Interactive Investor

Discount Delver: the 10 cheapest trusts on 28 June 2024

Two well-known technology trusts could be appealing to bargain hunters, writes Sam Benstead.

28th June 2024 09:56

by Sam Benstead from interactive investor

Share on

Discount Delver thumbnail

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. 

Despite the strong returns from technology shares this year, two of the best-known investment trusts investing in the sector are trading at -10% discounts. 

Allianz Technology Trust (LSE:ATT) saw its discount move from -5.5% to -9.9% last week, and Polar Capital Technology (LSE:PCT) moved from a -5.6% discount to a -9.8% discount.  

The trusts are performing very well this year, with their share prices up more than 30%. Nevertheless, they trade on discounts, even though they only invest in listed companies.  

This may appeal to bargain seekers looking to own artificial intelligence winners, such as Microsoft and Alphabet, without paying full price.  

PCT is the larger of the trusts, with £4.3 billion in invested assets, while ATT has nearly £1.7 billion. Performance has been similar, with both trusts returning about 150% over the past five years.  

Another technology investor on this week’s Discount Delver list is Manchester & London, which is now on a -16.6% discount. It runs a much more concentrated portfolio than PCT and ATT, with about one-third of its assets invested in semiconductor company Nvidia (NASDAQ:NVDA).  

The final technology focused trust seeing a big widening of its discount was Molten Ventures, moving to a -48% discount. It owns unlisted technology firms, which gives investors a different set of companies to trusts like PCT and ATT, but often with more volatility.  

Also investing in private companies is CT Private Equity Trust, where the discount moved to -37.7% last week. Private company valuations are set by the investment trust, with the help of consultants, but these valuations may not accurately reflect their true if they were to be listed on an exchange.  

Regional REIT registered the biggest discount move last week, from -65% to -73.6%. Other trusts featuring on this week’s Discount Delver list were Lindsell Train, abrdn European Logistics Income, Rights & Issues and Oryx International Growth.  

Trust SectorCurrent discount (%)Change in discount* (%)
Regional REIT Property - UK Commercial-73.78.6
Molten Ventures Growth Capital-48.06.2
Allianz Technology Trust Technology & Technology Innovation-9.94.4
Manchester & London Global-16.64.2
CT Private Equity Trust Private Equity-37.84.2
Lindsell Train Global-18.44.2
Polar Capital Technology Technology & Technology Innovation-9.84.1
abrdn European Logistics Income Property - Europe-24.54.0
Rights & Issues Investment Trust UK Smaller Companies-13.83.9
Oryx International Growth UK Smaller Companies-32.23.8

Source: Morningstar. *Data from close of trading 20 June 2024 to close of trading 27 June 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.

Related Categories

    Investment TrustsNorth AmericaEurope

Get more news and expert articles direct to your inbox