Discount Delver: the 10 cheapest trusts on 8 November 2024
We reveal the biggest investment trust discount changes over the past week.
8th November 2024 13:58
by Kyle Caldwell from interactive investor
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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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Over the past week the most notable mover is Gabelli Merger Plus+ Trust (LSE:GMP), which has seen its discount increase by more than 19 percentage points to reach -28.4%. This is a specialist strategy that attempts to profit from the difference between the public market price and the price achieved through corporate catalyst events, such as announced mergers and takeovers.
Second in the table is another specialist strategy, Eurocastle Investment (EURONEXT:ECT). Its discount has increased by nearly eight percentage points to -45.8%.  Â
Elsewhere, two renewable energy trusts make this week’s table: Gore Street Energy Storage Fund (LSE:GSF) and Greencoat Renewables (LSE:GRP).
While the yields for renewable energy infrastructure investment trusts catch the eye (with the sector average yield at 8%), investors have been focusing on lower-risk areas, such as gilts and money market funds, where yields of around 4% to 5% are attractive.
Another area that has been out of favour due to greater competition from bonds is property. Four property-focused trusts feature this week: Urban Logistics REIT (LSE:SHED), Ground Rents Income Fund (LSE:GRIO), Schroder Real Estate Invest (LSE:SREI) and Care REIT (LSE:CRT).
| Investment trust | Sector | Current discount (%) | Discount/premium change over past week* (%) |
| Gabelli Merger Plus+ Trust (LSE:GMP) | Hedge Funds | -28.35 | -19.20 |
| Eurocastle Investment (EURONEXT:ECT) | Debt - Loans & Bonds | -45.80 | -7.70 |
| Gore Street Energy Storage Fund (LSE:GSF) | Renewable Energy Infrastructure | -48.53 | -5.30 |
| Urban Logistics REITÂ (LSE:SHED) | Property - UK Logistics | -30.37 | -4.30 |
| Ground Rents Income Fund (LSE:GRIO) | Property - UK Residential | -70.45 | -4.00 |
| Schroder Real Estate Invest (LSE:SREI) | Property - UK Commercial | -23.81 | -3.60 |
| Greencoat Renewables (LSE:GRP) | Renewable Energy Infrastructure | -22.81 | -3.10 |
| Rights & Issues Investment Trust (LSE:RIII) | UK Smaller Companies | -9.67 | -3.00 |
| Care REIT (LSE:CRT) | Property - UK Healthcare | -29.28 | -2.90 |
| GCP Infrastructure Investment (LSE:GCP) | Infrastructure | -31.42 | -2.70 |
Source: Morningstar. *Data from close of trading 31 October 2024 to close of trading 7 November 2024.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.