Interactive Investor

Discount Delver: the 10 cheapest trusts on 17 February 2023

17th February 2023 11:28

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. 

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. 

The biggest discount move over the past week came from HydrogenOne Capital Growth, a trust with £130 million of assets that buys companies, listed and unlisted, involved in hydrogen as a power source. Its discount rose 5 percentage points, from 19.5% to 24.5%.  

Other big movers were GCP Asset Backed Income (4.5 percent point move); abrdn Latin American Income (3.8 percent point move); and Foresight Sustainable Forestry (3.8 percent point move). 

Baillie Gifford’s all-private growth stocks trust Schiehallion Fund was back on the Discount Delver list after dropping off it last week. Its discount rose from 23% to 27%. 

Chrysalis Investments, another private stocks trust, made it two weeks in a row on Discount Delver, as investors continued to sell trusts that invest in speculative private companies. Investors are sceptical of the valuations set by investment trusts for unlisted shares, as their published valuations have fallen less than stock-market listed companies.   

Completing the Discount Delver list this week were International Public Partnerships, Mobius Investment Trust, International Biotechnology and HICL Infrastructure.  

TrustChange in discount* (percentage points)Current discount (%))
HydrogenOne Capital Growth-4.98-24.46
GCP Asset Backed Income-4.47-21.81
abrdn Latin American Income-3.85-9.72
Foresight Sustainable Forestry-3.81-0.95
Schiehallion Fund-3.75-27.10
Chrysalis Investments Limited-3.66-46.75
International Public Partnerships-3.51-4.50
Mobius Investment Trust-2.99-0.80
International Biotechnology-2.97-4.42
HICL Infrastructure-2.88-2.77

Source: Morningstar. *Data from close of trading 9 February 2023 to close of trading 16 February 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.