Discount Delver: the 10 cheapest trusts on 7 June 2024
We reveal the biggest investment trust discount changes over the past week.
7th June 2024 12:36
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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There were no big discount moves over the past week, with the biggest riser, private equity trust Symphony International Holding (LSE:SIHL), edging up just over four percentage points. Its discount now stands at -52.1%.
Symphony International is joined in the top 10 by peers LMS Capital (LSE:LMS) and Seed Innovations (LSE:SEED), offering even higher discounts of -66.1% and -66.8%.
Private equity trusts have suffered from a combination of rising interest rates, fears over valuations and a general “risk-off” mood in markets. However, as our recent feature points out, this sector may present an opportunity for investors with a stomach for risk as holdings and valuations have generally held up well.
While there have been only small discount moves, it is interesting to see two mainstream investment trusts enter the table: F&C Investment Trust (LSE:FCIT) and Mercantile (LSE:MRC), both on discounts of -11.12% and -11.72%.
F&C Investment Trust is a multi-manager strategy that mainly uses in-house managers from its fund firm Columbia Threadneedle. It is managed by Paul Niven, who decides on asset allocation and the gearing level.
Mercantile invests in medium and small-sized UK companies, including those listed on the FTSE 250. This index is often considered a proxy for the UK economy by investors, while the FTSE 100 has more global businesses.
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Symphony International Holding (LSE:SIHL) | Private Equity | -52.06 | -4.03 |
| Macau Property Opportunities (LSE:MPO) | Property - Rest of World | -61.25 | -3.23 |
| ICG-Longbow Senior Sec. UK Prop Debt Inv (LSE:LBOW) | Property - Debt | -36.45 | -3.07 |
| LMS Capital (LSE:LMS) | Private Equity | -66.14 | -3.06 |
| Golden Prospect Precious Metal (LSE:GPM) | Commodities & Natural Resources | -21.72 | -3.04 |
| F&C Investment Trust (LSE:FCIT) | Global | -11.12 | -2.85 |
| Eurocastle Investment (EURONEXT:ECT) | Debt - Loans & Bonds | -34.80 | -2.70 |
| Livermore Investments (LSE:LIV) | Flexible Investment | -44.20 | -2.64 |
| Seed Innovations (LSE:SEED) | Private Equity | -66.78 | -2.56 |
| Mercantile (LSE:MRC) | UK All Companies | -11.72 | -2.42 |
Source: Morningstar. *Data from close of trading 30 May 2024 to close of trading 6 June 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.