At the beginning of this year, we once again challenged our analysts to come up with some ideas for investment companies that they liked, and thought could do well over the course of this year. Click here to read the original article which set out our analysts’ thinking and why they liked the stocks. We always promise to pop back in the middle of the year and see how our choices are doing – for better or worse. Having just passed the halfway point, it is time for an update.

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.

As a reminder, 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.

So, how have our core ideas done so far?

Figure 1 details all of our analysts’ top picks – broken down by core idea and spicier idea – with the performance of each stock during the first six months of 2025. Within our core ideas there is once again an interesting mix of strategies – a global equity fund with a multi-manager approach made up of concentrated best ideas portfolios; a UK equity fund with a deep value focus; a North America equity fund; a global fund of closed end funds’ broad funds, holdings companies and Japanese equities; and a large UK Real Estate Investment Trust (REIT) that is a significant owner, asset manager and developer of modern warehousing and industrial property.

Looking at the team’s core ideas at the halfway point, we can see that four of these have largely trodden water during the first of 2025. With returns ranging between -1.6 and 0.6%, there is very little to pick and choose between them. To put this into perspective, the MSCI All Countries World Index has returned a mere 0.7% (all figures in sterling terms) during the period.

Markets were very macro driven during the first six months of this year. In the face of the announcement of a draconian US tariff regime on Trump’s ‘Liberation Day’, most stocks fell sharply. Then this went into reverse when the policy was paused in the face of a bond market rout, leaving many stocks roughly where they were.

Temple Bar

Against this backdrop, the best performing core idea, by a significant distance, was James’s choice, Temple Bar, which returned just shy of 20% in the first six months of the year. This trust has benefitted from a resurgence of interest in the UK’s deeply discounted equity market, as investors have pivoted away from the US in light of the disruption being seen there. Its deep value approach has thrived despite the threat of higher for longer interest rates.

Pershing Square

The second best performing core idea – with the obvious caveat being that there is very little to choose between the bottom four – is David’s choice, Pershing Square. David wanted to stick with the US as his core idea for 2025 reflecting his belief that the US domestic economy “will once again outpace the rest of the world’s over 2025”. However, he wanted to swap out of Baillie Gifford US Growth (USA) as he felt that this trust had realised a significant amount of potential upside on the back of Trump’s election (the value of its holdings Tesla and Space X had shifted up significantly on the expectation that Elon Musk’s companies would benefit in return for his exceptional support to Trump’s campaign).

In reality, Pershing Square benefitted from significant post-election euphoria, as investors predicted a more business-friendly environment in the US, but retrenched as the new administration’s policy agenda emerged. There was a significant leg down post “Liberation Day” and then a subsequent recovery. US dollar weakness has held back its returns, so too has a failure to tackle its very wide discount. PSH’s high conviction strategy held it back in 2024 as it was underweight the magnificent seven technology stocks. However, this has helped this year as those stocks have given back some of their previous outperformance, although PSH has also been making its portfolio more mainstream, with the addition of Google and Amazon to the portfolio.

SEGRO

The third-best performing core idea was Richard’s choice, SEGRO, which is far and away the UK’s largest listed real estate company. SEGRO’s share price slumped during the second half of 2024 as fears emerged that Rachel Reeves’ inaugural budget would be inflationary, leading to a higher-for-longer interest rate environment – viewed as negative for most property companies. Richard felt that SEGRO’s c20% discount was at odds with its track record of consistently growing rents and believed that an improving outlook could see SEGRO bounce back faster than its peers, particularly once you factor in its pivot into datacentres. SEGRO has had a good start to 2024, growing its rent roll through asset management, and progressing its datacentre strategy. Its portfolio is heavily weighted towards domestic consumption – potentially limiting any direct impact from tariffs – but this could also be holding it back in an environment where the macroeconomic outlook is less certain.

Alliance Witan

The fourth-best performing was my choice, Alliance Witan (ALW). With Donald Trump poised to return to the White House when I selected ALW, I anticipated a more erratic policy backdrop, alongside inflationary pressures that could spill over globally. In that context, I felt that a diversified global portfolio with equity upside made sense, preserving value while retaining the potential to benefit if events turned out better than feared.

Alliance Witan’s global multi-manager, best-ideas approach has historically delivered in tougher markets, so I believed it was a good fit and I also felt that it had emerged stronger post-merger, with greater scale, a more competitive fee structure, and the flexibility to support shareholders through NAV-enhancing buybacks if conditions worsen.

Although most people underestimated the scale of the disruption caused by US trade policy, ALW held up well during this period. Its underweight exposure to the magnificent seven which had previously been a headwind was helpful as these stocks came off as interest cooled. The primary reason it has lagged is due to stock specific reasons as some of its larger overweight positions – for example, Diageo and United Health Group, have significantly underperformed over the short-term.

AVI Global Trust

In fifth place is Andrew’s choice AVI Global. Like many global funds, its NAV fell around Liberation Day and has subsequently recovered so that it currently sits around where it began the year. However, having begun the year around a 7.2% discount, this has widened so that it is now at a 9.6% discount, offsetting the benefits of the modest increase in NAV that AGT achieved during the period.

What about our spicier ideas?

First, an apology, the original table had incorrect return figures for all but Matt’s ideas. Clearly, an attempt to make his pick look better than the rest of us, even though he is still in the lead at the half-way mark. This was fixed on the morning of 7 July.

Figure 1 above shows that, at the halfway point, one of our spicier ideas has provided an exceptional return, one a strong return and three have effectively stood still. However, on average, our spicier ideas have given a much stronger return at 12.4%, versus a 3.6% average return for our core ideas.

Gresham House Energy Storage

In first place is my spicier idea, Gresham House Energy Storage. Ever since interest rates started to rise and the renewables funds derated heavily, we have felt that most of these are way too cheap (I actually felt that, given the predictable revenue streams and strong inflations linkages, many would make a solid core idea) – but amongst the hardest hit were the battery storage funds. These were weighed down by higher interest rates and broader negative sentiment towards green initiatives as the economic outlook faltered, but were also hit hard by problems with new software that balances the grid, which caused them to miss out on revenues which led to sharp dividend cuts.

I reasoned that these problems were being resolved and, with the improving outlook I opted for Gresham House Energy Storage, which had set out a clear three-year plan with the expectation that it would and expects to reinstate covered dividends later this year which I believed could narrow its c 60% discount.

With discounts at these sorts of levels, M&A is also an option and GRID has benefitted from the read across from Harmony Energy Income, which became a target for both Drax Group and Foresight Group, with the latter eventually winning out. The recent news about securing floor revenue agreements has given the stock another leg up in July, so far.

HydrogenOne Capital Growth

In second place was James’s choice – HydrogenOne Capital Growth (HGEN), with its extreme discount (76% at the time) a key attraction. As James pointed out, if the shares went back to trading at NAV, investors would make over 4x their money.

The extreme discount reflected the trust’s growth capital style of investing, which had suffered as investors became nervous of funds backing unprofitable and cash consumptive companies when interests rates began to rise. However, HGEN’s share price had also taken a hit in the aftermath of the collapse of HH2E, once felt to be a promising investment.

James felt the discount was overdone, arguing that many of HGEN’s investments had been able to attract large chunks of external funding – for example, in January, Elcogen Plc, a leading European manufacturer of solid oxide technology secured a €5m investment from SmartCap, an Estonian state-owned venture capital fund supporting Estonian ‘greentech’ companies – and that more of them are becoming profitable. James felt that 2025 could be the year that the trust crystallises a meaningful profit on one of its investments and, while this has not happened yet, sentiment has nonetheless improved from the depths seen at the beginning of the year.

Regional REIT

In third place was Richard’s spicier choice – Regional REIT (RGL), the regional office landlord. As Richard explained, RGL was one of the worst performing trusts in 2024, losing 40%-odd in value from an already low base. Rising rates, working-from-home and energy efficiency concerns have weighed heavily on its share price over the previous five years. However, RGL completed a hugely significant corporate action in 2024 that injected capital into the business and dealt with a looming bond maturity. Richard envisaged that, with the breathing space the capital raise has provided, RGL could conduct further disposals to reduce its debt and felt that work it was undertaking to reduce its vacancy rate could help to turn the stock around. However, Richard felt that there was also the potential for a major corporate event that could wipe out a large chunk of its 50%-plus discount.

This is yet to come to pass, but as we explained when reviewing its annual results, RGL is making progress with its turnaround plan. It is looking to secure planning consents for around 20 assets to change their uses to alternatives such as student accommodation, residential or hotel so as to reposition assets ahead of sales to maximise proceeds. In addition, it has 43 sites marked for nearer-term disposal.

Oakley Capital Investments

In fourth place was Andrew’s choice – Oakley Capital investments (OCI). Andrew argued that OCI was delivering impressive fundamental returns, from its portfolio of European private equity investments. These are in four core sectors – technology, digital consumer, education, and business services – and most of these are founder-led, disruptive businesses that are market leaders or have the potential to become so. An uncertain market backdrop has created a fertile environment for deal-making and OCI has been deploying capital at record levels – over the last two years, OCI has deployed an amount equivalent to 40% of its year-end NAV into fresh investments – laying the foundation for future returns.

The first six months of 2025 have been a quiet period for OCI with the NAV treading water. However, OCI’s investments are not wholly reliant on economic growth to drive performance, and as the recent sale of vLex illustrated, profitable realisations can be achieved irrespective of the market backdrop.

Digital 9 Infrastructure

In last place was David’s choice, Digital9 Infrastructure (DGI9), a stock that the keen eyed among you may recognise as having featured in our top picks before as David took the decision to back it again after it came last in our spicier picks for 2024.

As we identified last time, DGI9 is a special situation with well documented problems (click here to see our thoughts on this from last year) but David reasoned that with the majority of the pain already being felt – 2024 was a tumultuous year for the trust that saw a new board appointed, a new investment manager, and most importantly a new valuation agent that took a far more conservative approach that led to a 40% write down in the NAV in September – he would be remiss to change his pick.

However, the news so far this year has been difficult. The sale of Aqua Comms in in January, described by DGI9’s chair as “extremely disappointing”, largely justified the very wide discount being applied to the stock.