Discount Delver: the 10 cheapest trusts on 5 January 2024
We reveal the biggest investment trust discount changes over the past week.
5th January 2024 10:19
by Kyle Caldwell from interactive investor
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. 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.
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It has been a low-key week for investment trust discounts, with the top 10 biggest movers edging up only three to four percentage points.
In some cases, there was potentially an element of profit taking, as a number of the investment trusts have seen their discounts slightly tick up following a strong run of share price performance since the end of November. Fuelling the rally has been rising expectations that the interest rate cycle has peaked, with cuts on the cards in 2024, and with the US expected to lead the way.
Leading the way since the start of November is Chrysalis Investments Limited (LSE:CHRY). The trust, which buys unlisted companies that may become tomorrow’s winners, is up 36.3% over the past two months. Over the past week, its discount widened by 4.2 percentage points.
Other trusts enjoying a purple parch over the same period are Warehouse REIT (LSE:WHR), Scottish Mortgage (LSE:SMT), Tritax Big Box (LSE:BBOX) and Urban Logistics REIT (LSE:SHED), with respective gains of 27%, 24.7%, 20.9% and 18.4%.
The only trust in the table not to make a positive return since the start of November is life science specialist Syncona (LSE:SYNC), down 4.4%.
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Chrysalis Investments (LSE:CHRY) | Growth Capital | -46.68 | -4.16 |
| BBGI Global Infrastructure (LSE:BBGI) | Infrastructure | -7.97 | -4.15 |
| SDCL Energy Efficiency Income (LSE:SEIT) | Renewable Energy Infrastructure | -31.52 | -3.54 |
| Warehouse REIT (LSE:WHR) | Property - UK Logistics | -29.78 | 3.50 |
| AEW UK REIT (LSE:AEWU) | Property - UK Commercial | -3.97 | -3.25 |
| River and Mercantile UK Micro Cap (LSE:RMMC) | UK Smaller Companies | -19.62 | -3.19 |
| Syncona (LSE:SYNC) | Biotechnology & Healthcare | -33.03 | -3.14 |
| Urban Logistics REIT (LSE:SHED) | Property - UK Logistics | -23.02 | -3.04 |
| Scottish Mortgage (LSE:SMT) | Global | -10.38 | -2.98 |
| Tritax Big Box (LSE:BBOX) | Property - UK Logistics | -14.96 | -2.79 |
Source: Morningstar. *Data from close of trading 28 December 2023 to close of trading 4 January 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.