Discount Delver: the 10 cheapest trusts on 11 October 2024
We reveal the biggest investment trust discount changes over the past week.
11th October 2024 10:14
by Kyle Caldwell from interactive investor
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).  Â
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.  Â
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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.  Â
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.Â
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The biggest mover over the past week was EJF Investments (LSE:EJFI). Its discount rose by nearly six percentage points to -30.5%. The trust’s investment objective is to generate attractive risk-adjusted returns by investing in opportunities created by regulatory and structural changes impacting the financial services sector.
Second in the table is Manchester & London (LSE:MNL), which is now trading on a -22.6% discount. This is a highly concentrated investment trust, with NVIDIA Corp (NASDAQ:NVDA) and Microsoft Corp (NASDAQ:MSFT) accounting for more than half its assets, with weightings of 33.9% and 25%.
In third place is UK smaller companies trust Miton UK Microcap (LSE:MINI), which has seen its discount rise by five percentage points to -11.2%. Also in the table is smaller companies’ peer Rights & Issues Investment Trust Ord (LSE:RIII).
Smaller companies have been staging a comeback over the past year, with the average trust up 19.8%. However, over three years returns remain lacklustre, with the average trust down -8%. The hope is that lower interest rates will help rejuvenate this part of the market.
However, as we explain in our latest On The Money podcast, some smaller companies could be negatively impacted if Budget speculation that AIM shares could lose their inheritance tax (IHT) break becomes reality. Â
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| EJF Investments (LSE:EJFI) | Debt - Structured Finance | -30.52 | -5.70 |
| Manchester & London (LSE:MNL) | Global | -22.60 | -5.60 |
| Miton UK Microcap (LSE:MINI) | UK Smaller Companies | -11.18 | -5.00 |
| Triple Point Energy Transition (LSE:TENT) | Renewable Energy Infrastructure | -26.04 | -3.80 |
| Rights & Issues Investment Trust (LSE:RIII) | UK Smaller Companies | -12.53 | -3.70 |
| Greencoat UK Wind (LSE:UKW) | Renewable Energy Infrastructure | -14.16 | -3.20 |
| Golden Prospect Precious Metal (LSE:GPM) | Commodities & Natural Resources | -21.04 | -3.00 |
| Pantheon Infrastructure (LSE:PINT) | Infrastructure | -18.78 | -2.90 |
| Lindsell Train (LSE:LTI) | Global | -22.93 | -2.80 |
| Tritax EuroBox Euro (LSE:BOXE) | Property - Europe | -12.95 | -2.70 |
Source: Morningstar. *Data from close of trading 3 October 2024 to close of trading 10 October 2024.
These articles are provided for information purposes only. Â Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. Â 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.