Impact of Trump’s tariffs on investment trust discounts
Private Equity, Growth Capital and Leasing sector discounts widen most. UK, Global Emerging Markets and Europe sector discounts narrow.
It’s approaching two weeks since Donald Trump first announced his tariffs on 2 April. The average investment trust share price total return is down 6% from Wednesday 2 April to Friday 11 April but has returned 36% and 93% over five and ten years. The average investment trust discount1 widened from -15.8% on Wednesday 2 April to -17% on Friday 11 April.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies, said: “If a week is a long time in politics, two weeks feels like a lifetime for markets. Trump’s tariffs have caused a whirlwind of uncertainty, but investment trusts have seen it all before. Trump’s tariffs are one more experience for investment trusts to add to the World Wars, the great depression, high inflation of the 1970s, Black Monday, the tech bust, the financial crisis and the pandemic, and trusts are still going strong today.
“Simply riding out the volatility is often a great investment strategy when markets become challenging. History shows that stock market corrections and bear markets happen remarkably frequently, and major markets always recover. No-one knows the impact of Trump’s tariffs on markets over the long term but brave investors who have bought when markets are suffering have been rewarded over time. Regular saving is a great way to invest when markets are unpredictable as you benefit from buying when prices are low.
“It’s not surprising that investment trust discounts widened in the sell off, but if markets continue to rally, they are likely to narrow. Discounts for the Growth Capital and Private Equity sectors have widened the most as prospects for IPOs and exits have faltered. The Leasing, China and Commodities & Natural Resources sectors have all been directly impacted by higher tariffs, with discounts moving out.
If a week is a long time in politics, two weeks feels like a lifetime for markets. Trump’s tariffs have caused a whirlwind of uncertainty, but investment trusts have seen it all before. Trump’s tariffs are one more experience for investment trusts to add to the World Wars, the great depression, high inflation of the 1970s, Black Monday, the tech bust, the financial crisis and the pandemic, and trusts are still going strong today.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC)
“The Hedge Funds sector has lived up to its name by preserving capital and has gained favour, with its discount narrowing sharply. Interestingly, discounts for the UK, Emerging Markets and Europe sectors have narrowed as investors look to diversify away from the US. The UK and Global Equity Income sectors have both attracted interest as patient investors prioritise income over capital growth.”
Investment trust sector performance and discounts that have widened the most since tariff announcements on 2 April 2025
| AIC sector | Share price total return % | Discount / premium % | |||||
|---|---|---|---|---|---|---|---|
1 yr | 5 yrs | 10 yrs | 2 April | 11 April | Change (%) | ||
| Industry ex 3i & VCTs | -5.98 | -1.69 | 35.96 | 92.75 | -15.75 | -17.01 | -1.26 |
| Growth Capital | -6.85 | 11.11 | -27.51 | N/A | -39.56 | -44.96 | -5.40 |
| Private Equity ex 3i | -7.33 | -5.99 | 67.95 | 145.94 | -29.65 | -34.30 | -4.65 |
| Leasing | -5.43 | 25.32 | 155.29 | N/A | -19.27 | -23.31 | -4.04 |
| Property - UK Logistics | -6.20 | 0.17 | 29.83 | N/A | -22.37 | -26.27 | -3.90 |
| Debt - Direct Lending | -4.04 | -0.24 | 35.45 | N/A | -15.25 | -18.83 | -3.58 |
| China / Greater China | -18.35 | 7.99 | -3.31 | 42.60 | -8.81 | -11.75 | -2.94 |
| Commodities & Natural Resources | -6.84 | -13.62 | 127.86 | 53.39 | -14.27 | -16.96 | -2.69 |
| Debt - Structured Finance | -3.02 | 16.78 | 103.55 | 83.97 | -5.92 | -8.56 | -2.64 |
| Japanese Smaller Companies | -2.46 | 1.36 | 9.10 | N/A | -8.10 | -10.47 | -2.37 |
| Property - UK Residential | -3.95 | 19.19 | 26.52 | N/A | -12.20 | -14.46 | -2.26 |
Source: theaic.co.uk / Morningstar. Share price total return to 11 April 2025.
Investment trust sector performance and discounts that have narrowed the most since tariff announcements on 2 April 2025
| AIC sector | Share price total return | Discount / premium % | |||||
|---|---|---|---|---|---|---|---|
From 2 April | 1 yr | 5 yrs | 10 yrs | 2 April | 11 April | Change (%) | |
| Industry ex 3i & VCTs | -5.98 | -1.69 | 35.96 | 92.75 | -15.75 | -17.01 | -1.26 |
| Hedge Funds | 4.64 | 17.44 | 47.54 | 77.22 | -10.96 | -7.78 | 3.18 |
| UK Equity Income | -4.94 | 6.63 | 56.86 | 67.06 | -4.84 | -3.49 | 1.35 |
| Global Emerging Markets | -7.43 | 0.06 | 26.85 | 56.08 | -5.05 | -4.06 | 0.99 |
| Global Equity Income | -4.56 | 0.74 | 61.98 | 115.27 | -4.32 | -3.44 | 0.88 |
| Europe | -5.26 | -5.10 | 52.66 | 101.01 | -6.35 | -5.74 | 0.61 |
| UK All Companies | -5.32 | 2.74 | 43.04 | 78.87 | -8.99 | -8.41 | 0.58 |
| UK Smaller Companies | -6.06 | -7.16 | 26.32 | 63.37 | -12.79 | -12.76 | 0.03 |
Source: theaic.co.uk / Morningstar. Share price total return to 11 April 2025.
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Notes to editors
- Average investment trust discount excludes 3i and VCTs.
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 300 members and the industry has total assets of approximately £260 billion.
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