# Investment trusts: Light at the end of the tunnel

> After years of rising discounts and activist pressure, investment trusts are showing real signs of recovery.
- Title: Investment trusts: Light at the end of the tunnel · MoneyWeek
- Summary: After years of rising discounts and activist pressure, investment trusts are showing real signs of recovery. Investment trusts are recovering from recent…
- Keywords: investment trusts, discounts narrowing, activist shareholders, fundraising recovery, cost disclosure, financial conduct authority, pension schemes, dividend income, open-ended funds, private assets, Investment, trusts
- Source: MoneyWeek — https://moneyweek.com/investments/investment-trusts/investment-trusts-why-there-is-light-at-the-end-of-the-tunnel
- Published: 2026-09-25T11:37:23+00:00
- Read time: 1 min
- Topics: investment trusts, discounts narrowing, activist shareholders, fundraising recovery, cost disclosure, financial conduct authority, pension schemes, dividend income, open-ended funds, private assets
## Investment trusts face tough years
Rising interest rates, cost-disclosure problems, and tech market dominance pushed discounts to 18.8% by October 2023, triggering activist shareholder involvement.
## Discounts are finally narrowing
Investment trust discounts have fallen from 18.8% in October 2023 to 11% by end of July 2024, as boards pursue mergers, buybacks, and fee cuts.
## Fundraising is making a comeback
In the first half of 2024, Seraphim Space raised £137 million, while TwentyFour Income Fund and Invesco Bond Income Plus raised £98 million and £85 million respectively.
## Cost disclosure rules finally fixed
The Financial Conduct Authority updated cost disclosure rules to recognize investment trusts' unique characteristics, removing artificial expense barriers that deterred wealth managers from buying them.
## New rules protect against activist overreach
The FCA proposed rules to prevent activist shareholders like Saba Capital from seizing board control to become managers, protecting other shareholders' interests.
## Pension schemes unlock new demand
The new Pension Schemes Act allows pension funds to use investment trusts to meet private asset requirements, opening opportunities in infrastructure, renewable energy, and property.
## Long-term performance remains strong
Investment trusts returned 15%, 26%, and 148% over one, five, and ten years to July 2024, outperforming sister open-ended funds in 77% of cases over a decade.

> the average investment trust has returned 15%, 26% and 148% over one, five and ten years respectively
## Dividend heroes offer income stability
Twenty investment trusts have raised dividends every year for over 20 years by retaining up to 15% of income and using capital profits to enhance payouts during market downturns.
## Marketing push targets younger investors
The Association of Investment Companies will launch a campaign next year to increase awareness of investment trusts among millennials and Gen Z.
## Key takeaway

Investment trusts are recovering from recent challenges through narrowing discounts, new regulatory clarity, and structural reforms that make them more attractive to investors.