The European Smaller Companies sector was the top performing investment trust sector in the first half of 2025, data from the Association of Investment Companies (AIC) has revealed.

The sector produced a return of 24 per cent in the six months to the end of June 2025, with the average investment trust returning 7 per cent during the same period.

The Property – UK Commercial sector generated the second highest return of 18 per cent, followed by the Europe sector with a return of 17 per cent.

Rounding off the top five were the China/Greater China sector and the UK All Companies sector with returns of 15 per cent and 13 per cent respectively.

Commenting on the findings, AIC communications director, Annabel Brodie-Smith, noted that while US President, Donald Trump’s, tariffs had created market turmoil, investment trusts had continued to perform well in the first half of 2025.

“It’s been a strong six months for Europe as investors have reallocated away from the US into the European investment trust sectors,” she continued.

“Investment trusts investing in the UK, China and Japan have also been beneficiaries of this tilt away from the US.

“The UK commercial property sector has bounced back this year due to interest rates starting to come down, strong rental growth and an increase in M&A activity. The private equity and structured finance sectors have also delivered strong returns.

“It’s useful to look at this year’s short-term winners, but it’s important to remember that investment is all about the long term. Investors need to build a well-balanced portfolio of investments which meets their needs over time.”

Looking at the best performing investment trusts, DP Aircraft 1 from the Leasing sector came out on top with a return of 108 per cent in H1, followed by Gresham House Energy Storage from the Renewable Energy Infrastructure sector with 71 per cent.

Gold Prospect Precious Metals from the Commodities & Natural Resources sector was the third best performer with a return of 64 per cent, followed by Seraphim Space Investment Trust from the Growth Capital sector (57 per cent) and Warehouse REIT from the Property – UK Logistics sector (46 per cent).

---