Interactive Investor

Discount Delver: the 10 cheapest trusts on 3 November 2023

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

3rd November 2023 10:16

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.

In common with last week’s table, a wide variety of sectors feature among the biggest discount movers.

The biggest discount change was Middlefield Canadian Income (LSE:MCT), which moved from -14.5% to -20.9%. As its names suggests, this country specialist invests in the Canadian equity market, with a particular focus on the property market. It aims for a high level of dividends, and currently yields 5.6%.

Second and third in this week’s table are Jupiter Green (LSE:JGC) and Seraphim Space Investment Trust (LSE:SSIT). The former invests in companies which have a significant focus on environmental solutions, while the latter invests in early and growth-stage space tech businesses. Both invest globally.

Elsewhere, renewable energy infrastructure strategies remain out of favour, with US Solar Fund (LSE:USF) and NextEnergy Solar (LSE:NESF), both featuring in this week’s table.

Interest rate rises have triggered a re-pricing of risk assets due to the fact that investors can, for the first time in more than a decade, obtain a decent level of income on low-risk assets such as cash and bondsWith yields of 4% and 5% available on cash and relatively low-risk bonds, there’s less appeal in trying to obtain bigger returns for a higher amount of risk. As a result, discounts on investment trusts investing in alternative assets have been rising throughout 2023.

Investment trust Sector Current discount (%)Discount/premium change over past week* (%)
Middlefield Canadian Income (LSE:MCT)North America-20.89-6.40
Jupiter Green (LSE:JGC)Environmental-16.05-5.70
Seraphim Space Investment Trust (LSE:SSIT)Growth Capital-67.49-5.10
Artemis Alpha Trust (LSE:ATS)UK All Companies-20.69-4.40
US Solar Fund (LSE:USF)Renewable Energy Infrastructure-38.17-4.20
CT Global Managed Portfolio Income (LSE:CMPI)Flexible Investment-4.59-4.10
AVI Japan Opportunity (LSE:AJOT)Japanese Smaller Companies-6.00-3.80
NextEnergy Solar (LSE:NESF)Renewable Energy Infrastructure-28.23-3.80
ICG-Longbow Senior Sec. UK Prop Debt Inv (LSE:LBOW)Property - Debt-46.68-3.70
Alpha Real Trust (LSE:ARTL)Property - Debt-44.35-3.50

Source: Morningstar. *Data from close of trading 26 October 2023 to close of trading 2 November 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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