Discount Delver: the 10 cheapest trusts on 4 July 2025

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.   

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In our weekly series, interactive investor highlights the 10 biggest investment trust discount moves over the past week.

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. 

One investment trust, ICG Longbow Senior Secured UK Property Debt Investments, saw its discount widen 26.4 percentage points this week, from a -14.3% discount to a -40.7% discount.

This trust invests in a portfolio of UK real estate debt investments, predominantly comprising loans backed by property, so if they default then they have a claim on the assets.  

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There were four other property-linked investment trusts on this week’s Discount Delver list: PRS REIT (UK residential property), Life Science Reit (UK commercial property), Target Healthcare REIT (UK healthcare property) and Aseana Properties (global property).

Discounts widened between two percentage points and five percentage points last week, likely linked to rising gilt yields.

Property portfolios do not like higher interest rates costs, as they often use lots of debt to fund purchases. They are also viewed as an alternative income play by investors, which have to compete with bonds. Therefore rising bond yields can make these assets less attractive.

The 30-year gilt yield rose from 5.2% to 5.4% on Wednesday, before falling back to around 5.3%. 10-year gilt yields jumped from 4.4% to 4.6%.  

The sell-off was caused by the Labour Party removing £5 billion of cuts to disability benefits, which puts their commitment to tight fiscal rules in doubt. It shows that the party is struggling to control its MPs and force them to back spending cuts. The party won its majority partly based on its commitment to being fiscally responsible, with Reeves seen as a safe pair of hands at the Treasury.  

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The rest of this week’s Discount Delver list was spread across a range of sectors. RM Infrastructure Income is a debt trust, yielding 7.5% and on a -16.2% discount. It lends money secured against company assets, real estate, plant and machinery and/or income streams such as accounts receivable.

Pantheon Infrastructure is on a -10.7% discount and invests in infrastructure. It yields 4%.

UIL, International Biotechnology and Weiss Korea Opportunity round off the list. They are on -35.5%, -11.9% and -6.4% discounts, which are about three percentage points wider than the week before.

Source: Source: Morningstar. *Data from close of trading 26 June 2025 to 3 July 2025.