Investment trusts can deliver large returns while allowing investors to effectively diversify. But times have been tough for these companies more recently.

Victoria Hasler, head of fund research at Hargreaves Lansdown, notes that

Rising interest rates have led to their income streams looking less attractive than they once did, rising discount rates have impacted asset valuations, and active managers have struggled in markets led by a few big stocks.

She also notes that “over the last couple of years we have seen some good quality investment trusts trading on hefty discounts“. This remains the case as we head into the New Year.

So I’m searching for the best value trusts to consider today. Here are two of my favourites.

Octopus Renewables Infrastructure Trust

Donald Trump’s return to the presidency has sent a shockwave across renewable energy stocks. Even companies with little-to-no exposure to the US have slumped following November’s election.

This provides a terrific dip buying opportunity in my opinion. One such business that’s caught my attention is Octopus Renewables Infrastructure Trust (LSE:ORIT).

At 63.5p per share, it trades at a huge 38.7% discount to its estimated net asset value (NAV) per share of 103.6p.

Recent share price weakness has also turbocharged Octopus’ dividend yield to 9.5%. To put this in context, the average for FTSE 100 shares is way back at 3.6%.

I like this trust because of the excellent diversification it offers. It generates power from offshore and onshore wind turbines as well as from solar farms. This allows consistent power generation across all seasons, and boosts efficiency by using technologies that are tailored to different environments.

With assets across the British Isles, Finland, Germany, and France, it can also remain profitable despite poor weather or regulatory issues in one or two regions.

Importantly, it also has no exposure to the US, removing uncertainty over the future of green policies under President-elect Trump.

Such fears — however impractical — may continue to weigh on Octopus’ share price. But over the long term I think it could prove a robust investment.

Gore Street Energy Storage Fund

The Gore Street Energy Storage Fund (LSE:GSF) shares several characteristics with the Octopus trust.

Its share price has declined due to falling confidence in renewable energy. This is because demand for its technologies are tied to growth in the renewables sector, where they provide a stable flow of energy even during unfavourable weather.

Gore Street is also vulnerable to higher interest rates that dampen asset values and increase borrowing costs.

But like Octopus, it also offers excellent value I find hard to ignore. At 50.6p per share, the trust trades at an 49.7% discount to its NAV per share of 100.7p.

Meanwhile, its forward dividend yield is a staggering 13.9%.

This is another share with considerable long-term potential as the world switches away from fossil fuels. Bloomberg estimates the global energy storage market will experience an annual growth rate of 21% between now and 2030.

And Gore Street is rapidly expanding to supercharge long-term revenues. Operational capacity leapt 45% in the 12 months to September, to 421.4 MW.