Interactive Investor

Discount Delver: the 10 cheapest trusts on 22 March 2024

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

22nd March 2024 10:27

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. 

Alternative asset investment trusts continue to be out of favour. This is reflected in six renewable energy infrastructure trusts appearing in our table showing the biggest discount changes over the past week. The top three saw their discounts increase by more than six percentage points: Octopus Renewables Infrastructure (LSE:ORIT), Asian Energy Impact Trust (LSE:AEIT) and Gresham House Energy Storage (LSE:GRID).

This week’s On The Money podcast focused on alternative asset trusts. In the podcast, we explained why this trust type has been out of favour, and considered whether there are now opportunities for investors, or whether the big discounts on offer are a potential value trap.

Another unloved” area is the UK stock market, which has led to some UK equity investment trusts trading on wider-than-usual discounts. Entering the table this week is abrdn Equity Income Trust (LSE:AEI), which is trading on an -11.35% discount versus a 12-month average discount of -1.0%. The trust has a high yield, currently over 8%, and is a dividend hero having increased its payouts for 23 consecutive years.

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Octopus Renewables Infrastructure (LSE:ORIT)Renewable Energy Infrastructure-31.22-6.78
Asian Energy Impact Trust (LSE:AEIT)Renewable Energy Infrastructure-51.00-6.18
Gresham House Energy Storage (LSE:GRID)Renewable Energy Infrastructure-68.69-6.15
HydrogenOne Capital Growth (LSE:HGEN)Renewable Energy Infrastructure-59.41-5.58
Greencoat Renewables (LSE:GRP)Renewable Energy Infrastructure-23.25-5.10
Livermore Investments (LSE:LIV)Flexible Investment-52.95-4.82
UIL (LSE:UTL)Flexible Investment-43.97-4.29
abrdn Equity Income Trust (LSE:AEI)UK Equity Income-11.35-4.26
abrdn Property Income Trust (LSE:API)Property - UK Commercial-37.81-4.12
VH Glob Sustainable Energy Opportunities (LSE:GSEO)Renewable Energy Infrastructure-42.25-4.01

Source: Morningstar. *Data from close of trading 14 March 2024 to close of trading 21 March 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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