The Association of Investment Companies (AIC) said investment trusts have reported a record year for share buybacks, with £3.57 billion of shares repurchased in the year to date.

That’s a 32% increase on the £2.7 billion of share buybacks during the whole of 2022, according to statistics from Winterflood and Morningstar.

There has been an additional £637 million of shares repurchased through tender offers and redemptions, making £4.2 billion in total so far in 2023.

The AIC said a total of £6.32 billion was paid out by investment companies — mostly investment trusts — in dividends during the first 11 months of the year, compared to £5.55 billion for the same period of 2022, an increase of 14%.

Industry assets were £260 billion at the end of November, slightly down from £265 billion at the beginning of the year.

The AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC has 341 members.

The AIC said this year has seen four mergers between investment companies, eight liquidations and eight investment companies change managers “as boards responded to difficult market conditions and deep discounts.”

“There will be nine manager changes in total following the appointment of Asset Value Investors to manage MIGO Opportunities on 15 December – the largest number of manager changes in a year since 2009,” said the AIC.

“The discount of the average investment company has remained in double figures through the whole of 2023, the only year this has happened since the financial crisis.

“The average investment company discount started the year at 11.7% and hit a post-2008 trough of 16.9% at the end of October before recovering to 11.1%.

“Twenty-six investment companies changed their fees during the year to benefit shareholders.”

AIC CEO Richard Stone said: “Investment company boards have worked hard this year to deliver value to shareholders in challenging market conditions.

“For some, this has meant buying back shares, while others have taken the more radical steps of changing manager, merging with another investment company or even winding up the company.

“Discounts on investment companies were historically wide this year and that has increased the attraction of share buybacks.

“Towards the end of the year we have seen discounts narrow as investors begin to believe that interest rates have peaked and could be heading downwards in the not too distant future.”