Investment trusts are often described as the best-kept secret in financial services.
It’s a phrase repeated with a mixture of pride and frustration by those who know the sector well. The pride comes from a belief that investment trusts are one of the most robust and versatile investment structures available. The frustration comes from the fact that, despite more than 150 years of history, they remain largely absent from mainstream investing conversations.
The problem is not that investment trusts are hidden. They are well documented, heavily regulated and supported by a constant flow of factsheets, annual reports, fund manager commentary and market announcements. The information exists in abundance.
The challenge is that investment trusts are still known primarily within a relatively small circle of professional investors, advisers and market enthusiasts. Outside that group, awareness remains limited. They are rarely discussed around the dinner table, seldom feature in everyday conversations about investing and are often overlooked by people making decisions about their long-term savings.
For a sector with such a compelling story to tell, that represents a significant missed opportunity. The question is not whether investment trusts deserve a wider audience. It is why they have yet to become a more familiar part of the investing landscape.
That is ultimately a communication challenge. And it is one the sector can no longer afford to ignore.
Blueprint Session #1 examined the structural pressures driving the sector’s discount problem, the neuroscience of why investment trust communications fail to build the awareness the sector needs, and what boards and marketing teams need to do differently as a result.
The Crisis Behind the Discounts
Quill’s session opened with a picture of the sector that was direct in its assessment. The UK investment trust sector is facing its sharpest structural squeeze in a generation. Sector-wide discounts have widened as risk-free rates rose for the first time in over a decade, asset allocation shifted away from specialist closed-ended funds, and retail flows turned negative. The regulatory environment, particularly MiFID II and PRIIPs cost-disclosure rules, has made trusts appear more expensive than they truly are, discouraging intermediaries. Sector consolidation has added further pressure. And a generational gap is opening: younger investors aged 18 to 34 have materially lower awareness of investment trusts than older cohorts, which has a direct impact on retail demand.
The sector’s primary response to widening discounts has been share buybacks. Buybacks are a legitimate and useful tool. They are not a solution to a structural awareness and demand problem. They manage supply. They do not create demand. And as Quill put it plainly: a twelve-month plan that embeds buybacks within a long-term strategy needs to be paired with deliberate, sustained demand creation. Without that pairing, the sector is applying a supply-side fix to a demand-side problem.
Demand can be built. Through targeted campaigns and digital platforms that reach retail investors where they are. Through reframing the genuine advantages of the closed-ended structure, permanent capital, independent board oversight, dividend reserves, access to illiquid assets, in language that connects with what investors actually want. Through linking investment trust investments to national economic goals: trusts that finance renewable energy, infrastructure, biotech, and digital infrastructure are funding the real economy in ways that resonate with a public audience. And through engaging regulators on fee transparency and platform rules, to reduce the structural friction that currently works against the sector.
The conditions under which the sector’s discounts narrow are, in part, communications conditions. Consistent messaging reduces discount volatility and supports share price stability. Transparency about performance, fees, risks, and governance maintains investor confidence through difficult periods and prevents the rumour and surprise that drive overreaction. Building a clear narrative around trust purpose and long-term value is not a soft aspiration. It is a direct input to sector health.
Why the Story Doesn’t Land
The question the sector has been slower to answer is not whether it needs to communicate better. Most people working in investment trusts would agree it does. The question is why the volume of communication that already exists isn’t producing the awareness and understanding the sector needs.
The answer is neuroscience.
When an investor reads a factsheet, processes a performance chart, or works through a regulatory disclosure, the language areas of the brain engage: Broca’s area, responsible for planning and producing language, and Wernicke’s area, which handles understanding. These areas process information logically. The content is received and comprehended. But it is passive comprehension, not active engagement. It is processed, not felt. And what is not felt is rarely remembered.
When an investor hears a story, something different happens. The sensory cortex activates. The amygdala engages, the brain’s emotional centre, which determines significance and emotional salience. The hippocampus kicks in, linking emotion with memory and making the experience retrievable when the decision moment comes. The brain doesn’t just process a story. It experiences it.
Emotion is the brain’s highlighter pen. It tells us what to remember. Investment trust communications are almost entirely built on the assumption that if you give investors enough information, clearly presented, the rational decision will follow. Kahneman’s research is clear on this: System 1, the fast, emotional, intuitive mind, makes the decision. System 2, the rational, analytical mind, justifies it afterwards. Awareness begins with emotion. Conviction is confirmed by reason. The emotional response comes first, and without it, the rational case never gets the chance to land.
Hemingway captured the principle in six words: “For sale: baby shoes, never worn.” It is a complete story. The emotion, the grief, the implication, is entirely in what’s left unsaid. The brain fills it in. That emotional participation is what makes it memorable. The Iceberg Theory: 10% of the story is in the words, 90% is what those words make you feel and imagine. Investment trusts are, on the whole, giving investors the 10% and leaving the 90% empty.
Frameworks That Have Stood the Test of Time
Storytelling is not a modern marketing technique. It predates writing. The 35,000-year-old cave paintings found in France and Indonesia depict hunts, survival, transformation: teaching and warning systems built to transfer knowledge and create shared meaning.
The frameworks that evolved from those origins are still in use because they match how humans think, feel, and make sense of the world. Aristotle’s beginning, middle, and end. Shakespeare’s setup, conflict, resolution. Joseph Campbell’s Hero’s Journey, challenge, change, return, which gave us Star Wars, Indiana Jones, and virtually every film that has ever moved an audience. Nancy Duarte’s Sparkline structure, moving between what is and what could be, which keeps audiences emotionally engaged and makes messages persuasive rather than merely informative.
These frameworks endure not because they are elegant but because they are neurologically effective. They match how the human brain processes meaning. Investment trust communications could use all of them. Almost none of them do.
The Investor Journey as a Story Arc
The investor journey maps directly onto a story arc in three acts.
At the awareness stage, Act 1, the investor notices a gap between where they are financially and where they want to be. Emotion drives curiosity at this stage. The right communications focus on motivations: security, freedom, legacy, the things investors actually want, not fund mechanics or structural explanation. Good awareness content opens a loop. Like Hemingway’s six-word story, it makes people want to know more. Most investment trust awareness content closes the loop before it opens, by leading with what the trust is rather than why it matters to the person reading.
At the consideration stage, Act 2, curiosity has been sparked and investors are evaluating and comparing. The three-act structure works directly here: challenge, struggle, outcome. It humanises data. People remember transformation more than they remember performance numbers. A trust that explains what it did during a market dislocation, what it held, what it reduced, and why, is telling a story. A trust that publishes the numbers without the narrative is not.
At the decision and advocacy stage, Act 3, Duarte’s Sparkline is the relevant tool. Moving between what is and what could be keeps attention alive and makes the message persuasive. The goal at this stage is not just for investors to believe the story. It is for them to retell it. The most powerful influence on investment decisions is still word of mouth. But word of mouth only happens when the story is simple and meaningful enough to retell. That is a test most investment trust communications currently fail.
The Board’s Role in Story Definition
Effective storytelling starts long before a campaign brief. It starts with the board defining the story.
That means answering three questions with genuine specificity. Who are we speaking to? Investors are not a single group. They vary by life stage, financial knowledge, motivation, and the specific gap they are trying to close. Younger investors, the cohort the sector most needs to reach, have the lowest awareness and the highest distance from the language currently being used. What do we want them to understand, remember, and share? Not the structure of the trust, but the purpose of the investment and the case for making it. And what is the clear, distinctive value proposition that makes this trust different from the 300 or so others on the shelf?
Without a distinctive value proposition, communications default to category language: global diversification, long-term growth, experienced management. Those phrases appear on every trust’s website. They create no recall, no preference, and no story worth retelling.
The board defines the story. The marketing function builds the consistency that turns that story into a memory structure across years, not just campaigns. And consistency, applied at scale and over time, is what creates the familiarity that drives trust, and trust is what drives inflows.
The Missing Lever
The investment trust sector has genuine structural advantages. Permanent capital, independent board oversight, the ability to hold illiquid assets, dividend reserves that allow income smoothing through difficult periods: these are real, meaningful differentiators that retail investors would value if they understood them.
The gap between what investment trusts are and what most of the retail market understands them to be is a communications problem. Not a product problem, not a performance problem, not a distribution problem in the narrow sense. A story problem.
Buybacks address the supply side. Marketing addresses the demand side. Both are necessary. Neither is sufficient alone. The trusts that combine deliberate demand creation with structural management of discounts will be the ones that build the broadest, most resilient investor base, the kind that holds through difficult periods, reinvests, and tells others.
Marketing is the missing lever. Storytelling is the oldest technology in marketing. The sector has been under-investing in both for a long time.
The window to act early and build advantage is still open. But it won’t stay open indefinitely.
This is the first in a series drawn from the Blueprint Sessions.
Session #2 takes the emotional case made here and grounds it in behavioural science: Why Investment Trust Marketing Is Aimed at the Wrong Brain.
Session #3 picks up the story once an investor is already looking: The Investor Journey Investment Trusts Are Getting Wrong.
And Session #4 picks up where this leaves off, on why distinctiveness and mental availability, not just a good story, are what make a trust recallable at the moment of choice: Attention Is the Investment Trust Sector’s Most Undervalued Asset.
The Blueprint Sessions bring together investment trust marketing and communications professionals to work through these questions properly.
If you’d like to be considered for an invitation to the next session, please contact us.
