3 Investment Trusts on an Attractive Discount

Ask the Expert: Morningstar analyst Jackie Beard highlights three Asian investment trusts on an attractive relative discount

Emma Wall 30 August, 2013 | 9:19AM
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Before you deposit your cash into an investment trust, you need to know what you’re buying – and that involves understanding the jargon.

Morningstar closed-ended fund analysts prefer to measure an investment trust’s value based on a historic data so they can determine whether a trust is trading on a relative discount, rather than an absolute one.

The cash you invest in an investment trust buys shares that trade either at a discount to its net asset value, making it cheaper, or at a premium, which makes it more expensive.

Cheaper may sound attractive – but there can be a multitude of reasons why a trust is trading at a discount and as a result some may be best avoided.

In this video Jackie Beard, head of closed-end fund research highlights three investment trusts that are on an attractive discount, and explains why they are trading cheap.

Remember that discounts and premiums are not set in stone and can alter after you buy shares, affecting the value of your investment.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Emma Wall  is former Senior International Editor for Morningstar