Investment trusts close 2023 with 4.6% performance boost
Although the sector closed the year in positive territory, investment trust performance was 'well behind' US and global equity market indices.
According to Numis, the investment trust universe saw its valuation rise by 10.4% during 2023, largely due to the success of 3i Group, although this figure falls to 4.6% once the largest trust is excluded.
Although the sector closed the year in positive territory, Numis analysts Ewan Lovett-Turner and Andrew Rees noted investment trust performance was «well behind» US and global equity market indices.
Interest rate expectations to shape the path for private markets in 2024
Investment trusts enjoyed an early ‘Santa rally' from October 2023, they stated, following drops in inflation and growing signals the rate hiking cycle has likely peaked.
This was reflected across UK and emerging markets, which produced negative returns in the first ten months of 2023 but achieved positive returns for 2023 as a whole.
Lovett-Turner and Rees noted that technology trusts led the way in 2023 thanks to the stellar performance of the ‘magnificent seven' mega-cap tech stocks, with Manchester & London, Polar Capital Technology and Allianz Technology among the top investment trusts.
European equity trusts enjoyed a strong recovery in 2023, following a difficult year after Russia's invasion of Ukraine in 2022, with Novo Nordisk driving the trusts' performance in the sector, such as for European Opportunities.
Overall, however, the analysts noted prices lagged net asset value across most regions over the year, reflecting widening discounts.
A strong rally in Indian equities after a difficult start of the year benefited investment trusts in the sector, which gained from flows away from China, with India
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