Our monthly review of investment companies returning capital and raising new money shows the £12bn Baillie Gifford flagship has greatly exceeded its £2bn minimum buyback target as its shares continue to lag the underlying growth in its global portfolio.

Scottish Mortgage (SMT) has bought back more than £2.5bn of its shares since activist hedge fund Elliott Associates pressed the board of the Baillie Gifford flagship to do more to enhance shareholder value in March last year.

According to stock exchange announcements, the £12.2bn global growth investment trust bought back £226m shares in July with almost daily purchases in the market. That takes the total repurchased to £560m since its financial year-end on 31 March.

As with last month, the investment trust has regularly topped the monthly tables of trusts returning capital to shareholders. In its 2025 annual report it said that as at 31 March it had already fulfilled the £2bn two-year target for share buybacks it announced 12 months earlier.

With the shares continuing to trade close to a 10% discount to the value of its investments, the board chaired by Chris Samuel knows it cannot take its foot off the buyback pedal but can be pleased that the gap has narrowed from a 23% peak in May 2023. Although the shares lagged net asset value, they have rallied 31% in the past year. However, at £10.69 they remain well below their £15.28 peak in November 2021.

SMT is not alone

Using Morningstar data, we have estimated which investment companies returned the most capital to shareholders in July. JPMorgan Indian (JIII) comes second with an estimated £218.4m after the company recommenced buybacks after completing a 30% tender offer on 9 July.

European Smaller Companies Trust (ESCT), which earlier this year returned 42.5% of its capital to investors in a deal with activist Saba Capital, is calcuated to have returned a further £110.5m to shareholders last month.

It is followed by Worldwide Healthcare (WWH), whose focus on buying back shares after a difficult few years will have been stoked by Saba Capital emerging with a 5.4% stake in May, and Weiss Korea Opportunity (WKOF), which returned £70m in a compulsory share redemption last month as part of its managed wind-down.

These investment companies are far from alone. According to broker Winterflood, 117 London-listed closed-end funds bought back £949m of shares in July, taking the total this year to £5.8bn, 37% more than the first seven months last year when buybacks began in earnest.

Estimates of trusts’ return of capital in July

With investment companies, excluding 3i Group (III), on average trading 13% below net asset value, the pressure on boards to buy back shares is immense. Figures from Deutsche Numis show that it is hard for investment companies to argue that they can get a better return on capital from new investments. “The money spent on buying back 10% of share capital at a 40% discount would need to generate a c74% return overnight to deliver the same return,” it said in a report last month.

Estimates of trusts raising money in July

However, a few investment companies are trading on premiums to NAV as a result of strong buying demand from income investors, which means they can issue new shares and grow. The near 11% yield on the £413m Henderson Far East Income (HFEL) means its shares stand 3% above asset value enabling an estimated £11.9m of new share issuance last month.

Three high-yielding debt funds from TwentyFour Asset Management and Invesco also enjoy good ratings and have issued modest amounts in July with prospects for their asset class looking good.

Invesco Global Equity Income (IGET) stands out as a successful growth fund. Its strong one-year total return of 31.6% since emerging from the reconstruction of Invesco Select is the draw here rather than the 3.8% yield.