Discount Delver: the 10 cheapest trusts on 5 January 2024

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%. 

Source: Morningstar. *Data from close of trading 28 December 2023 to close of trading 4 January 2024.