Trustnet searched across the AIC sectors to find the investment trusts that are trading on a historically attractive discount compared to five years ago and that have still maintained performance.
By Rory Palmer, Reporter, Trustnet 17 June 2021
Henderson EuroTrust, Miton UK Microcap and BlackRock Frontiers are just three of the investment trusts that are trading at a wider discount than they were five years ago, research from Trustnet has shown.
We used historic statistics from QuotedData to compare trusts’ discounts from May 2016 with May 2021, to see which are looking cheaper than they were.
However, a widening discount to net asset value (NAV) can be a sign of persistent underperformance. Therefore, only trusts with positive returns were considered and the table below is ranked according to their five-year performance.
That said, not all the funds selected have been top-quartile performers over five years, but for long-term investors keen on the mandate or the manager, the current discount could be a valuable entry point.
Those in the list have been selected after Trustnet looked across all the main sectors to find the trusts that may have gone under the radar with recent impressive returns or that could be poised for a bounce-back or correction.
James Carthew, head of investment trust research at QuotedData also provided his thoughts on some of the funds below.
In first place, as ranked by five-year performance, the £318.8m Henderson EuroTrust has achieved a 106.59 per cent return over the period and is currently trading at discount of 10.6 per cent, 6.6 percentage points lower than the 4 per cent it was at in 2016…
Second on the list is the North Atlantic Smaller Companies trust, run by Christopher Mills.
The £634.2m fund has made a 101.67 per cent return over five years and is currently trading at a 24.1 per cent discount to NAV, a further 10.1 percentage points below its 14 per cent discount in 2016.
However, while the trust has persistently been on a discount, this is the widest it’s been in five years.
Carthew said: “In some ways, it’s a value approach, but Mills buys growth companies and sometimes you get the best of both worlds.”
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