Investment trusts have generally outperformed “sister” open-ended funds over all standard time frames, according to recent research from the Association of Investment Companies (AIC)
According to the AIC, “sister” strategies refer to pairs of funds, an OEIC and an investment trust with similar mandates and named managers.
Over 10 years, 77% of investment trusts outperformed OEICs run by the same set of managers. While investment trusts have also outperformed over other standard time frames, results varied, with as many as 82% of trusts outperforming over the past 12 months.
Nick Britton, research director at the AIC, said part of this was due to “closed-ended structure, which enables their managers to buy and sell assets at the time of their choosing, not when investors buy or sell”. On top of this, he added investing in less liquid assets and gearing can be risky, but can ultimately add to long-term returns.
“Investment trusts won’t always outperform open-ended funds, especially in down markets when discounts tend to widen,” he noted. For example, over the past five years, funds outperformed closed-end counterparts in 47% of circumstances (22 cases vs 25 cases).
The AIC attributed this to the widening investment trust discounts over this period, which climbed from 4% at the end of March 2021 to an average of 14% in March 2026.
“But over a market cycle, investment trusts’ structural advantages support strong performance,” Britton concluded.
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Over the past decade, the average investment trust outperformed its sister fund by roughly 1.3 percentage points per year, or £31 per £100 invested.
The widest outperformances came from the BlackRock and Baillie Gifford ranges. BlackRock World Mining Trust, managed by Evy Hambro and Olivia Markham, outperformed its open-ended counterpart, BGF World Mining, by roughly 190 percentage points, as of the end of Q1 2026.
Three sister pairs from the Baillie Gifford range also outperformed, according to the research.
Pacific Horizon was up 125 percentage points versus Baillie Gifford Pacific, Edinburgh Worldwide beat Baillie Gifford Discovery by 111 percentage points, while Monks Investment Trust was up 245.7% compared with Baillie Gifford Global Alpha’s 173.3% return.
Meanwhile, the worst performance of a trust versus its sister fund was the CC Japan Income and Growth fund, which rose 176.9%, a solid return by most metrics. However, the open-ended Chikara Japan Income and Growth fund surged 218.3% over the same period.
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The five-year data was much closer, with the average investment trust delivering just 0.5 percentage points of outperformance. At the top end of the chart, investors could still see differentiated returns between sibling strategies.
Investors in Ken Wotton’s Strategic Equity Capital Trust would have been up 32% over the past five years, but in the open-ended WS Gresham House UK Smaller Companies fund, they would have made just a 0.24% total return.
This is a 31-percentage-point return difference, much lower than the widest gap between a pair over 10 years.
Notably, the CC Japan Income and Growth trust made another appearance at the bottom of this over this time frame. The trust was up 84.5%, but the fund had surged 141.9%, a much stronger performance.
For comparison, the next widest outperformance by an open-ended fund was Baillie Gifford Japanese, which outperformed its trust counterpart by 15 percentage points.
In fact, CC Japan Income and Growth was also the worst-performing trust vs fund pair over three years, down by another 47 percentage points.
By contrast, Edinburgh Worldwide firmly outpaced Baillie Gifford Global Discovery over the past three years, with the trust rising by 39.8%, while the OEIC fell by 15.1%.
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