Discount Delver: the 10 cheapest trusts on 21 April 2023
21st April 2023 11:16
by Sam Benstead from interactive investor
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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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Specialist investment trusts saw their discounts widen the most over the past week, with strategies investing in hydrogen power, Vietnam and supermarkets all featuring on the list.
HydrogenOne Capital Growth saw the biggest move, from a 40.2% discount to a 46.8% discount, as investors continued to sell shares in the trust, which owns a mix of listed and unlisted companies involved in hydrogen power. The trust launched in 2021 with shares trading at 100p, but now they change hands for around half that.
The next biggest discount moves came from private lender SLF Realisation Fund (5.9 percentage point discount increase); private equity trust Symphony International (5.8 percentage point discount increase); and HICL Infrastructure (4.6 percentage point discount increase).
HICL Infrastructure has traded at a 3% premium on average over the past 12 months, so its current 10% discount may be appealing to bargain hunters. It yields 5.6% and has more than £3 billion in investments.
VietNam Holding saw its discount rise from 13.5% to 18% over the past week, while Schiehallion Fund, the private equity trust from Baillie Gifford, saw its discount rise from 17.4% to 21.1%.
A number of real estate investment trust made the Discount Delver table. They were Balanced Commercial Property (4 percentage point move); Supermarket Income REIT (3.9 percentage point move); and Globalworth Real Estate Investments (4 percentage point move), while Invesco Select UK Equity rounded off the 10 biggest discount moves with a 3.6 percentage point change
Discount Delver: the 10 biggest discount moves over the past week
| Trust | Fund size (£million) | Sector | Current discount (%) | Discount change over the past week* |
|---|---|---|---|---|
| HydrogenOne Capital Growth | 127 | Renewable Energy Infrastructure | -46.77 | -6.58 |
| SLF Realisation Fund | 32 | Leasing | -42.87 | -5.92 |
| Symphony International Holding | 500 | Private Equity | -58.97 | -5.77 |
| HICL Infrastructure | 3,326 | Infrastructure | -10.01 | -4.55 |
| VietNam Holding | 87 | Country Specialist | -18.00 | -4.51 |
| Globalworth Real Estate Investments | 628 | Property - Europe | -62.22 | -4.05 |
| Balanced Commercial Property | 828 | Property - UK Commercial | -29.11 | -4.03 |
| Supermarket Income REIT | 1,125 | Property - UK Commercial | -12.86 | -3.91 |
| Schiehallion Fund | 545 | Growth Capital | -21.09 | -3.67 |
| Invesco Select UK Equity | 132 | UK Equity Income | -17.54 | -3.59 |
Source: Morningstar. *Data from close of trading 13 April 2023 to close of trading 20 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.