“Bag a bargain” – six trusts on discounts
[First a disclaimer – here at QuotedData we don’t make recommendations – we just try to give you the information that you need to make your own mind up – and we are not financial advisers. In the article, James Carthew mentions two trusts that are trading at a discount to net asset value – North Atlantic Smaller Companies and VinaCapital Vietnam Opportunities. The large holder of North Atlantic Smaller companies known to be keen on narrowing discounts is Capital Gearing Trust.]
Investment trusts are known for delivering strong returns over the long term, with the average trust shown to earn investors significantly more than the average fund – a similar investment vehicle – over ten years or more.
One reason for this is their different structure. Like funds, trusts pool investors’ money and invest it in companies. Anyone can invest in a trust or fund for as little as £25 per month, which adds to a pot of hundreds of millions that managers then deploy.
Unlike funds, though, trusts are listed on the stock market. this means that, like any other company, they have shares that can be bought and sold, with the price of those shares going up and down depending on the number of buyers and sellers.
And so, one of the foibles of investment trusts is that sometimes the value of the shares can be worth less than the value of the assets – or investments – they hold. This is called a share price to net asset value (NAV) discount, or just a discount…. read more here