Financial traders - instruments and shares: pension funds and other types of fund
There is a strong presumption that a pension fund is an investment, not a trading vehicle. This is not to say that pension funds cannot undertake activities which amount to a trade. If such an activity is clearly trading, the status of the pension fund cannot change that. But if the position is unclear, it will be necessary to investigate the purpose of the transaction to see if it was a trading one or part of the investment activities.
The latter point was considered in the case of Clarke v Trustees of British Telecom Pension Scheme & Others  72TC472. The point at issue was whether commissions from sub-underwriting activities carried on by the trustees came from a separate trade. In that case it was held that they did not, because there was no intention to trade and the sub-underwriting was carried out in relation to the shareholding policy pursued by the trustees in the course of the investing activities. Thus, even though the sub-underwriting was not essential to the holding of shares, and involved different parties, it was still integrated with, and took colour from, the investing transactions.
Other types of fund
It is a question of fact whether such funds are trading or investing. As with companies and individuals, you look at all the relevant circumstances before coming to a decision. The badges of trade have limited value (see BIM56840), and the use of derivative instruments (see BIM56890) or the adoption of particular strategies (see BIM56920), are not, by themselves, decisive either, although of course they are likely to be relevant circumstances to be considered.
General guidance on funds based in the UK is in the Company Taxation Manual (CTM) and those based overseas in the Offshore Funds Manual (OFM) (available via the Collective Investment Schemes Centre page on the HMRC internet).
For offshore funds which are trading, the Investment Manager Exemption may be relevant - see INTM269000+.