Investment trusts for the long-term

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In a year where nearly half of the world's population went to the polls¹, interest rates stayed higher than expected and geopolitical risks created periods of market volatility, 2024 was something of a bumpy ride. Nevertheless, most markets weathered the various challenges reasonably well and the average investment trust generated a share price total return of 13% over the year².

Looking ahead to 2025, much of this uncertainty is likely to persist, particularly as new governments, notably the US, begin to implement policies that are set to have far-reaching consequences beyond their domestic borders.

During unpredictable times, it is essential to tap into proven investment experience, backed by thorough research, and to not put all your eggs in one basket. A portfolio comprising a diverse range of assets can be a better way to manage risk while maximising the likelihood of consistent investment returns, although it does not remove the risk altogether.

Today’s global investment opportunities are becoming increasingly complex and accessing the full potential of these diverse markets can be daunting. However, investment trusts provide a structured way to build a portfolio which maximises your potential returns while helping to minimise the risk inherent in any investment.

An investment trust is a professionally managed, closed-ended, pooled investment vehicle that offers several valuable benefits to investors, including:

1. Closed-end Structure: Investment trusts have a closed-end structure. By fixing the number of shares issued, the investment trust’s portfolio manager has the freedom to execute buy and sell decisions when the timing is most advantageous, rather than being subject to the vagaries of when investors decide to invest or sell trust shares. (Investors should note that closed-end trusts may trade at a premium or discount to their net asset value, potentially resulting in investors buying assets at a price above their market value or selling shares at a price below the underlying assets’ true market value).
2. Stock Market Listing: Investment trust shares are listed on the London Stock Exchange, which allows investors to conveniently buy or sell shares, and easily find the current price of shares.
3. Ability to Borrow: Investment trusts can borrow to increase the amount of money invested (“gearing”), allowing them to quickly take advantage of emerging opportunities without having to sell existing holdings. Gearing can enhance returns during rising markets and exacerbate losses during declining markets.
4. Accountability: An independent board of directors, elected by shareholders, oversees the operation and management of investment trusts. The board also has oversight of a fund manager’s performance and the power to replace an underperforming manager. Shareholders have the right to vote on all substantive issues that impact the trust’s management.
5. Competitive Pricing: Investment trusts typically have lower operating costs than open-ended funds, which may result in greater wealth accumulation over the long term.
6. Steadier Income: An investment trust can retain up to 15% of its income each year, which can then be used to supplement income when needed in future years and help provide level income payments to investors³.
7. Accessibility: Investment trust shares can be bought and sold through most leading online investment platforms. These third-party platform providers will usually allow you to hold your shares in an Individual Savings Account (ISA), Junior ISA and Self-Administered Personal Pension (SIPP) - all of which bring potential tax advantages.

Why J.P. Morgan Asset Management

Successfully tapping global investment opportunities via investment trusts requires an experienced and trusted partner with a long-term track record of strong performance.

At J.P. Morgan Asset Management, our singular goal for more than 150 years has been to help our clients build stronger portfolios. Our global strength, local expertise and team-based approach means we can undertake the in-depth on-the-ground research which uncovers opportunities others may miss. By working with us, institutions, intermediaries, and individual investors have benefited from key advantages unique to J.P. Morgan Asset Management, including:

• Size and scale: Responsible for USD 3.5 trillion in assets globally⁴, J.P. Morgan Asset Management is supported by over 1,300 investment professionals with an annual research budget of USD 420 mm⁵, which is used for the expressed purpose of uncovering new investment opportunities and mitigating portfolio risks.
• Wide range of choices: Our investment trusts cover a broad range of global markets, and investment styles to meet investors’ varied investment objectives (whether this be income, growth or a combination of both) and risk profiles.
• Performance results: Past performance, of course, should never be used to predict current or future returns. However, we do have a proud record of delivering attractive investment results.
  • Our JPMorgan American Investment Trust plc won at the Citywire Investment Trust Awards 2024 as the only investment trust to generate a positive information ratio (demonstrating outperformance against its benchmark) over three years in the Best North America trust category. ⁶
  • JPMorgan Global Growth & Income plc raised £433 million in secondary fundraising in 2024⁷ – more than any other trust - reflecting its popularity amongst retail investors. It also won two awards across the year – at the Investment Week Investment Company of the Year Awards and QuotedData Investors’ Choice Awards⁸, both in the Global Income category.
  • JPMorgan Emerging Markets Investment Trust plc won at the AJ Bell Investment Awards 2024⁹ in the Emerging Markets Equity Active category.
  • Amongst investment trusts under Morningstar research coverage, JPMorgan American Investment Trust plc was the top performer in 2024 for the second year in a row¹⁰. Over the course of 2024, J.P. Morgan Asset Management won Best Investment Trust Group at the Online Money Awards¹¹, Group of the Year at the Investment Week Investment Company of the Year Awards⁸ as well as Best Large Asset Manager at the QuotedData Investors’ Choice Awards⁸.
  • The Mercantile Investment Trust plc celebrated its 140th anniversary, having launched on 8 December 1884. Earlier in the year, the trust was recognised as an AIC ‘next generation dividend hero’ reflecting its achievement of a decade of consecutive annual dividend increases¹².
• Commitment to investors: Securing the best outcome for shareholders is at the core of our business and over the past 12 months we have demonstrated this commitment through successfully completing three mergers. This has delivered a number of benefits to investors including increased liquidity and lower costs across the following Trusts: JPMorgan UK Small Cap Growth & Income plc, JPMorgan Global Growth & Income plc, JPMorgan Japanese Investment Trust plc .
• Deep-rooted culture: Sustained outperformance is a function of an enduring culture. Maintaining the continuity of the people and processes that created a record of historical achievement is foundational to future success.

Getting started

Long-term investors interested in building a portfolio of diversified, global assets from one of the UK’s leading investment trust providers, should contact their financial adviser.

• For more information about the full range of J.P. Morgan investment trusts, including investment objectives, risks, and fees, visit the Investment Trust homepage.

Past performance is not a reliable indicator of future results