Interactive Investor

Discount Delver: the 10 cheapest trusts on 11 August 2023

We reveal the biggest investment trust discount changes over the past week.

11th August 2023 11:09

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. 

A calm summer week for stocks markets meant that investment trust discount moves were also relatively subdued.  

Renewable energy trusts saw big discount moves, with four trusts in the sector making the top 10 list. 

They were Greencoat Renewables (5.5 percentage point move), Atrato Onsite Energy (5.15 percentage point move), Octopus Renewables Infrastructure (3.05 percentage point move) and Downing Renewables & Infrastructure (2.65 percentage point move).  

Renewable energy trusts have been under pressure due to rising interest rates, with bonds now offering an alternative to the income that green energy funds pay shareholders.  

The biggest discount move this week was Golden Prospect Precious Metal , a £29.5 million trust that invests in mining companies. It now sits on a 23.8% discount.  

An interesting entry to the list was the Super-60 rated Fidelity China Special Situations, which saw its discount move 2.63 percentage points to 9.2%. Chinese shares took a hammering this week due to an announcement from the US government saying it would ban US investments in the Chinese tech sector. The trust’s shares are down 6% over the week. 

Other trusts on the list include Barings Emerging EMEA Opportunities, North Atlantic Smaller Cos, Volta Finance and Baker Steel Resources.  

TrustFund size (£)SectorCurrent discountChange in discount*
Golden Prospect Precious Metal 29,467,404.00Commodities & Natural Resources-23.83-5.51
Greencoat Renewables1,280,915,171.00Renewable Energy Infrastructure-12.24-5.15
Atrato Onsite Energy 138,855,000.00Renewable Energy Infrastructure-19.03-3.53
Barings Emerging EMEA Opportunities74,795,134.00Global Emerging Markets-20.85-3.51
North Atlantic Smaller Cos 680,983,741.00Global Smaller Companies-26.61-3.38
Octopus Renewables Infrastructure600,066,028.00Renewable Energy Infrastructure-15.45-3.05
Volta Finance229,383,708.00Debt - Structured Finance-18.36-3.01
Downing Renewables & Infrastructure212,098,317.00Renewable Energy Infrastructure-26.03-2.65
Fidelity China Special1,194,664,944.00China/Greater China-9.21-2.63
Baker Steel Resources71,116,951Commodities & Natural Resources-44.61-2.56

Source: Morningstar. *Data from close of trading 3 August 2023 to close of trading 10 August 2023.

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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