Interactive Investor

Discount Delver: the 10 cheapest trusts on 10 May 2024

In a relatively quiet week for investment trust discounts, the largest move was just five percentage points.

10th May 2024 12:04

by Sam Benstead from interactive investor

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Investment trusts, due to their closed-ended structure, offer investors the chance of picking up a potential bargain. Such an opportunity arises when a trust’s share price is lower than the underlying investments held by the trust (the net asset value, or NAV).    

However, a trust trading on a discount to NAV is not necessarily a buying opportunity. There’s likely a good reason why the trust is cheap, such as subdued short- or long-term performance, or poor investor sentiment towards how it invests.    

In our weekly series, interactive investor highlights the 10 biggest investment trust discount moves over the past week. We publish this article every Friday, using data up to the close of trading the previous day.    

In total, nearly 400 investment trusts have been screened, with the data sourced from Morningstar. Venture Capital Trusts (VCTs) have been excluded. We also strip out trusts with less than £20 million in assets and those that are not available on the interactive investor platform. 

Rising stock markets around the world kept investment trust discounts in check, with the largest discount move just five percentage points. 

This was at Patria Private Equity Trust, which moved from a 25.5% to 30.5% discount. The £1.17 billion strategy invests in external private equity funds, such as those from CVC Capital Partners (EURONEXT:CVC) and Bridgepoint Group (LSE:BPT).  

Two smaller companies strategies made this week’s Discount Delver list: North Atlantic Smaller Companies and Strategic Equity Capital. The former invests globally and is on a -26.6% discount now, while the latter invests in UK companies and is now on a -9.7% discount.  

Another UK fund to feature was Chelverton UK Dividend Trust, an equity income fund whose discount widened about two percentage points this week. It has a very high yield of 8.4% and includes investments in Wickes, MTI Wireless Edge and Sabre Insurance.  

Two very specialist funds on the list are Geiger Counter, which owns uranium-linked companies, and Weiss Korea Opportunity, which invests in Korean companies. On discounts of -24.2% and -6.1%, they could appeal to bargain hunters, but are likely to be very volatile.  

Rounding off the Discount Delver this week were trusts in the hedge fund, growth capital, renewable energy and global equity income sectors. See the full list below.  

TrustSectorCurrent discount (%)Weekly discount change*(%)
Patria Private Equity Trust (LSE:PPET)Private Equity-30.6-5.0
Atrato Onsite Energy (LSE:ROOF)Renewable Energy Infrastructure-25.8-3.4
North Atlantic Smaller Cos (LSE:NAS)Global Smaller Companies-26.6-2.2
Third Point Investors (LSE:TPOU)Hedge Funds-18.6-2.2
Petershill Partners Ord (LSE:PHLL)Growth Capital-42.0-2.2
Weiss Korea Opportunity (LSE:WKOF)Country Specialist-6.1-1.8
Geiger Counter (LSE:GCL)Commodities & Natural Resources-24.2-1.7
Strategic Equity Capital (LSE:SEC)UK Smaller Companies-9.7-1.7
Chelverton UK Dividend Trust (LSE:SDV)UK Equity Income-8.0-1.7
Invesco Select Global Equity Income (LSE:IVPG)Global Equity Income-14.5-1.6

Source: Morningstar. *Data from close of trading 2 May 2024 to close of trading 9 May 2024.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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