Discount Delver: the 10 cheapest trusts on 21 February 2025
We reveal the biggest investment trust discount changes over the past week.
21st February 2025 10:31
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).  Â
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.  Â
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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.Â
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Specialist investment trusts dominate this week’s table, with Schiehallion Fund (LSE:MNTN) seeing its discount rise the most by over six percentage points to -16.7%. Managed by Baillie Gifford, it specialises in early stage private companies, some of which are well-known names including Elon Musk’s SpaceX, TikTok owner ByteDance, and payment provider Stripe.
It has delivered an eye-catching share price total return one-year gain of 80.4%, but losses of -45.5% are steep over three years. The trust is in the red over five years, although the loss is much smaller, at -7.6%.
Trusts in the Growth Capital sector back early stage private companies. When interest rates started rising at the end of 2021, higher-risk investments became less appealing as yields on lower-risk bonds increased and interest rates on cash accounts rose.Â
Towards the end of 2023, market expectations on the future direction of interest rates changed. This was several months ahead of the Bank of England making a move to start cutting rates. Since the narrative changed on interest rates, high-growth stocks have been staging a recovery.
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Schiehallion Fund (LSE:MNTN) | Growth Capital | -16.73 | -6.40 |
| EPE Special Opportunities (LSE:ESO) | Private Equity | -51.98 | -5.80 |
| Eurocastle Investment (EURONEXT:ECT) | Debt - Loans & Bonds | -22.09 | -5.50 |
| Alternative Income REIT (LSE:AIRE) | Property - UK Commercial | -15.39 | -4.90 |
| Greencoat UK Wind (LSE:UKW) | Renewable Energy Infrastructure | -28.02 | -4.60 |
| Premier Miton Global Renewables Trust (LSE:PMGR) | Infrastructure Securities | -14.24 | -3.90 |
| Downing Renewables & Infrastructure (LSE:DORE) | Renewable Energy Infrastructure | -30.41 | -3.80 |
| ICG-Longbow Senior Sec. UK Prop Debt Inv (LSE:LBOW) | Property - Debt | -27.94 | -3.80 |
| Castelnau Group (LSE:CGL) | Flexible Investment | -9.80 | -3.70 |
| Ashoka India Equity Investment (LSE:AIE) | India/Indian Subcontinent | -2.49 | -3.20 |
Source: Morningstar. *Data from close of trading 13 February 2025 to 20 February 2025. Â
These articles are provided for information purposes only. Â Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. Â 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.