Interactive Investor

Discount Delver: the 10 cheapest trusts on 27 October 2023

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

27th October 2023 10:43

by Sam Benstead 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. 

A diverse range of investment trust sectors made up this week’s Discount Delver list, as global and UK stocks fell slightly in value.  

The most dramatic discount move was from HydrogenOne Capital Growth, which moved from a 44.1% discount to a 53.6% discount. The trust buys listed and unlisted companies involved in the emerging field of hydrogen power. It was a bad week generally for technology shares due to disappointing results from Meta (formerly Facebook) and Alphabet (Google’s owner), with the Nasdaq 100 index dropping about 2% in sterling terms. 

The next largest move was at Residential Secure Income, which registered a 6.8 percentage point discount move, followed by Dunedin Enterprise, with a 5.7 point move.  

Another growth-focused trust moving to an even wider discount this week was Augmentum Fintech, which now sits on a 48% discount to net asset value. Other big discounts available on this week’s Discount Delver list include International Public Partnerships (25% discount); Gore Street Energy Storage Fund (43.7% discount); and Miton UK Microcap (12.4% discount). 

Rounding off the list were CT UK High Income, International Biotechnology, and Doric Nimrod Air Two.  

TrustAssociation of Investment Companies (AIC) SectorCurrent discount (%)Change in discount (percentage point)*
HydrogenOne Capital Growth Renewable Energy Infrastructure-53.57-9.48
Residential Secure IncomeProperty - UK Residential-47.26-6.83
Dunedin Enterprise Private Equity-19.61-5.65
CT UK High Income UK Equity Income-9.12-4.77
Augmentum FintechFinancials & Financial Innovation-48.08-4.72
International BiotechnologyBiotechnology & Healthcare-7.85-4.62
International Public Partnerships Infrastructure-25.00-4.50
Miton UK Microcap UK Smaller Companies-12.39-4.48
Gore Street Energy Storage FundRenewable Energy Infrastructure-43.66-4.46
Doric Nimrod Air TwoLeasing-3.95-4.34

Source: Morningstar. *Data from close of trading 17 October 2023 to close of trading 26 October 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.

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