Discount Delver: the 10 cheapest trusts on 14 April 2023
14th April 2023 10:47
by Sam Benstead from interactive investor
We reveal the biggest investment trust discount changes over the past week.
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.
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.
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In a relatively quiet week for markets following the long Easter weekend, no investment trust discount widened more than five percentage points.
The greatest change came from uranium exploration and production stock investor Geiger Counter, which moved from a 0.8% discount to 5.5% discount.
Livermore Investments, a £100 million trust that invests in the bond market, saw its discount increase from 34.5% to 38.7%.
Better-known trusts in the Discount Delver this week include Lowland, which now trades on a 9.8% discount. Managed by investment group Janus Henderson, its overweight to the financials sector has cost it this year, following issues for smaller US banks and Credit Suisse (SIX:CSGN) in Europe.
Another popular trust on the list is Lindsell Train Investment Trust, which owns a large stake in the popular fund manager Lindsell Train, alongside “quality growth” shares that fund manager Nick Train likes. It now trades on a 5.2% discount, compared with an average premium of 6% over the past 12 months.
Impax Environmental Markets, a sustainable investment trust on interactive investor’s ACE 40 investments ideas list, saw its discount rise to 2%, from trading around par a week ago.
Other trusts making the top 10 list were: CT UK High Income (2.7 percentage point discount change); Schroder BSC Social Impact Trust (2.4 percentage point discount); Chrysalis Investments; Jupiter Green; and Weiss Korea Opportunity all saw their discount widen by around 2 percentage points.
Discount Delver: the 10 biggest discount moves over the past week
| Trust | Sector | Current discount/premium (%) | Discount/premium change over past week* (%) |
|---|---|---|---|
| Geiger Counter | Commodities & Natural Resources | -5.5 | -4.7 |
| Livermore Investments | Flexible Investment | -38.7 | -4.3 |
| Lowland | UK Equity Income | -9.8 | -3.8 |
| Lindsell Train | Global | -5.2 | -3.3 |
| CT UK High Income | UK Equity Income | -11.6 | -2.7 |
| Schroder BSC Social Impact Trust | Flexible Investment | -11.3 | -2.4 |
| Impax Environmental Markets | Environmental | -2.2 | -2.2 |
| Chrysalis Investments Limited | Growth Capital | -55.6 | -2.0 |
| Jupiter Green | Environmental | -11.7 | -2.0 |
| Weiss Korea Opportunity | Country Specialist | -3.7 | -1.8 |
Source: Morningstar. *Data from close of trading 6 April 2023 to close of trading 13 April 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.