It is all too well known that the investment trust sector faces significant headwinds. Therefore, getting a new generation of investors interested in trusts is clearly important. It is in this context that the Association of Investment Companies (AIC) is stepping up its efforts, this week announcing the appointment of the marketing and advertising agency Gravity Global as its creative partner to develop a campaign aimed at people aged between 25 and 44 who do not currently invest in trusts.
Due to launch in January 2027, the campaign will place particular emphasis on artificial intelligence and online search, reflecting how younger investors discover, research and assess investment opportunities. The AIC says that its existing material performs well when people actively search for information about investment trusts, but the more fundamental problem is getting them to search for the sector in the first place.
The collaboration should be seen as an additional tool in the fightback from the investment trust industry. The main effort in recent years has been heavy spending from boards attempting to control discounts. During the first half of 2026, trusts bought back £4.1bn of their own shares (per the AIC’s half yearly review), while several large tender offers and mergers have provided further exits for shareholders.
There are signs that these measures, alongside improved market sentiment, are having an impact. The average investment trust discount reached 9.6% at the end of May, moving into single digits for the first time since August 2022. Existing trusts also raised £575m during the first half of the year, more than twice the amount in the equivalent period of 2025.
However, a sector cannot buy back its way to lasting health. Reducing the number of shares available may help narrow discounts, but it does not necessarily persuade new investors to enter the market. It should also be acknowledged that there has been just one investment trust initial public offering so far this year – the National Investment Fund of the Republic of Uzbekistan (UZNF) – a rather unusual company launched to privatise Uzbek companies.
Wider efforts like the AIC/ Gravity Global tie-up therefore have a potentially important role to play. And indeed, the campaign should be seen in the context of the broader attempt to address Britons’ reluctance to invest. In April, the Investment Association launched its Invest for the Future campaign, fronted by an animated character christened Savvy the Squirrel. Supported by financial services companies and public bodies, the multi-year initiative aims to make investing appear more relevant and accessible to people who have built cash savings but have yet to take the next step. UK savers held a staggering £360bn in cash ISAs alone as at April 2024.
Whether a computer-generated squirrel can transform Britain’s savings culture remains to be seen. However, research commissioned for the campaign found that 10.1 million savers who did not currently invest were interested in learning more, so it is possible that Savvy is pushing against an open door – which is presumably easier than trying to gnaw through it. Rather than competing immediately over which provider or fund a consumer should choose, the industry is right to first try and persuade more people that investing is something they can realistically do.
The investment trust sector has a role to play in that effort, but it faces an additional hurdle. It must not only convince people to invest, but also explain why they should choose a closed-ended fund rather than an ETF, open-ended vehicle or collection of individual shares.
There is a credible case to make. Investment trusts can give investors access to private companies, infrastructure, renewable energy projects and other assets that may be difficult to hold in other structures. Because managers do not have to sell investments to meet redemptions, they can take a genuinely long-term approach and hold less liquid assets through periods of market stress. Gearing, the ability to keep back some income for a rainy day, and independent boards are further selling points.
In theory, these advantages should appeal to younger investors with long time horizons. However, they are often obscured by language that makes the sector appear unnecessarily complicated. Discounts, premiums, gearing, revenue reserves, tender offers and continuation votes all matter, but they add another layer of explanation for somebody who can buy a global tracker through an app within minutes. It is therefore to be hoped that the AIC’s new initiative will prioritise the demystification of the sector.
The AIC is right to focus on search and AI. Younger investors are unlikely to begin their investing journey by typing the name of a trust into a search engine. They are more likely to ask how they can access private companies, generate an income, invest in infrastructure or gain exposure to a particular country or theme. It is important that trusts are presented as a natural option, with added advantages on top.
Marketing alone will not revive the sector. Any campaign will struggle to overcome persistently weak performance, excessive charges or boards that fail to respond when discounts become entrenched. However, good products cannot attract new shareholders when potential investors do not know they exist.
Savvy the Squirrel is trying to persuade Britain’s cash savers to become investors. The AIC’s new campaign must ensure that investment trusts are considered once they do. After several years spent reducing supply, the sector’s next challenge is to rebuild demand.
