Discount Delver: the 10 cheapest trusts on 7 February 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. 

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Schroders Capital Global Innovation Trust (LSE:INOV) was the biggest mover this week, with its discount moving nearly five percentage points to -50.4% over the period (30 January to 6 February).

The discount has increased ahead of a continuation vote later this month. The board says that a wind-down of the investment trust is in the best interest of shareholders. This would result in capital being returned to shareholders over time. Schroders took over the troubled trust in 2019 in the wake of the collapse of Woodford Investment Management. It was formerly known as Woodford Patient Capital, and previously managed by Neil Woodford.

Despite taking steps to change the investment approach – including switching from a UK to a global remit – performance hasn’t improved, reflected in its big discounts.

Also of note this week is Edinburgh Worldwide (LSE:EWI), which has seen its discount increase by just over three percentage points to -5.8%. The global smaller companies trust will be the last of the “Saba seven” investment trusts to hold a shareholder vote on the activist investor’s proposals to oust the board. The general meeting takes place on 14 February, while the voting deadline for interactive investor customers is 6.59pm on 10 February.

The long-term trend of alternative assets remaining out of favour with investors continues, reflected in the table featuring trusts specialising in property, leasing, and debt.

Source: Morningstar. *Data from close of trading 30 January to 6 February 2025.