Trust Laggards 2025

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.