Tom Aylott, Portfolio Adviser, 12 JUNE 2024:
Investors should consider purchasing shares in BlackRock Throgmorton before its share price recovers, according to a new research note from QuotedData.
The £565m trust is trading 10.8% below its net asset value (NAV), but that could shrink substantially when the conditions for UK small and mid-cap companies improve later this year.
David Johnson, senior investment analyst at QuotedData, said: “With both the economic and political outlooks in the UK improving, there is little logic behind the cheap valuations of Throgmorton’s holdings, or its historically wide discount to NAV.
“There is the opportunity for significant mean reversion as economic certainty improves and a period of difficult politics comes to a close.”
The end of the UK election in July could bring some much-needed steadiness to the UK equity market, which has been plagued by political volatility.
Johnson said a Labour victory – which looks likely according to the latest polling figures – could create “greater stability by bringing to an end to the revolving door of Prime Ministers that the UK has seen under the Conservatives in recent years”.
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