Top investment trusts for 2025

As the end of the tax year approaches, savvy investors will be wondering what the best investment trusts to add to their ISAs ahead of the deadline might be.

Investment trusts are an effective way of investing in stocks and funds as well as less liquid assets like infrastructure projects or venture capital-funded companies.

These actively-managed funds operate as listed companies in their own right; their shares are traded on a stock exchange, and only a certain number of shares is issued at their inception.

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That means that investment trusts can trade at a discount to the net asset value of their holdings – though this goes hand-in-hand with their ability to hold less liquid assets. They also offer various other benefits over mutual funds and other forms of investments.

“The investment trust sector tends to attract the best managers; the structure gives managers plenty of flexibility to generate alpha, while the closed-ended nature means the management contracts are highly prized by fund groups,” says Thomas McMahon, head of investment companies research at Kepler Partners.

What does the research say are the top investment trusts for investors to consider, ahead of the ISA deadline? And which investment trusts have been the top performers so far in 2025?

Which are the top investment trusts for 2025?

Kepler Trust Intelligence, a digital publication covering investment companies from Kepler Partners, published its list of the top investment trusts for 2025 back in January.

Kepler’s research – based on a proprietary, quantitative rating system – highlights the top investment trusts that, according to its model, demonstrate attractive and consistent performance characteristics over the long-term. This could offer some inspiration for your stocks and shares ISA.

The ratings consider performance over a five-year period, giving a detailed analysis that takes into account risk, the area of investment, fund objectives, and performance against a benchmark.

Kepler groups the top investment trusts into three categories: growth rated funds, income rated funds, and alternative income rated funds. The latter of these looks at relevant sectors for trusts that have managed to deliver a flat or stable net asset value (NAV) along with dividend growth over the past five years.

“Our ratings reward the outstanding performers in three key categories and are designed to recognise those managers who have done particularly well to generate outperformance and mitigate the market risk during a highly volatile period over the past five years,” said McMahon.

The top growth investment trusts

Kepler’s list of the top growth rated funds consists of:

^{Source: Morningstar, Kepler calculations via Kepler Trust Intelligence; NB Pershing Square does not report portfolio data}

AVI Japan Opportunity (LON:AJOT) and Vietnam Enterprise Investments (LON:VEIL) are new additions to this list.

CQS Natural Resources (LON:CYN) and the European Smaller Companies Trust (LON:ESCT) are among seven investment trusts at the centre of a takeover attempt by New York hedge fund Saba Capital.

Kepler drew attention to the performance of Fidelity China Special Situations (LON:FCSS), which hit the criteria for inclusion in the list despite challenging conditions in China, where its investments are focused.

“FCSS has done very well at limiting its exposure to the Chinese market’s downside and capturing the upside, and this has contributed to positive five-year performance while the Chinese market is down,” wrote McMahon.

The top income investment trusts

The trusts that Kepler assigned an income rating to were:

^{Source: Morningstar, Kepler calculations via Kepler Trust Intelligence}

“It is notable to see Aberforth Smaller Companies (LON:ASL) win a rating this year,” said McMahon. “ASL is one of the few unabashedly ‘value’ equity strategies left in the investment trust sector, and has performed extremely well post-pandemic.”

The top alternative income investment trusts

Finally, Kepler assigned the following trusts an alternative income rating:

^{Source: Morningstar via Kepler Trust Intelligence}

“For the first time, the number of Alternative Income rated funds has fallen,” said McMahon. He attributed the fall (from 14 last year to nine this year) to the impact of an interest rate shock on the valuations of unlisted portfolios, financing costs and net cash yields.

“On the other hand, stalwarts and early movers Greencoat UK Wind (UKW), Renewables Infrastructure Group (TRIG) and BBGI Global Infrastructure (BBGI) have navigated through the turmoil to retain their ratings in 2025,” said McMahon.

Which are the top-performing investment trusts so far in 2025?

Kepler’s list was published at the start of the year. With the first quarter of 2025 having nearly played out, have any of its picks been among the top-performing investment trusts of 2025 so far?

According to data from the Association of Investment Companies (AIC), the following are the 20 top-performing investment trusts based on share price total return from 1 January to 27 March 2025:

^{Source: AIC. *indicates upcoming or ongoing corporate action}

Fidelity’s China Special Situations trust is the top performer out of the investment trusts that Kepler first picked out. JPMorgan European Growth & Income and BBGI Global Infrastructure also sneak into the top 20 (though it is worth noting that BBGI Global Infrastructure has received a £1 billion cash offer from British Columbia Investment Management Corporation to acquire the investment trust).

On the whole, though, there is little overlap between Kepler’s list and 2025’s top performers so far.

That underscores the challenges that investors face in predicting future top performers in the short term. While the markets were expecting the new Trump administration to be turbulent, few might have predicted the scale of the big tech selloff, or the impact that has had on the S&P 500.

As such, the strong performance of China- and Europe-focused investment trusts so far this year will have caught many investors off-guard.

While investors are generally well-advised to take a long-term approach to investing, this counts double for investment trusts. Their benefits are that they can offer exposure to asset types that often take years or decades to see a return, so investors shouldn’t be unduly concerned by their performance (or discounts) over the short term.