Winterflood analysts have made nine changes to their annual investment company recommendations, adding four new names and removing five as they maintain their preference for larger and more liquid London-listed funds.

Starting with the additions, the broker’s investment company analyst team, led by head of research Emma Bird (pictured above), switched from Temple Bar (TMPL) after the £1.2bn UK equity income trust outperformed last year with a 33.9% underlying portfolio return that saw the shares rally 45%.

You can read QuotedData’s latest report on Temple Bar to find out how Redwheel fund managers Nicholas Purves and Ian Lance have positioned the 4%-yielder. Since taking on the trust in October 2020, they have generated a 124% investment return to beat the UK stock market by a wide margin.

The trust started last year with its shares 6.6% below net asset value (NAV) but the continued strong performance saw it eradicate the discount with the shares currently standing on a small 1.4% premium over NAV, issuing new stock to meet investor demand.

In its place Winterflood analysts selected Lowland (LWI), the £361m UK equity income rival run by Janus Henderson’s James Henderson and Laura Foll. After a 36% one-year share price return, it stands on an 8.3% discount to NAV, only slightly narrower than the 11.7% valuation gap 12 months ago.

“Both funds saw strong NAV total returns over 2025, aided by their value bias, but the former saw a sharper re-rating. As such, we view Lowland as offering more attractive value,” said Bird.

The broker’s other significant change was in the Flexible Investments sector where they replaced Caledonia Investments (CLDN), the £2bn “multi-equity” fund backed by the Cayzer shipping family with the £3.9bn Rothshild-backed RIT Capital Partners (RCP).

Although RIT’s recently rally has seen its discount come in under 24%, narrower than Caledonia’s 32%, Winterflood analysts think there is more potential for a further re-rating under chief fund manager Maggie Fanari. Before the growth crash of 2022-23 raised concerns about its big private equity exposure, the shares traded much closer to NAV. By contrast, Caledonia has historically stood on wide discounts.

“We continue to view [Caledonia’s] outlook as favourable, but see greater upside at RIT Capital, which is trading at a larger discount to its long-term average rating and stands to gain from a Venture rebound. In addition, the recently refreshed management team is streamlining both the investment approach and the portfolio,” Bird said.

In Europe, the team added The European Smaller Companies Trust (ESCT), the £789m Janus Henderson trust that is a corporate client which has seen its discount widen to 11% since buying out activist Saba Capital last year.

In the Debt sector the analysts also added TwentyFour Income Fund (TFIF), the £950m 10% dividend yielder that, like its peers, has also moved to a small premium. Winterflood believed the rating was sustainable given the good supply and demand balance in the €600bn asset-backed securities market in which it invests.

In UK smaller companies they removed JPMorgan UK Small Cap Growth & Income (JUGI) but retained Odyssean (OIT) and mid-cap focused Mercantile (MRC), both of them corporate clients.

The analysts cut their five private equity recommendations to three. The first changes was to drop Pantheon International (PIN) in preference to rival fund of funds HarbourVest Global Private Equity (HVPE), another corporate client. However, Bird said the team expected to get “more clarity” on how the funds’ “ability to capture the substantial exit activity of 2025, and we will adjust our preference accordingly”.

Last year was a great one for Seraphim Space (SSIT) with the world’s only listed space fund soaring 121% but with the shares no longer cheap, the analysts have removed it from their list of 40 closed-end funds.

Bird said, “we initially added when the discount touched 70% with investors clearly misjudging the quality and prospects of the portfolio. The market has now come entirely come around to our view, and with the fund trading on a 9% premium we believe the risks are much more balanced.”

Winterflood’s other recommendations are: (Global) Scottish Mortgage (SMT), JPMorgan Global Growth & Income (JGGI); (North American Equities) Pershing Square Holdings (PSH); Fidelity European (FEV); Schroder Asian Total Return (ATR); BlackRock Frontiers (BRFI), JPMorgan Emerging Markets Growth & Income (JMGI); JPMorgan Japanese (JFJ), AVI Japan Opportunities (AJOT); (Specialist Equities) Allianz Technology Trust, BlackRock Energy & Resources Income (BERI), RTW Biotech Opportunities (RTW), Worldwide Healthcare (WWH); (Debt) BioPharma Credit (BPCR), CVC Income & Growth (CVCG), Invesco Bond Income Plus (BIPS); (Private Equity) HgCapital (HGT), Schiehallion (MNTN); Custodian Property Income (CREI), Target Healthcare REIT (THRL), Tritax Big Box REIT (BBOX), TR Property (TRY); 3i Infrastructure (3IN), Cordiant Digital Infrastructure (CORD), HICL Infrastructure (HICL), Foresight Environmental Infrastructure (FGEN), Gresham House Energy Storage (GRID).

Have you seen QuotedData picks for 2026? Watch this video to find out which investment companies are analysts have tipped for this year.