Interactive Investor

Discount Delver: the 10 cheapest trusts on 2 February 2024

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

2nd February 2024 10:20

by Kyle Caldwell from interactive investor

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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 big news in the investment trust world this week was battery specialists Harmony Energy Income Trust (LSE:HEIT) and Gresham House Energy Storage (LSE:GRID) suspending dividends. For both, further cuts could be on the cards if the outlook does not improve amid a slump in UK revenues. The duo are now trading on discounts of over 60%.

Two other renewable energy infrastructure trusts feature in the table: Triple Point Energy Transition (LSE:TENT) and Atrato Onsite Energy (LSE:ROOF). This sector has been out of favour with investors due to the rise in yields for lower-risk assets – money market funds and bonds.

Also bear in mind that renewable energy infrastructure trusts are a mixed bag. Therefore, it is important that investors look under the bonnet and understand how each one invests. Some of these specialist trusts invest in a niche area, such as solar, wind, hydrogen, energy efficiency or energy storage. Others have a mix of renewable exposure, with some aiming to benefit both from when the wind blows and when the sun shines.   

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Harmony Energy Income Trust (LSE:HEIT)Renewable Energy Infrastructure-63.66-20.91
Gresham House Energy Storage (LSE:GRID)Renewable Energy Infrastructure-64.91-12.45
Residential Secure Income (LSE:RESI)Property - UK Residential-52.90-7.44
Molten Ventures (LSE:GROW)Growth Capital-69.64-6.22
Triple Point Energy Transition (LSE:TENT)Renewable Energy Infrastructure-35.41-5.83
Weiss Korea Opportunity (LSE:WKOF)Country Specialist-5.06-5.20
Atrato Onsite Energy (LSE:ROOF)Renewable Energy Infrastructure-19.68-5.07
Oakley Capital Investments (LSE:OCI)Private Equity-34.54-4.54
JPMorgan Global Core Real Assets (LSE:JARA)Flexible Investment-26.80-4.53
Schroders Capital Global Innovation Trust  (LSE:INOV)Growth Capital-43.03-4.46

Source: Morningstar. *Data from close of trading 25 January 2024 to close of trading 1 February 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.

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