF) and SDCL Efficiency Income Trust (LSE:SEIT) entered in seventh and eighth place, joining peer Greencoat UK Wind (LSE:UKW) in second.

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Rising interest rates from rock-bottom levels of 0.25% at the end of December 2021 to a peak of 5.25% in the summer of 2023, hit investment trusts aiming to generate an income for alternative assets. This is because investors could procure a decent level of income from lower-risk areas as bond yields rose in response to interest rate rises.

When interest rates reached 5.25%, investors could pocket an income of around that amount through money market funds. While renewable energy infrastructure investment trusts offered higher yields, many investors took the view that the extra income on offer was not sufficiently rewarding enough to take on extra levels of risk.

As investors retreated from the sector, the average trust moved from an average 7.2% premium at the end of 2021 to a current average discount of -29.5% to net asset value (NAV).

However, now that interest rates are declining, and currently at 4.25% with further falls expected in the coming months, some investors think the gap between low-risk bonds and the yields on offer from renewable energy trusts is now large enough. The sector average yield is 9.7%.

The two new entrants are the highest-yielding investment trusts in the sector. NextEnergy Solar Fund has a yield of around 13%. It invests in solar energy infrastructure assets, while also holding complementary technologies, such as energy storage. A couple of weeks ago, the trust’s board said that it will maintain its dividend target of 8.43 pence per ordinary share for the financial year ending 31 March 2026 (31 March 2025: 8.43 pence).” Its current share price is 65.8p.

SDCL Energy Efficiency Income is yielding over 14%. It invests in energy efficiency infrastructure projects delivering cheaper and cleaner solutions that are less reliant on the grid or subsidies. At the end of March, the trust’s board said that it is on track to deliver its dividend target of 6.32 per share. Its current share price is 44.1p.

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This brings the number of trusts from the sector in the table up to three, with Greencoat UK Wind regularly featuring in our monthly top 10 over the past couple of years. In May, it climbed two places to second. As the name suggests, it invests in UK wind farms and aims to provide investors with a yearly dividend that increases in line with RPI inflation. It has successfully achieved this each year since launch in 2013. Its dividend yield is 9.2%.

As the table below shows, the trio have all made losses over three years, with SDCL Energy Efficiency Income the worst performer, down -54.4%. Over one year, NextEnergy Solar Fund has made a small gain of 0.6%, but SDCL Energy Efficiency Income and Greencoat UK Wind have made sizeable losses, of -28.8% and -12.1% respectively.

Investors increasing exposure to the sector will be hoping that lower interest rates are the catalyst for a turnaround in fortunes, which, all things being equal, should reduce discounts and by extension boost share prices.

JPMorgan European Growth & Income (LSE:JEGI), the third new entry in May, last appeared in the top 10 in March. Europe offers low starting valuations, which may prove attractive to those looking to switch some of their investments out of the US market. This trust is the top performer in its six-member sector over the past five-year and one-year periods. Its yield is 4% and its annualised five-year dividend growth is 17%.

Europe has been unloved as an investment destination for many years among UK retail investors, with sentiment not helped by the ongoing conflict in Ukraine. A lack of world-leading technology shares may also have proved a headwind in recent years.

While European markets are home to sectors that some investors may find less exciting, such as finance, industrials and healthcare, this hasn’t led to dull returns. In fact, over both three and five years, the average European fund (Investment Association Europe Excluding UK sector) has outperformed the average UK equity fund (Investment Association All Companies sector) returning 29.9% and 61.4% versus 19.0% and 50.6%.

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Moreover, over those time periods European economic growth has been sluggish. However, those returns serve as a reminder that stock market and economic performance are not one of the same. This is particularly the case with Europe in general, given that it is home to many world-leading companies that make a lot of their money globally. European fund managers tap into this trend, with the likes of Nestle (XETRA:NESM), ASML Holding (EURONEXT:ASML), Roche (SIX:ROG), Novo Nordisk (NYSE:NVO) and L'Oreal (EURONEXT:OR) widely held.

Looking at the other seven investment trusts that kept their places in the table, growth-focused Scottish Mortgage (LSE:SMT) remained in pole position, with UK dividend-focused City of London (LSE:CTY) in third. In fourth place is global “best ideas” strategy JPMorgan Global Growth & Income (LSE:JGGI), while in fifth is another global approach that adopts a multi-manager strategy – F&C Investment Trust (LSE:FCIT). Lower down the table in 10th place is Alliance Witan (LSE:ALW), which is also a multi-manager approach, where stock picking is outsourced to a range of fund managers.

Elsewhere, in sixth place, is private equity trust 3i Group (LSE:III). It has been a strong performer over one, three and five years. However, for new investors, it’s important to bear in mind that it trades on a very high premium of 59.6% to NAV.

Technology duo Polar Capital Technology (LSE:PCT) and Allianz Technology Trust (LSE:ATT) departed the top 10 in May, alongside high-yielding trust Henderson Far East Income (LSE:HFEL).

Top 10 most-popular investment trusts in May 2025

Performance data sourced from FE Analytics. Performance data to 30 May 2025. Note: the top 10 is based on the number of “buys” during the month of May. Past performance is not a guide to future performance.