Retail investors become largest UK investment owners as wealth managers look elsewhere
Retail investors solidified their place as the largest group of investment trust owners last year, as wealth managers and institutional investors decreased their holdings.
As of 2025, retail investors hold a combined £50.5bn, equivalent to a 37 per cent stake, according to the latest state of the nation report from Warhorse Partners.
This was up from £40.3bn held five years ago, representing a 34 per cent stake, across platforms, savings schemes and individuals holding paper share certificates.
The number of shares owned by retail investors increased by 4.6 per cent, while the total value of holdings rose by 11.5 per cent.
Analysts credited the rise to lower interest rates, with the Bank of England expected to cut from 3.75 per cent in the Spring, enhanced dividend policies and media engagement making trusts more attractive to individual investors.
Jonathan Davis, editor at the Investment Trusts Handbook, said: “After a turbulent but transformative period, 2025 marked a strong comeback for investment trusts rewarding patient shareholders with narrowing discounts, solid returns, and a renewed edge over open-ended funds as the sector evolves to meet a changing investor base.
“80 per cent of investment trusts are now once again outperforming open-ended funds with equivalent mandates.”
Institutional and wealth managers slip
In contrast to retail investors swallowing up more of the market, both institutional investors and wealth managers loosened their grip, opting to dip into other markets.
Institutional investors now comprise 27 per cent of the universe by value of shares held, representing £35.8bn, up from £33.3bn in 2020.
The number of shares held by institutions decreased 5.4 per cent last year, however the value of shareholdings rose by 5.5 per cent, as more institutions leaned towards keeping fewer higher-value assets instead of having a swollen portfolio.
The sector is also showing increasing interest in alternative investments including private equity, hedge funds, renewable energy and property trusts.
Wealth managers also reduced their share numbers by nine per cent, but their values jumped 4.4 per cent to £38.3bn.
Ongoing industry consolidation and rising investment minimums continued to put pressure on holdings, and has forced many firms to grow or merge in order to increase retail investor ownership.
Davis said: “What it shows is that individual investors continue to account for a growing percentage of share registers, while that of wealth managers continues to decline.
“These two trends, slow but sure, have been running for a few years now.
“It is one reason why many more trusts are investing time and money in improving their disclosure policies and communicating better what they do across an expanding range of media channels.”