If you’re thinking of topping up your stocks and shares ISA before the end of tax year deadline, you might want to consider buying an investment trust.
This ISA season presents a particularly challenging set of circumstances for anyone trying to decide where to invest.
As Myron Jobson, senior personal finance analyst at Interactive Investor observes, the current market “has been marked by volatility, fuelled in part by market jitters over President Donald Trump’s trade wars”.
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Jobson adds, though, that “investors should not be swayed by short-term turbulence. Investing is a long-term endeavour, and history shows that those who remain patient and stay the course tend to be rewarded. Time in the market is what truly counts.”
Investment trusts are worth considering in these circumstances. As closed-ended funds, they are one of the best-placed vehicles to access long-term and less liquid investments, including in large infrastructure projects or potentially even private companies via a venture capital trust.
The MoneyWeek portfolio of investment trusts currently holds Personal Assets (LON: PNL), Mid Wynd (LON: MWY), Scottish Mortgage (LON: SMT), Caledonia (LON: CLDN), Law Debenture (LON: LWDB) and AVI Global (LON: AGT).
Outside of this collection, though, which investment trusts are the experts recommending that investors add to their stocks and shares ISA ahead of the April deadline? Here’s what the experts say.
UK investment trusts
FTSE 100 stocks have made an encouraging start to the year, and UK investors may well want to explore their domestic market further.
Tom Bigley, fund analyst at Interactive Investor, picks out the City of London (LON:CTY) trust as a potential source of income, but it is focused mainly on the largest FTSE 100 stocks.
For a more nuanced take on the UK, especially for investors who think the country’s stocks are undervalued, Bigley highlights the Fidelity Special Values Investment Trust (LON:FSV).
The trust, he says, “seeks to find unjustly cheap companies that are due a change in fortunes”. Most of its holdings are UK-based, though it can invest up to 20% of net assets in non-UK listed stocks.
“Broadly, FSV seeks companies trading at lower multiples (generally a price/earnings ratio of well under 15x) where the market is yet to realise the future value. This bias leads Wright to also find a good deal of opportunities outside of the FTSE 100,” says Bigley.
Jonathan Moyes, manager of the Wealth Club Portfolio Service at Wealth Club, points out that £10,000 invested in Special Values at its inception would be worth £284,631 in February 2025, “more than three times the amount you would have had if you invested in the UK stock market”.
Asian investment trusts
There has been a rotation away from US stocks so far this year, and Asian companies could be set to benefit.
Abbas Barkhordar, manager of Schroder AsiaPacific Fund (LON:SDP), points out that in this environment, investors may want to diversify away from US megacaps, without abandoning a technological focus altogether.
“Entrepreneurial Asia”, says Barkhordar, is “an obvious part of the world to consider”. SDP provides exposure through 60 “high-quality but attractively valued Asian companies, with regional technology holdings playing a key role”.
Currently trading at an 11% discount to net asset value, SDP’s top holding as of 28 February is Taiwan Semiconductor – a supplier to stock market giant Nvidia. Alongside this the trust offers broad Asian technology exposure, including names like Samsung Electronics, Delta Electronics, Tencent, Alibaba and NetEase.
“An informed focus on technology is a hugely exciting prospect if you’re able to take the long view – and a foray into the Asian market could prove an attractive and well-priced diversifier from US exposure,” says Barkhordar.
Defensive investment trusts
Personal Assets, which is held in the MoneyWeek portfolio of investment trusts, is a trust picked out by Angell especially for cautious investors.
“This is a defensively managed multi-asset investment trust where the experienced manager, Sebastian Lyon, puts a high degree of emphasis on capital preservation,” says Paul Angell, head of investment research at AJ Bell. “The trust is long-only, with concentrated equity holdings and low turnover.”
The portfolio is currently invested approximately 55% into US and UK government bonds, with around 10% in gold bullion and 30% in equities. That offers a degree of security for investors looking to protect their money during the current turbulent period for markets.
Global investment trusts
For a global perspective, investors may want to consider JPMorgan Global Growth & Income (LON:JGGI).
“On a NAV total return basis, JPMorgan Global Growth & Income has outperformed the MSCI AC World Index in each calendar year from 2019 to 2024, representing the period under the current management team,” writes Emma Bird, head of investment trusts research at Winterflood.
“JPMorgan Global Growth & Income offers a large, liquid, low-cost vehicle, with an ongoing charges ratio of just 0.5%, the joint-lowest in the Global Equity Income peer group.”
