The performance of investment trusts in the first quarter of 2025 has seen gold-related funds at the top of the rankings, with these funds benefiting from the uncertainty caused by international trade tensions and economic concerns. This trend reflects a growing demand for safe-haven assets like gold, which have seen their international prices soar. Meanwhile, technology-focused funds, including those with significant exposure to artificial intelligence (AI), have lagged, demonstrating the stark contrast in the performance of asset classes during this period.
Performance Overview of Investment Trusts from January to March 2025
Between January and March 2025, investment trust rankings were dominated by gold-related funds. The backdrop of heightened global economic uncertainty, fueled by tariffs and other trade policies under the U.S. administration, pushed investors toward gold—a traditional safe-haven asset. As a result, the international price of gold surged during the quarter, boosting the performance of funds primarily focused on the precious metal.
In contrast, technology funds, particularly those targeting AI and other cutting-edge tech stocks, suffered negative returns. Among the investment trusts with assets exceeding 10 billion usd at the end of March, the top 10 performers were all gold-related funds, showing the overwhelming dominance of this sector in terms of returns.
The fund with the highest return was BlackRock Japan’s “BlackRock Gold Fund,” which posted an impressive 21.9% gain. This active fund invests in gold mining stocks, which tend to be more volatile than gold itself. During the period, the stock prices of gold mining companies outperformed the price of gold, contributing significantly to the fund’s strong performance.
Following closely was Nikko Asset Management’s “Gold Fund (Currency-Hedged),” which returned 16.2%. This fund minimizes the risk associated with currency fluctuations while investing primarily in gold. A key factor contributing to this fund’s success was the strengthening of the usd against the U.S. dollar during the quarter, making the currency-hedged version more favorable than its non-hedged counterpart, which returned 11.2%.
On the other end of the spectrum, funds focused on technology stocks and AI, particularly those investing in U.S. equities, experienced losses. The fund with the worst performance was the “Semiconductor-Related Global Equity Strategy Fund” managed by Sumitomo Mitsui Trust Asset Management, which saw a significant loss of 22.9%. This fund has a high allocation to U.S. semiconductor stocks, which underperformed during the quarter. Another similar fund, “U.S. Large Technology Stocks Fund,” also posted poor returns, further highlighting the struggle faced by tech-focused investments during this period.
What Undercode Says: A Closer Look at Investment Trends
The early months of 2025 have brought significant shifts in the investment landscape, with gold-related funds emerging as clear winners. The surge in gold’s value, driven largely by economic uncertainty, has proven to be a reliable indicator of investor behavior in times of crisis. In contrast, technology and AI-driven investments, often seen as the future of global markets, have underperformed despite their long-term potential.
From an analytical perspective, the dominance of gold-related funds could be seen as a reflection of the broader economic environment. The geopolitical tensions surrounding tariffs, trade wars, and inflationary pressures have increased risk aversion among investors, pushing them toward safe-haven assets like gold. This preference for stability over growth during periods of uncertainty explains why gold mining stocks, which are more volatile than the underlying commodity, have outperformed the precious metal itself.
On the other hand, the technology sector has struggled due to a combination of factors, including market corrections and the high volatility inherent in tech stocks. Although many tech companies, especially those in AI and semiconductors, hold significant long-term growth potential, the short-term volatility and regulatory concerns have created a more challenging environment for these funds.
The varying performance between asset classes also underscores an essential investment strategy—diversification. Funds that have diversified into gold or other commodities have outperformed those that concentrated their investments in tech stocks. Investors who are willing to balance their portfolios by incorporating both safe-haven assets and growth stocks may be better positioned to weather periods of uncertainty.
As we move forward, it’s crucial to keep a close eye on the macroeconomic indicators, including U.S. monetary policy, trade relations, and the performance of the U.S. dollar. These factors will continue to play a significant role in shaping the performance of investment funds, particularly those focused on international markets and commodities.
Fact Checker Results
- Gold-related funds saw strong returns in the first quarter of 2025, driven by global economic uncertainty and rising gold prices.
- Technology-focused funds, particularly those invested in AI and semiconductors, faced significant declines in performance.
- The currency-hedged gold fund outperformed its non-hedged counterpart, reflecting the impact of currency fluctuations on investment returns.
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