Kathleen Gallagher, Investment Week, 21 January 2022:
In 2021, equity investment trusts saw their discounts widen by a weighted average of 4.8%, according to figures from the Association of Investment Companies (AIC) and Morningstar for Investment Week.
However, when it comes to the individual winners and losers trusts swung drastically in both directions…
Despite the changing market sentiment, some investment trust sectors had a strong year, with two seeing a positive change: Biotechnology & Healthcare and Environmental. These sectors saw their discounts narrow by a weighted average of 4.1% and 6.8% respectively.
Meanwhile, four trust sectors saw double-digit widenings: commodities & natural resources (15.5%); flexible investment (14.7%); country specialist (14.5%) and India (12.9%).
While some of the changes in discounts can be attributed to wider market movements, this is not always the case. For instance, the China/Greater China sector saw its discount widen, but only by 3.4% – below the average for the entire universe.
Similarly in the UK, while small caps performed better than the broader market, the UK Smaller Companies sector’s discount widened by 7.9% compared to 1.8% for UK All Companies…
“RIT Capital Partners is unique among investment companies in that it offers shareholders access to a diverse range of investment styles that are not usually available to individual investors,” explained James Carthew, head of investment company research at QuotedData.
…Looking to those trusts that saw their discount widen during the period, several were impacted by the rotation away from growth stocks.
This was the case for both Baillie Gifford China and JP Morgan UK Smaller Companies, according to Carthew.
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