It is perhaps no surprise that an industry that has been around for more than 150 years is going to have to battle to remain relevant. Investment trusts were under siege last year and a year on there are few signs of the troubles ending. Demand from retail investors is in retreat. Passive funds, which have become hugely popular in recent years, have raised the competitive temperature, while fixed income is offering yields that offer a credible alternative for income-seekers.
Hollands says: “Let’s not forget that so much attention has been focused on US equities, in a market dominated by big tech, in recent years — yet there are actually relatively few US equity-focused investment trusts.” Analysts also speak of the “lost years” when European regulation that affected how investment trust charges are reported made them appear more expensive. This led some investors to sell and deterred others from investing.