Discount Delver: the 10 cheapest trusts on 12 April 2024

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.    

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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.    

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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.  

Technology-focused investment trusts saw their discounts widen this week, with popular names such as Scottish Mortgage, Baillie Gifford US Growth and Allianz Technology Trust making the latest Discount Delver list. 

Scottish Mortgage, the giant growth trust from Baillie Gifford, saw its discount move from 4.6% to 10.4% over a week. Its 12-month average discount is 11.8%. The move follows a number of months of a narrowing discount, sparked by a pledge to buy back £1 billion of its own shares over the next two years. However, doubts remain over the valuation of its private portfolio. Worth about 30% of the fund, it includes names such as SpaceX and TikTok-owner ByteDance.  

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Baillie Gifford US Growth employs a similar investment approach – its discount had been narrowing but increased over the past week, from 9.7% to 14%. 

Similarly, Allianz Technology Trust saw its discount move, from 9.3% to 12.7%. Unlike Baillie Gifford US Growth and Scottish Mortgage, it does not own private companies.  

However, the biggest discount move came from Downing Strategic Micro-Cap, which saw its discount move from 7.3% to 53.7%. The trust is being wound up, so the assets are being sold, explaining the changes to the net asset value.  

A range of investment trust sectors were represented in the rest of the list. They included biotech, with Eurocastle Investment moving to a 34.4% discount, renewable energy, with SDCL Energy Efficiency Income moving to 38.8% discount, and commodities via uranium investor Geiger Counter, now on a 25.8% discount, and Golden Prospect Precious Metal, on an 18.3% discount.  

Eurocastle Investment and Gulf Investment Fund were the final names on the list, both discounts widening around four percentage points.

Source: Morningstar. *Data from close of trading 4 April 2024 to close of trading 11 April 2024.