Discount Delver: the 10 cheapest trusts on 5 September 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. 

A trio of investment trusts that specialise in renewable energy infrastructure make this week’s table: Aquila European Renewables Ord (LSE:AERI), Gore Street Energy Storage Fund (LSE:GSF) and Gresham House Energy Storage (LSE:GRID).

The sector has big discounts, with the sector average standing at -29.1%. On the whole, the sector’s out of favour, although some interactive investor customers have been eyeing opportunities, with Greencoat UK Wind (LSE:UKW) and NextEnergy Solar Fund (LSE:NESF) ranked first and seventh among our top 10 most-popular trusts in August.  

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Interest rates rising at the end of December 2021, from rock-bottom levels of 0.25% to a peak of 5.25% in summer 2023, impacted investment trusts aiming to generate an income from alternative assets. This is because investors could procure a decent level of income from lower-risk areas as bond yields rose in response to rate rises.

When interest rates reached 5.25%, investors could pocket an income of around that amount via money market funds. While renewable energy infrastructure investment trusts offered higher yields, many investors took the view that the extra income on offer was not sufficiently rewarding enough to take on extra risk.

As investors retreated from the sector, the average trust moved from an average 7.2% premium at the end of 2021 to the current deep discounts.

However, now that interest rates are declining - currently at 4% with further falls expected in the coming months - some investors think the gap between low-risk bonds and the yields on offer from renewable energy trusts is now large enough. The sector average yield is 9.9%.

Source: Morningstar. *Data from close of trading 28 August 2025 to 4 September 2025.