Specialist investment funds review

1. Allianz Technology IT

Technology stocks have continued to dominate global markets, but it has been a wild ride this year. Alongside broader equity markets, tech stocks reacted poorly to Donald Trump’s announcement of extreme tariff levels for countries with trade surpluses with the US. Yet they then rallied strongly as these were increasingly seen as more of a negotiating tool than a likely outcome.

Many shares in the sector, notably chip behemoth Nvidia which recently became the world’s first $4 trillion company, forged to new highs as investors once again focused on the potential for the large tech companies to harness Artificial Intelligence (AI) to improve data collection and support automated processes. However, a weaker US dollar has led to weaker returns for UK investors from the sector and US assets more widely. Past performance is not a reliable indicator of future returns.

AI is one of the key themes this specialist investment trust is exposed to, alongside cybersecurity, cloud computing as well as specialist semi-conductors which the managers prefer to the generic chipmakers because they believe profit margins will expand faster. It is no surprise to find the top holdings include Apple, Nvidia, Microsoft, Alphabet and Meta. However, the trust offers exposure to the next tier of technology companies, not just the mega caps. The team are also comfortable with zero weights in some of the large legacy tech companies that don’t have the desired level of future growth potential.

Greater exposure to smaller names hasn’t generally helped the trust’s recent relative performance versus its benchmark over the past year, although a top holding in Nvidia has assisted progress. For long-term investors with tolerance for high levels of volatility, we believe the Trust is well worth considering for exposure to the sector. The management team offer broad experience and expertise and are based close to the heart of the action in Silicon Valley.

Potential investors should be aware that this is an investment trust, a type of fund that is generally higher risk. This is because it is traded continuously through market hours with the price varying to that of the value of the underlying assets. You can find out more about the characteristics of investment trusts in my previous article here.

2. BlackRock Gold & General and iShares Physical Gold ETC

Gold has benefited as a safe-haven trade recently, with the price of the metal propelled to new all-time highs of around $3,500/oz in April. Central banks, investors, and households in the East have emerged as heavy buyers in the bullion market, and the heightened global uncertainty has increased the allure.

In many ways, gold’s renewed popularity is linked to the trend of de-globalisation and heightened international tensions as central banks increasingly crave a non-politicised reserve asset. As the world continues to fragment geopolitically, this trend could continue. When things seem uncertain, the timeless and permanent nature of gold takes on greater appeal.

Gold also has a special status as a hedge against inflation – unlike paper currencies, so, pounds, dollars, euros and so on that get devalued over the years, gold’s supply is finite. And although it can be notoriously fickle in the short term, when measured in decades, it has done a good job in keeping up with rising prices.

On balance, it’s worth considering a small amount of exposure to gold as a ‘real’ asset with wealth preservation characteristics, but bear in mind it can be a frustrating asset to own with extended periods in the wilderness.

Some gold investors like to buy coins or bars, but this is unlikely to be a viable option for most people due to storage and insurance requirements. Fortunately, there are convenient ways to add gold to a portfolio such as an exchange-traded product. We tend to prefer ‘physically-backed’ ETCs (exchange-traded commodities, which are similar to ETFs or exchange traded funds) such as iShares Physical Gold. With this product the underlying gold is kept securely in a vault, as opposed to derivatives-based funds where there can be some added risk and complexity.

A higher risk route into gold is through shares in gold mining companies. These tend to represent a ‘geared’ play on the gold price, meaning they multiply the effect of a rise – but also multiply any fall. This is because profits can be highly sensitive to what the gold price is doing, and the riskier firms could even swing from profit to loss or vice versa on these moves.

Having lagged the bullion price for four straight calendar years, gold equities have finally found some better form. They have been the top performing area for fund investment in 2025 so far, although the area is highly specialist, exceptionally volatile at times, and should only form a small part of a diverse portfolio.

One option in this particularly adventurous area is Blackrock Gold & General. Managed by the experienced Blackrock's Natural Resources Team, it invests in gold and other precious metal-related businesses on a worldwide basis. The fund holds between 50 to 80 companies, the vast majority of which are established producers of gold, with exposure to pure exploration stocks (typically the riskiest in the area) relatively low compared with some of its peers.

Read more: How to invest in gold, silver and other commodities

3. FTF Clearbridge Global Infrastructure Income

Infrastructure assets can offer income, some inflation protection and typically low correlation with the stock market and the economic cycle, and often some stability when well managed and free from expensive debt. They provide the essential framework of services to support economic and social activity, for example, electricity, gas, water and transportation. Assets often have an important strategic position and face less competition, and they may have more predictable cashflows which are often linked to inflation.

The area is also expanding with accelerating electricity demand calling for huge investment in new, more efficient electricity generation, storage and transmission, as well as data centre demand from the growth of artificial intelligence.

However, infrastructure assets are also usually ‘long duration’, which means they tend to have a defined element to their returns over a long period – a characteristic they share with bonds. As such they have struggled as interest rates have risen and subsequently remained high. This resulted in a poor couple of years, but from this point their fundamental characteristics could drive decent returns that are less dependent on economic growth flourishing.

This fund’s managers are experienced infrastructure specialists based in Australia and have built an impressive record whilst consistently delivering an attractive income yield. The fund invests in shares of companies around the world operating in infrastructure related sub-sectors. It is exposed to both regulated assets (gas, electricity and water utilities) and to ‘user pay’ assets (toll-roads, airports, rail and communication towers).

There is an element of political risk to bear in mind, and at a single company level there are a myriad of variables that can impact operations and profits.

As with any investment area, diversification makes sense, and we believe this fund is a sensible and well managed option. Compared to some others in the sector it is more income-orientated with a higher dividend yield. The strategy has a structural tilt towards income-generating regulated utilities (minimum 50%) but also maintains the flexibility to invest in more growth-oriented infrastructure. The fund has beaten core global infrastructure indices in the year to date, and is ahead of the peer group average, although past performance is not a reliable guide to future returns.

4. Pantheon International

There are an increasing number of opportunities outside of stock markets in the world of private investments. Investment Trusts like Pantheon offer investors a gateway into this area that is normally only accessible to institutions and high net worth individuals. It invests in a global, diversified portfolio of private equity-backed companies, using a mixture of direct investments and private equity funds managed by leading firms.

The depth and expertise of the Pantheon investment team combined with the broad nature of the underlying portfolio and solid long-term track record makes the trust a worthy consideration for exposure to the asset class, although past performance is not a guide to the future. The approach focuses on maintaining varied exposure to different parts of the private investment life cycle. Investors in the Trust therefore access a portfolio diversified by manager, investment type, stage, geography, fund, vintage and sector.

Pantheon has also been a leader in buying back its own shares to close a wide discount to net asset value, something that’s persisted across the sector in recent years, but shares have recently fallen back to a substantial discount reflecting persistent negative sentiment. There remains a perception among investors that higher interest rates will have a big impact on private equity-owned companies, which tend to have higher debt. The managers point out, however, that generally their portfolio companies do not rely on debt as much as is average for private equity.

We continue to believe the Trust is useful exposure to a sector that provides diversification from broad share markets, albeit private equity is still equity, and investors should expect it to move roughly in tandem rather than it being truly ‘alternative’.

5. Schroder Global Energy Transition

Investment in climate solutions has rapidly moved from the periphery into mainstream. To achieve climate goals, how we produce, distribute and consume energy will have to change significantly and it will require huge investment to get to net zero. Consequently, Energy transition is a multi-decade theme where capital will be reallocated on an unprecedented scale, creating investment opportunities across a multitude of sectors and industries.

By investing in industry-leading sustainable companies in areas such as batteries, electric vehicles and wind power, investors can help align their portfolios with that transition. Companies have a key role to play in the battle against climate change and the evolution of a more sustainable energy system, and the huge investment required will likely create significant opportunities. Businesses delivering products or services that are part of the solution should be well placed to deliver growth to shareholders.

We believe a selective, disciplined and active investment approach such as the one adopted by this fund is a sensible means to access the space for a small portion of a portfolio. The combination of a well-resourced team and competitive charges for a fund of its type add to the attraction. However, even among the more established businesses in the energy supply chain there will likely be significant losers as well as winners, so the positive environmental credentials should not distract from the high risk involved.

Over the past year, for instance, the fund has suffered the headwind of exposure to smaller and mid-sized companies, which have lagged overall in an environment of higher interest rates, as well as negative consequences of a rollback of green subsidies in the US. However, the fund did significantly outperform its benchmark, the MSCI Global Alternative Energy index by focusing on higher quality companies as well as retaining some cash at times to guard against volatility.

While the fund has been paddling upstream somewhat in terms of performance to date, the managers have proven to be adept in navigating the sector. For patient, longer-term investors it could be worth considering as a more adventurous holding in a broad portfolio.

6. Worldwide Healthcare IT

The key structural driver behind the health sector is growth in patient numbers, spending and drug approvals. The world will have 1 billion more elderly people by 2050, which means more government and private spending. A growing middle class in the developed world is also likely to add substantially to the numbers of patients and worldwide spend. At the same time, the industry is producing cures, treatments and technologies at a faster pace than ever before – so it is well placed to meet the growing demand.

However, a regulatory cloud is presently hanging over the industry following the election of Donald Trump and his appointment of Robert F Kennedy as US health secretary. Kennedy has been characterised as a vaccine sceptic while Trump has threatened greater drug pricing controls and to add significant tariffs to imported pharmaceuticals, which could eat into company margins.

This specialist investment trust targets the healthcare sector through a globally diversified portfolio of pharmaceutical and biotech stocks. It has a solid long-term track record of stock-picking and a highly experienced management team. The portfolio is focused but well spread by sector covering pharmaceuticals, healthcare equipment and supplies, healthcare services and biotechnology.

The latter is a differentiating factor to others in its immediate peer group, especially since it includes emerging biotech companies that are typically smaller in size. This has been a hindrance to performance in recent years, but the managers believe the businesses will ultimately benefit from higher levels of innovation and growth.

They also believe the broader sector will escape the worst of the tariff concerns as companies adapt their supply chains. They also point out there is considerable doubt whether legislation affecting companies will be enacted, and that tariffs via executive order would likely be limited in scope.

Shares in the Trust have also had a tough time due to a widening discount, but the Board have actively buying back stock in response.

Find more investments on our Preferred List