Interactive Investor

Discount Delver: the 10 cheapest trusts on 17 May 2024

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

17th May 2024 10:30

by Kyle Caldwell from interactive investor

Share on

Giant per cent sign 600

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. 

Alternative income offerings and adventurous strategies dominate the biggest investment trust discount movers over the past week.

Topping the table is Aquila Energy Efficiency Trust (LSE:AEET), which is in the process of returning capital to shareholders after losing a continuation vote last February. Earlier this week, around a fifth of its assets were returned to investors through an oversubscribed tender offer.

Second in the table is Chrysalis Investments Limited (LSE:CHRY), which buys fledgling companies that might make it big. Its share price fell significantly yesterday, down 16%, on the back of a story on Sky News suggesting that one its main holdings – wefox –  is in financial trouble. The report said that wefox, Europe’s largest digital insurance platform, “could become insolvent by the summer unless it can secure the sale of a number of its loss-making operations.Wefox represents 14.4% of Chrysalis Investments. The investment trust reduced its valuation of wefox earlier this month by around a third.

In response to the news story Chrysalis Investments said in a stock exchange statement this morning: “The investment adviser has been in discussions with wefox management and other shareholders for a number of months. A plan has been put in place to simplify wefox's business model to drive the company towards profitability. Following these conversations, the Investment Adviser believes there is a route to ensuring a successful outcome for wefox and Chrysalis's investment.

“In recent weeks, wefox has raised approximately €20million from shareholders, to which the company contributed €3million in support of the aforementioned strategy; the investment adviser continues to consider how best to support wefox achieve its ambitions and is confident of continued shareholder support for the company, if required.”

Third in the table is Syncona (LSE:SYNC). The life sciences investment trust has been a lacklustre performer over multiple time periods, down 28.4%, 48.7% and 55.7% over one, three and five years. Its discount now stands at 41.5%.

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Aquila Energy Efficiency Trust (LSE:AEET)Renewable Energy Infrastructure-37.16-7.69
Chrysalis Investments Limited (LSE:CHRY)Growth Capital-47.58-7.19
Syncona (LSE:SYNC)Biotechnology & Healthcare-41.45-5.95
India Capital Growth (LSE:IGC)India/Indian Subcontinent-6.27-4.71
ICG-Longbow Senior Sec. UK Prop Debt Inv (LSE:LBOW)Property - Debt-33.28-4.70
Pacific Horizon (LSE:PHI)Asia Pacific-8.58-3.61
BBGI Global Infrastructure (LSE:BBGI)Infrastructure-6.42-3.24
abrdn New India Investment Trust (LSE:ANII)India/Indian Subcontinent-17.16-3.13
Intuitive Investments Group (LSE:IIG)Biotechnology & Healthcare-3.60-3.06
Invesco Perpetual UK Smaller (LSE:IPU)UK Smaller Companies-16.31-2.87

Source: Morningstar. *Data from close of trading 9 May 2024 to close of trading 16 May 2024.

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.

Get more news and expert articles direct to your inbox