A review of the very best and worst investment trusts last year with some thoughts on potential recovery plays.

Last year will go down as a golden 12 months for investors in listed commodities funds, but shareholders in a variety of emerging market, technology and recovery plays also have cause to celebrate.

As precious metals and copper soared to all-time highs in 2025, data from the Association of Investment Companies (AIC) shows that the seven London-listed funds in the Commodities and Natural Resources sector generated an average 61.5% share price return in 2025.

That put the group way ahead of the next best investment trust sectors of China, Global Emerging Markets, Growth Capital and Technology which returned between 30% and 39% on average.

“It’s always good to understand which sectors and trusts have done best over the short term but investment is all about the long term. Building a diversified portfolio which meets your investment needs is the priority,” AIC communications director Annabel Brodie-Smith reminded investors.

Stellar year for Watson and Crayfourd

Top of the commodities sector was Golden Prospect Precious Metals (GPM), a £93m investment company run by Keith Watson and Robert Crayfourd at Manulife Investment Management. Its shares soared 165% on the back of a huge rebound in the shares of gold miners as bullion advanced 65% in response to the geopolitical and economic uncertainty exacerbated by US tariffs.

That made GPM easily the top-performing investment company in the UK last year (see table below), 38 percentage points ahead of the next best performer with a return that was 13 times greater than the average 12% made by investment trusts in 2025.

It was a stellar year for Watson and Crayfourd as the £129m CQS Natural Resources Growth & Income (CYN) they also run more than doubled. It achieved a 102% total return to shareholders from a broader portfolio of miners to rank it fourth in our list of top 10 risers. As a result, the company is broadly the same size it was before it had to buy back nearly 46% of its shares in July as part of a tender offer to get activist hedge fund Saba Capital off its back.

Shareholders in £1.6bn BlackRock World Mining (BRWM), the UK’s largest listed commodities fund, won’t be complaining either after it recorded an impressive 74% return. As with CYN, this was fuelled by gold and an intense demand for raw materials required to support the global roll-out of infrastructure, renewable energy and artificial intelligence.

Best performers

Source: Association of Investment Companies and Winterflood. ** Gross portfolio return 12 months to 30 September.

Emerging recoveries

A recovery in China’s stock market and a dollar deliberately weakened by President Trump’s trade policy swung momentum back towards emerging markets. Fidelity Emerging Markets (FEML) led the rebound in its sector with a 56% shareholder return. Most of this was generated by the 51% underlying growth in its investments, with a slight narrowing in the gap between its share price and net asset value (NAV) also helping. The shares ended the year at an 8% discount below NAV.

Elsewhere, a range of funds made decisive bids for the sunny uplands after a tough few years.

Second-placed DP Aircraft 1 (DPA) flew 127% higher after re-leasing its two Boeing 787-8 planes from Thai Airways to LOT Polish Airlines. However, that marks only a partial recovery for the specialist dollar-based investment company. At 14 cents today, the shares are a fifth of their value before the 2020 Covid pandemic sent the aviation sector into a tailspin.

Seraphim Space (SSIT) provides a better view in third place. The world’s first listed space technology fund made 121% for shareholders last year. With the shares yesterday rallying with other defence-related stocks following the US overthrow of Venezuela’s president at the weekend, SSIT has now surpassed the early peak it reached shortly after launch in 2021 with shares up 37% since flotation.

It’s a similar story for RTW Biotech Opportunities (RTW) which is closing in on its 2021 peak after advancing 55% last year as shares in drug developers rallied from record lows in response to falling interest rates and an upsurge in bids and takeovers.

Gresham House Energy Storage (GRID) has more to do to recoup shareholder losses from 2023 and 2024 but the 72% share price recovery last year represents a good start for the battery fund’s three-year turnaround plan.

Worst performers

Source: Association of Investment Companies and Winterflood.

Turning to the 10 worst-performing investment companies last year, it’s worth noting that the bottom five are all in managed wind-down. Tired of poor, or disappointing, returns exacerbated by wide discounts, shareholders in DGI9, AERI, LBOW, HGEN and RNEW have voted for their assets to be sold and the companies liquidated.

The pressure on renewables funds is evident with half of our list of big fallers investing in forms of clean energy. High-yielding Bluefield Solar Income (BSIF) slid 19% last year and looks likely to exit the stock market with a strategic review launched in November after shareholders objected to a proposed merger with its fund manager.

Will big fallers turn the tide?

I wonder if the top three in our list of fallers could do better this year? Lindsell Train (LTI), the top decliner, fell 14% with the dividend included. Even including pay-outs, the shares are down 43% over five years which reflects the trust’s exposure to fund manager Nick Train’s previously successful, but out-of-favour investment approach, and its large stake in the fund firm he runs with Michael Lindsell that has suffered outflows and falls in assets under management. But is the doom and gloom priced in with the shares stuck on 21% discount? Certainly the stock has significantly derated from the 100% premium it stood on in 2021.

Poor sentiment continues to undermine Augmentum Fintech (AUGM) with the shares off 15% last year despite Winterflood data showing its portfolio of unquoted financial services companies proved stable, if unexciting, in 2025. Having avoided the big write-downs that have afflicted some other early-stage investors, AUGM has delivered a 34% underlying return in the past five years and yet its shares have dropped by a third to languish on a 43% discount. That valuation gap looks unsustainable. Something could happen to close it. Perhaps it’s already happening as the shares have rallied since early December when the company said £125m of its investments were effectively valued at nil by its share price.

Lastly, will JPMorgan US Smaller Companies (JUSC) catch a break in 2026 after its 15% decline last year? Donald Trump’s re-election in late 2024 prompted a value-style rally that left this former top-performing small-cap growth investor out in the cold, and badly lagging the market’s rebound since “Liberation Day” last April. With the company actively buying back shares, the discount has stayed relatively narrow at 7% so there isn’t a valuation gap to exploit as such, just a hunch that the market could swing back in its direction.