Image source: Getty Images
Investing money in exchange-traded funds (ETFs) and investment trusts can be a great way to target long-term wealth. With these products, SIPP investors can target enormous returns while also diversifying their capital to reduce risk.
Here are a couple of top funds and trusts I think warrant close attention this month.
BlackRock Smaller Companies Trust
Investors seem to be shifting from US equities into UK shares in growing numbers, prompted by the turbulent political backdrop in Washington and concerns over elevated stock valuations.
But rather than only investing in the FTSE 100 or FTSE 250, one idea could be to grab exposure to British small-cap shares. Analysts at Hargreaves Lansdown note that smaller companies are enjoying “undemanding valuations, [meaning] there’s an opportunity for investors to add excellent long-term growth potential to their portfolios.”
Investing in smaller firms involves greater risk. These businesses don’t enjoy the market-leading positions and strong balance sheets of many larger companies, and they can be especially vulnerable during economic downturns. But the BlackRock Smaller Companies Trust (LSE:BRSC) helps investors to reduce such risks.
This pooled investment vehicle has holdings in 100 companies that span a variety of sectors. Among its largest holdings are infrastructure products manufacturer Hill and Smith, and telecoms services provider Gamma Communications.
Smaller companies can have better long-term growth potential than larger-caps, which can result in supersized performance. Indeed, Hargreaves Lansdown also notes that over the last five years, the FTSE Small Cap ex IT index has delivered a return of 78.33%, ahead of the 72.94% and 41.74% returns delivered by the FTSE 100 index and FTSE 250 ex IT index, respectively.
The excellent value offered by BlackRock Smaller Companies Trust suggests this may be an especially attractive way to consider gaining exposure too. The trust trades at a whopping 12.5% discount to its net asset value (NAV) per share.
iShares Physical Gold
Holding safe-haven gold in a portfolio offers insurance against economic and political shocks. I think now especially could be a good time to consider gaining exposure through an ETF like iShares Physical Gold (LSE:SGLN).
Gold’s hit repeated highs over the last few years, and in 2025 it’s risen around 18% so far. I’m backing it to continue rising as interest rates fall, trade tensions likely persist, the US dollar depreciates and geopolitical instability increases.
I think iShares Physical Gold could be an attractive fund to consider for especially risk-averse SIPP investors. It allows individuals to capitalise on gold price movements without having to buy gold stocks. Therefore, it provides protection from exploration and production problems that can be commonplace in the mining industry.
At the same time, ETFs like this are more convenient than buying and then holding physical gold. Indeed, this particular bullion-backed fund enjoys especially strong liquidity, making it easier and potentially more cost effective to buy and sell.
There’s no guarantee that gold prices will retain their upward momentum. Renewed market confidence could instead prompt a mass selling of the yellow metal as investors seek out riskier assets.
Yet on balance, I still believe gold ETFs like this one are worth serious consideration in the current climate.
