As we begin another year, here at QuotedData, we thought we’d have some fun and challenge our analysts, once again, to come up with some ideas for investment companies that they like and think could do well over the course of the coming year but first, we’re also going to take a look back and see how well we did last year.

To recap, each analyst was asked to select two ideas – one that was a relatively mainstream core investment (although this could, for example have a strong growth flavour bias to it and so is not without risk) and a spicy idea that is a bit more adventurous. The yardstick against which we are judging our ideas is their performance in share price total returns (sterling adjusted).

Please note, nothing in this article is intended to encourage the reader to deal in any of the securities mentioned in this article. However, if you have any thoughts, we’d love to read about it in the comments below.

Within our core ideas for 2024 there were an interesting mix of strategies – a fund focused on Asia, one focused on Europe, another focused on the US, a global fund focused on utilities and infrastructure as well as one focused on UK commercial property (click here to read about the thinking behind 2024’s top picks). At the halfway point of the year, all of these funds had made their shareholders money, but by the end of the year, there had been some marked shifts in positioning and the performance of the commercial property trust had just tipped into the red.

In retrospect, even by the end of June it was clear that, for our core ideas, we had all chosen strategies that we believed would benefit from falling interest rates, on the expectation that inflation would continue to trend down as the economic outlook improved. Broadly speaking, this worked out in the first half of the year but not as well as we had hoped, as inflation did not fall as fast as in the west as most expected. In many respects, the second half showed more of the same. However, the election of Donald Trump as president in the US proved to be a pivotal point. In the days after the election, US bond yields jumped on fears that his policies would be inflationary, but then settled again. US equity markets rallied, although other regions such as Asia and Europe, and growth equities were hampered by fears of heightened trade wars.

Perhaps unsurprisingly, David’s choice of Baillie Gifford US Growth (USA), takes first place within our core ideas (it was in second place at the halfway stage). USA has benefited from these trends, particularly following the election of Trump which saw Tesla and Space X shift up on the expectation that the new president will be very happy to provide strong support to Elon Musk’s companies in return for the exceptional support Musk provided to Trump’s campaign.

USA’s share price was also driven up by some sustained buying as Saba Capital built a stake. Having kept quiet about its intentions until the closing days of 2024, Saba has since requisitioned USA in an attempt to seize control of the trust, along with a number of others. We think that Saba’s moves would be to the detriment of other shareholders – you can read more of our thoughts on this by clicking [here]. Given its strong performance, USA does not deserve to be under attack. Saba could have taken the opportunity to exit at a nice profit rather than doubling down and backing themselves into a corner. We’ll be interviewing USA’s manager Gary Robinson on the weekly show in a couple of weeks.

Andrew’s choice, Ecofin Global Utilities and Infrastructure ranks in second place. Global utilities and infrastructure stocks have been held back by worries over the pace of interest rate cuts. However, EGL has benefited from having exposure to stocks such as Vistra and Constellation – amongst the top 10 best performers in the S&P500 – which are perceived to be beneficiaries of the AI boom (as they are able to provide decarbonised baseload power to fuel energy-hungry data centres).

In third place is James’s choice Montanaro European Smaller Companies. European small caps were knocked by some unexpected political shifts, weak Chinese demand for European exports, and Trump.

Fourth is my choice, Pacific Horizon. Asia and growth have suffered as markets focus on the re-inflationary aspects of the incoming US administration’s policy proposals.

In fifth place is Richard’s choice, LondonMetric Property. Property as an asset class had a bounce as interest rates started to recede but has found itself back in the firing line as higher than expected inflation has raised the prospect of higher for longer interest rates and Rachel Reeve’s inaugural budget hit rate sensitive sectors like real estate.

And our spicier ideas?

In first place is James’s choice, Chrysalis, which had a spectacular second half of 2024 as it has announced a raft of deals that not only validated its NAV but have also highlighted that there could be significant latent value hidden within its portfolio. In July, it announced the sale of Graphcore at a 25% premium (click here to read), then September saw the announcement that Featurespace was being sold to Visa at a 20% valuation premium (click here to read about this deal). Finally, the announcement in November of an IPO for Klarna in the US (click here for more) saw Chrysalis’s share price boosted again. Chrysalis announced its intention to return £100m to shareholders earlier this year and began chipping away at this following the Graphcore sale. Following the completion of the Featurespace sale in December, it said it would ramp up buyback efforts.

In second place is Andrew’s choice Golden Prospect Precious Metals (GPM), which performed strongly as increasing concerns surrounding geopolitical risks and persistent inflation saw gold benefit as investors looked for ways to protect their investments.

Richard’s choice, New River REIT, completed its merger with Capital and Regional earlier this year. In the short term, the deal has weighed on its share price but this REIT should be on a growth path now. Like Richard’s other choice, London Metric Property, it too suffered from an environment of higher for longer interest rates and the impact of Labour’s budget on interest rate sensitive sectors.

Occupying the fourth-place position is my choice, Geiger Counter, which, following a spectacular 2023 has had a more challenging 2024 as concerns about economic activity have weighed on the uranium price. This trend, which was prevalent in the first half of the year, dragged into the second although, more recently, its NAV has benefited from renewed optimism in nuclear energy alongside rising prices as supply has been constrained by the impact of a Western ban on Russian uranium as the war in Ukraine drags on.

In fifth place is David’s choice, Digital 9 Infrastructure (DGI9). Investors were not happy about the sale of Verne Global, seen to be DGI9’s crown jewel, but this allowed the majority of the fund’s debt to be repaid and there was a hope that the next disposal would trigger a capital return that would lead to a major bounce in its share price. In the event, that did not happen. When DGI9 announced its 30 June NAV this had collapsed to 45p from 79.3p as at 31 December 2023 – a reduction of around 43% (click here to read more on this). The problem was that DGI9’s NAV calculation had continued to assume that the trust would be able to grow assets, while not having the finance in place to do this, which came to light because the new board went through the portfolio with a fine toothcomb. The drop was significant and did nothing to reassure investors.

New for 2025

Each of our analysts’ core and spicier ideas has a brief summary below. As we did in the middle of 2024, we plan to pop back later in the year to see how our choices are doing. In the meantime, we wish you all a happy and prosperous 2025.

Matthew Read

Core idea: Alliance Witan (ALW)

Donald Trump is yet to re-enter the White House but the signs already point towards a much more erratic period ahead for the US, coupled with policies that are likely to prove inflationary and impact other jurisdictions. I think financials markets will continue to make progress, but with greater volatility and interest rates remaining higher for longer. Against this backdrop, my core idea is Alliance Witan with its global multi-manager approach (each runs a concentrated portfolio of its 20 best ideas) that has performed well in more challenging environments. It is benefiting from increased scale and an improved fee structure post the merger and, if the outlook deteriorates, shareholders can still benefit from its NAV-accretive repurchases.

Spicier idea: Gresham House Energy Storage (GRID)

Bar the odd problem child, we think most of the renewable energy infrastructure funds are way too cheap – many would make a solid core idea in my view – but amongst the hardest hit are the battery storage funds. Like their peers, these have been weighed down by higher interest rates and negative sentiment but were also hit hard by problems with new software that balances the grid (they missed out on revenues, which forced dividend cuts). However, this is now improving (click here for more) and so I’ve chosen Gresham House Energy Storage, which has set out a clear three-year plan and expects to reinstate covered dividends this year which could see its circa 58% discount start to narrow.

James Carthew

Core idea: Temple Bar Investment Trust (TMPL)

The trust is the second-best performing UK equity income trust over the past 12 months and tops the table over three years. However, I think it can extend its run for a further year. UK stocks are overdue a recovery relative to developed market peers. Selling pressure related to the recent budget, a flat economy, and stubborn inflation extended the misery in the last quarter of 2024. However, I think a value approach can continue to deliver results in this environment. If UK markets don’t recover, takeovers will continue. Share buybacks are helping to drive the trust’s returns. At 7%, the discount is not too bad, but there is scope for it to narrow if sentiment improves.

Spicier idea: HydrogenOne Capital Growth (HGEN)

The shares are trading on an extreme discount to NAV of 79%. To put this another way, if the shares went back to trading at NAV, investors would make almost 5x their money. The extreme discount reflects the trust’s growth capital style of investing – when interest rates started to rise, investors became nervous of funds backing unprofitable and cash consumptive companies. It also reflects some recent bad news when a promising investment went bust. I am not saying that there won’t be other casualties along the way, but many of HGEN’s investments are securing large slugs of external funding, and more of them are becoming profitable. 2025 could be the year that the trust crystallises a meaningful profit on one of its investments.

David Johnson

Core idea: Pershing Square (PSH)

While sticking with my theme of last year, I have moved my first pick away from Baillie Gifford US Growth (USA) – which has rapidly begun to realise a significant amount of its potential value on the back of Trump’s election – to Pershing Square (PSH). For me, Pershing Square presents the most attractive discount opportunity within the North American sector, trading on a 30% discount. Its portfolio also represents companies that are better primed to capitalise on the strength of America’s domestic economy, which I believe will once again outpace the rest of the world’s over 2025.

Spicier idea: Digital 9 Infrastructure (DGI9)

I’m sticking with Digital 9 infrastructure again this year. I picked it last year on the prospect of its discount closing as it winds up, and that potential is still there. As it panned out, when I picked it last year there was an amount of pain that was yet to be felt. 2024 saw a new board come in, a new investment manager, and most importantly a new valuation agent was appointed to value its portfolio – taking a far more conservative and pragmatic approach – writing down its NAV by c.40% in September. With that behind it, finally signs of some progress on the disposal of its portfolio (see here), and cognisant that had you followed my advice last year, you would be afflicted by the absence of any real liquidity in its shares, I would be amiss to change my pick, especially given its still wide 58% discount.

Andrew Courtney

My previous year’s picks were based on a healthy level of scepticism around the economic outlook, suggesting there were big question marks around the direction of “rates, geopolitics, elections, China, US valuations, and of course inflation.” Fast forward 12 months, and I’m even more confused than ever. For that reason, I think it’s sensible to look at investments which are less dependent on any particular economic outcome such as Oakley Capital Investments (OCI), and AVI Global (AGT).

Core idea: AVI Global (AGT)

The trust’s managers have worked to shift its exposure away from the broader market, instead targeting idiosyncratic catalysts such as corporate takeovers to drive performance. This strategy has delivered annualised returns of more than 10% over the past decade, and with volatility on the rise and the market still recovering from the dislocations caused by the post pandemic inflation surge, I expect there to be plenty more opportunities for their active approach to bear fruit.

Spicier idea: Oakley Capital Investments (OCI)

Despite delivering impressive fundamental returns, OCI continues to trade on a steep discount of almost 30%. The company invests across a range of highly profitable and reliable assets which are not wholly reliant on economic growth to drive performance, including education and technology.

Richard Williams

Core idea: SEGRO (SGRO)

The largest UK listed real estate company by far, SEGRO suffered a large share price slump towards the end of the year as fears were raised that Rachel Reeves’ budget would be inflationary and cause a higher-for-longer rate environment. The company, which owns a £20bn portfolio of logistics assets in the UK and Europe with a substantial development pipeline (including a sizeable data centre opportunity) yielding 7.7%, now trades on a 20%-odd discount to NAV, which is incredible when you consider its track record of consistently growing rents. An improving macroeconomic situation should see its share price bounce back quicker than its peers.

Spicier idea: Regional REIT (RGL)

The regional office landlord was one of the worst performing trusts in 2024, losing 40%-odd in value – from an already low base as the trifactor of rates, working-from-home and energy efficiency pummelled its share price over the last five years. The company did complete a hugely significant corporate action in 2024 that injected capital into the business and dealt with a looming bond maturity. While further disposals to reduce debt and continued work to lower its vacancy rate could help to turn the tide. However, the play here really is a major corporate event wiping out a large chunk of its 50%-plus discount.