Discount Delver: the 10 cheapest trusts on 25 October 2024
We reveal the biggest investment trust discount changes over the past week.
25th October 2024 12:40
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. We publish this article every Friday, using data up to the close of trading the previous day.  Â
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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This week, due to circumstances outside our control, we could run the data only to the end of Wednesday, with the table below reflecting discount movements from 16 October to 23 October.
Property-focused investment trusts account for more than half of this week’s table, with Custodian Property Income REIT (LSE:CREI) seeing its discount increase by nearly seven percentage points to -19%. Tritax Big Box (LSE:BBOX) was the third-biggest discount mover, rising to -18.1%, while Starwood European Real Estate Finance (LSE:SWEF), Urban Logistics REIT (LSE:SHED), Value and Indexed Property Income (LSE:VIP), and Supermarket Income REIT (LSE:SUPR), all saw their discounts increase.
As a recent feature pointed out, property investments have performed disappointingly over the past couple of years, but with widespread expectations that interest rates will be cut further, many investors are once again considering the asset class.
When sizing up property funds, bear in mind that in the past open-ended property funds have put suspensions in place during times of market stress. REITs arguably offer more liquidity, but the trade-off is that when sentiment is sour and investors rush for the exit, the share price of a REIT takes the strain.
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Custodian Property Income REIT (LSE:CREI) | Property - UK Commercial | -19 | -6.7 |
| JPMorgan Global Core Real Assets (LSE:JARA) | Flexible Investment | -24.4 | -4.8 |
| Tritax Big Box (LSE:BBOX) | Property - UK Logistics | -18.1 | -4.4 |
| Starwood European Real Estate Finance (LSE:SWEF) | Property - Debt | -15.4 | -3.8 |
| Oryx International Growth (LSE:OIG) | UK Smaller Companies | -31.1 | -3.4 |
| Chrysalis Investments Limited (LSE:CHRY) | Growth Capital | -39.7 | -3.2 |
| Urban Logistics REIT (LSE:SHED) | Property - UK Logistics | -25.9 | -3.1 |
| Value and Indexed Property Income (LSE:VIP) | Property - UK Commercial | -14.6 | -2.9 |
| Crystal Amber (LSE:CRS) | UK Smaller Companies | -36.2 | -2.7 |
| Supermarket Income REITÂ (LSE:SUPR) | Property - UK Commercial | -19.3 | -2.6 |
Source: Morningstar. *Data from close of trading 16 October 2024 to close of trading 23 October 2024.
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.