Private Equity investment trusts have outperformed all other investment trust sectors since Donald Trump made his ‘Liberation Day’ tariff announcements, according to data compiled by the AIC.
The AIC ‘Private Equity’ sector has returned 11.1% since 2nd April, more than double the second-best performing sector – the ‘Japanese Smaller Companies’ sector, which has returned 5.5%.
Unsurprisingly, Trump’s ongoing trade spat with China has resulted in the AIC’s ‘China / Greater China’ sector performing the worst since Liberation Day, with the sector losing 9.8%.
The ‘North America’ sector has declined 6.2%, while the UK’s resilience is demonstrated in a 1.3% gain for the ‘UK Equity Income’ sector.
Investment trust experts at the AIC attribute the strong performance of private equity and infrastructure trusts to investor positioning in sectors that are set to benefit from lower interest rates as central banks set about tackling the economic impact of Trump’s trade policies.
“President Trump’s announcements on 2 April and his subsequent flip-flopping sent stock markets into a spin, but four weeks later some winners and losers are emerging,” said Nick Britton, Research Director of the Association of Investment Companies (AIC).
“Winners include interest rate sensitive sectors, such as property and infrastructure, which would benefit from rates coming down faster than expected to soothe a troubled economy. UK equities have also done relatively well, as the UK is perceived as being less affected by the tariffs, and Japanese equities have also been resilient. Meanwhile, the stock markets of the trade war’s major players – the US and China – have both suffered.
“The differing fortunes of investment trust sectors since Liberation Day underlines the importance of having a diversified portfolio. Investors would be well advised to stay calm, stick to their plans and take a long-term view while the tariff war rages on.”
Performance of AIC sectors since Liberation Day (2 April)
| AIC sector | Share price total return (%) | |||
| Since 2 April | Year to date | Last 5 years | Last 10 years | |
| Average investment trust | 1.8 | 0.2 | 74.1 | 157.3 |
| Private Equity | 11.1 | 11.8 | 341.3 | 595.1 |
| Japanese Smaller Companies | 5.5 | 4.8 | 13.4 | 44.3 |
| Hedge Funds | 4.9 | -0.9 | 50.1 | 82.5 |
| Property – UK Commercial | 3.7 | 10.1 | 17.5 | 32.5 |
| Renewable Energy Infrastructure | 3.3 | -1.8 | -5.7 | 54.6 |
| UK All Companies | 2.9 | 1.4 | 63.6 | 94.9 |
| Property – UK Logistics | 2.8 | 14.2 | 50.3 | n/a |
| Property – UK Residential | 2.2 | 7.6 | 32.3 | n/a |
| Infrastructure | 2.0 | 0.7 | 11.5 | 68.3 |
| Japan | 1.6 | 1.1 | 38.0 | 93.9 |
| Property – Europe | 1.5 | 0.1 | -11.8 | n/a |
| UK Equity Income | 1.3 | 4.2 | 73.7 | 79.8 |
| European Smaller Companies | 0.9 | 7.8 | 84.3 | 137.7 |
| India/Indian Subcontinent | 0.9 | -8.0 | 132.7 | 108.4 |
| Europe | 0.7 | 9.2 | 62.7 | 116.3 |
| UK Smaller Companies | 0.4 | -7.3 | 41.1 | 73.0 |
| Commodities & Natural Resources | -0.8 | -2.1 | 137.9 | 60.1 |
| Debt – Direct Lending | -0.8 | 0.2 | 41.2 | n/a |
| Debt – Loans & Bonds | -1.1 | 0.2 | 62.6 | 50.8 |
| Global Smaller Companies | -1.1 | -10.3 | 24.8 | 101.5 |
| Property – Debt | -1.2 | -0.9 | 34.5 | 30.1 |
| Biotechnology & Healthcare | -1.2 | -10.9 | -17.6 | 31.7 |
| Flexible Investment | -1.4 | -0.4 | 36.9 | 63.8 |
| Growth Capital | -1.6 | -10.7 | -25.8 | n/a |
| Technology & Technology Innovation | -1.7 | -16.5 | 75.0 | n/a |
| Global Equity Income | -1.9 | -3.6 | 72.5 | 125.4 |
| Global Emerging Markets | -2.3 | -1.0 | 38.3 | 69.0 |
| Asia Pacific Smaller Companies | -2.5 | -4.2 | 90.9 | 96.0 |
| Debt – Structured Finance | -2.6 | 3.6 | 109.0 | 85.9 |
| Global | -3.4 | -6.8 | 55.8 | 187.6 |
| Asia Pacific Equity Income | -4.2 | -5.0 | 41.4 | 70.6 |
| Asia Pacific | -4.6 | -7.5 | 47.8 | 103.7 |
| Leasing | -4.6 | 0.0 | 163.0 | n/a |
| North America | -6.2 | -10.8 | 119.4 | 206.9 |
| Country Specialist | -8.8 | -14.4 | 48.9 | 161.3 |
| China / Greater China | -9.8 | 6.3 | 5.7 | 54.2 |
Source: theaic.co.uk / Morningstar. All share price returns to market close on 25 April. Returns since 2 April are from London market close on 2 April to market close on 25 April. Excludes VCTs. “n/a” indicates performance history is shorter than stated period.