Property and Smaller Company Trusts on a 10% Discount

Looking to pick up a bargain investment in the Brexit aftermath? Morningstar fund analyst David Holder highlights two highly rated closed-end funds trading on a discount

David Holder 29 July, 2016 | 10:40AM
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In the wake of the surprise Brexit vote on June 23 several UK equity investment trusts saw their discounts widen as investors sold off sterling and domestically focused stocks, instead heading for the perceived safe haven of government bonds.

While investor negativity has since cooled, and the FTSE 100 has rallied, the result of the EU referendum has left its mark on closed-end funds, especially on those within the UK direct property sector. It has also created some relative value within two of highly rated closed-end funds.

Commercial Property Trusts Hit

UK commercial property is arguably the sector most aligned with the general health of the UK economy. It has been a very popular area for investors seeking a reasonable and rising level of income over the past few years as rock bottom government bond yields have impacted portfolios.

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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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
BlackRock Smaller Companies Ord1,881.80 GBP-3.00Rating
BMO Commercial Property Trust98.07 GBP-2.52
BMO Real Estate Investments Ord87.01 GBP-1.12
Edinburgh Worldwide Ord299.31 GBP-3.13Rating
Schroder Real Estate Invest Ord51.02 GBP-1.89
Scottish Mortgage Ord1,475.10 GBP-0.83Rating
Standard Life Inv. Prop. Inc. Ord72.53 GBP-1.99
UK Commercial Property REIT Ord73.75 GBP-2.57

About Author

David Holder  is a senior investment research analyst at Morningstar