After two tough years, investment trust performance bounced back in the first half of 2024, with those focused on technology the best-performing sector.
The average investment trust produced a return of 8% over the first six months of the year, data from the Association of Investment Companies (AIC) showed, while the tech sector returned 28% over the same period.
Second, with a 22% return in the period, was the growth capital sector, which includes three of the five best performing trusts in the period, including Seraphim Space Investment Trust PLC (LSE:SSIT), in first place with a 58.7% share price total return.
The Schiehallion Fund (LSE:MNTN) and Molten Ventures PLC (LSE:GROW) were the fourth and fifth best performers, with share price total returns of 32.4% and 31.8% respectively in the period.
The private equity sector was third with a return of 21%, helped by a 28% share price total return from 3i Group PLC (LSE:III).
Among individual trusts, Manchester & London Investment Trust plc (LSE:MNL) delivered the second best return, of 45.3%, followed by Baker Steel Resources Trust Ltd (LSE:BSRT), with a 34.2% return.
The best placed technology trust was Allianz Technology Trust PLC (LSE:ATT), where investors saw a 30.6% total return.
AIC director Annabel Brodie-Smith said: “After two challenging years, investment trust performance has bounced back strongly in the first half of 2024.
"Many headwinds remain including uncertainty over prominent elections, continuing conflicts and damaging cost disclosure regulation but cooling inflation, the prospect of interest rate cuts and resilient growth are helping many investment trusts deliver strong performance."
She noted that the technology sector continued to perform strongly thanks to trusts investing in stocks like Nvidia and gaining from the dramatic rise of artificial intelligence.
The growth capital, which invests in unquoted companies, rebounded from a low position, with shares in Seraphim Space having fallen over 70% in the previous two years.
"And the Private Equity sector, which was the best performing sector last year, has continued to do well in 2024," said Brodie-Smith.
"It’s interesting to look at the 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."