Interactive Investor

Discount Delver: the 10 cheapest trusts on 28 March 2024

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

28th March 2024 10:25

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. 

The trend this year of alternative asset investment trusts being out of favour continued this week, with renewable energy trusts seeing their discounts widen more than any other trust sector.  

Four of the 10 largest discount moves last week were renewables trusts. They were: US Solar Fund, Ecofin US Renewables Infrastructure, Asian Energy Impact Trust and Gore Street Energy Storage Fund. Discount moves were between four and seven percentage points, with the largest discount of this group currently on Asian Energy Impact Trust (53.1% discount) and the smallest on Ecofin US Renewables Infrastructure (36.8%). 

Premier Miton Global Renewables Trust, classified by the Association of Investment Companies (AIC) as an infrastructure trust, saw its discount move four percentage points.  

Last 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 theme stood out on this week’s Discount Delver list: UK Smaller Companies.  

Crystal Amber and River and Mercantile UK Micro Cap saw their discounts widen about five percentage points each, to 34.2% and 17.5%. 

Sensitive to the economy, the smaller companies sector is a volatile area that has been out of favour recently.  

The biggest discount move last week came from Seraphim Space Investment Trust, with an eight-point move to a 44.6% discount. Scottish Oriental Smaller Companies rounds off the list with a 4.6-point move.  

TrustAIC sectorCurrent discount (%)Change in discount* (percentage points)
Seraphim Space Investment Trust Growth Capital-44.6-8.2
US Solar Fund Renewable Energy Infrastructure-43.3-7.6
Schroder BSC Social Impact Trust Flexible Investment-24.8-6.3
Ecofin US Renewables Infrastructure Renewable Energy Infrastructure-36.8-5.3
Crystal Amber UK Smaller Companies-34.2-5.1
River and Mercantile UK Micro Cap UK Smaller Companies-17.5-5.0
Scottish Oriental Smaller Cos Asia Pacific Smaller Companies-17.6-4.6
Asian Energy Impact Trust Renewable Energy Infrastructure-53.1-4.1
Gore Street Energy Storage Fund Renewable Energy Infrastructure-44.1-4.0
Premier Miton Global Renewables Trust Infrastructure Securities-17.2-3.9

Source: Morningstar. *Data from close of trading 21 March 2024 to close of trading 27 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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