Interactive Investor

Discount Delver: the 10 cheapest trusts on 26 April 2024

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

26th April 2024 11:00

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 income investment trusts remain out of favour among investors. This is due to interest rate rises, which have caused bond yields to rise. As a result, investors have been favouring bonds, due to the asset class being lower risk.

Asian Energy Impact Trust (LSE:AEIT) tops the table this week, having seen its discount widen by over nine percentage points to -60.4%. It is joined by Atrato Onsite Energy (LSE:ROOF), which is now on a discount of -20.9%.

Two debt-focused trusts also feature. The discounts, however, hugely differ. M&G Credit Income Investment (LSE:MGCI) was trading close to the value of its assets, but is now on a discount of -5.4%. Whereas, VPC Specialty Lending Investments (LSE:VSL) is on a much bigger discount of -37%. There are various debt strategies, so it is important for investors to look under the bonnet of investment trusts in this area to get to grips with the types of borrowers the trust focuses on.

CT UK High Income (LSE:CHI), VietNam Holding Ord (LSE:VNH) and Strategic Equity Capital (LSE:SEC) have been trading on small discounts, but have seen their respective discounts increase over the past week to -9.4%, -5.5% and -9.8%.  

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Asian Energy Impact Trust (LSE:AEIT)Renewable Energy Infrastructure-60.37-9.19
CT UK High Income (LSE:CHI)UK Equity Income-9.39-4.43
Golden Prospect Precious Metal (LSE:GPM)Commodities & Natural Resources-23.60-4.30
VietNam Holding (LSE:VNH)Country Specialist-5.51-4.21
Strategic Equity Capital (LSE:SEC)UK Smaller Companies-9.80-4.10
M&G Credit Income Investment (LSE:MGCI)Debt - Loans & Bonds-5.38-3.67
Invesco Select Global Equity Income (LSE:IVPG)Global Equity Income-13.42-3.57
Schroder British Opportunities (LSE:SBO)Growth Capital-32.86-3.52
VPC Specialty Lending Investments (LSE:VSL)Debt - Direct Lending-36.95-3.41
Atrato Onsite Energy (LSE:ROOF)Renewable Energy Infrastructure-20.89-3.11

Source: Morningstar. *Data from close of trading 18 April 2024 to close of trading 25 April 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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