Discount Delver: the 10 cheapest trusts on 18 October 2024
We reveal the biggest investment trust discount changes over the past week.
18th October 2024 11:23
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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UK-focused investment trusts occupy the top three positions in this week’s table. Oryx International Growth (LSE:OIG) has seen its discount widen by over six percentage points to -26.7%, while BlackRock Income and Growth (LSE:BRIG) and CT UK High Income (LSE:CHI) have seen their discounts increase by nearly five percentage points to -17.1% and -9.3% respectively.
It is widely known that the UK market is trading on valuations that are lower than its historical averages, and in particular is much cheaper than the US. Data from Artemis, the fund manager, shows the US is trading on a forward price-to-earnings multiple of 21.6x compared to 11.7x for the UK.
However, and as noted recently by our columnist Ian Cowie, on the whole UK investment trusts are not notably cheap compared to other investment trust sectors.
The rest of the table is mainly dominated by specialist strategies that fall into the adventurous investing bucket. The two biggest discounts are private equity trust Symphony International Holding (LSE:SIHL) and Seraphim Space Investment Trust (LSE:SSIT), trading on discounts of -59.5% and -49.1%.
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Oryx International Growth (LSE:OIG) | UK Smaller Companies | -26.7 | -6.2 |
| BlackRock Income and Growth (LSE:BRIG) | UK Equity Income | -17.1 | -4.7 |
| CT UK High Income (LSE:CHI) | UK Equity Income | -9.3 | 4.5 |
| Seraphim Space Investment Trust (LSE:SSIT) | Growth Capital | -49.1 | -4.0 |
| Geiger Counter (LSE:GCL) | Commodities & Natural Resources | -24.8 | -3.7 |
| Aquila Energy Efficiency Trust (LSE:AEET) | Renewable Energy Infrastructure | -38.2 | -3.7 |
| Syncona(LSE:SYNC) | Biotechnology & Healthcare | -42.4 | -3.7 |
| Majedie Investments (LSE:MAJE) | Flexible Investment | -17.3 | -3.6 |
| Tufton Oceanic Assets (LSE:SHIP) | Leasing | -18.9 | -3.6 |
| Symphony International Holding (LSE:SIHL) | Private Equity | -59.5 | -3.4 |
Source: Morningstar. *Data from close of trading 10 October 2024 to close of trading 17 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.