Discount Delver: the 10 cheapest trusts on 5 December 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.

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. 

This week’s data runs from Thursday 28 November to Wednesday 4 December.

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One Super 60 fund made the Discount Delver list this week: Pacific Assets. The Asia investment trust that has 43% invested in India is now on a -14% discount, 3 percentage points larger than a week ago.

Despite the discount, performance has been relatively strong, returning 37% over five years and 4.5% over the past 12 months.

The biggest discount move, however, was from private equity trust Literacy Capital PLC (LSE:BOOK), which now trades on a -6.5% discount compared with a 1% premium a week ago. It has a diverse portfolio, ranging from housebuilders to manufacturing firms. Another private equity investment trust made the list - Dunedin Enterprise – which is now on a -24.3% discount, compared with -20% a week ago.

The most discounted trust is Eurocastle Investment, which provides loans to companies. The shares trade on a discount to NAV of -51.2%. The next two most discounted trusts on this week’s Discount Delver list are Triple Point Energy Transition (-28.8% discount) and Golden Prospect Precious Metal (-23.2%).

An industry discount opportunity could be Brown Advisory US Smaller Companies, where the discount rose from -7% to -10% over the past week. Meanwhile, US companies are performing well, driven by excitement that incoming president Donald Trump will stimulate the US economy. Shares in this trust have risen 15% this year.

A UK smaller companies trust also made the list: Aberforth Geared Value & Income. It is now on a -21.5% discount. Its top shares are Vesuvius and NCC Group.

Rounding off this week’s Discount Delver list are: Ashoka India Equity Investment  and Bellevue Healthcare, where discounts rose by about 2.5 percentage points over the week.

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