7 Cheapest Gold Rated Investment Trusts

It is getting more difficult to snap up closed-end funds on the cheap, as discounts narrow following a significant stock market rally

Karen Kwok 3 April, 2017 | 10:49AM

Developed market indices hit all time highs in March, driving discounts on close-ended funds to their narrowest level in 15 years. Investment trusts are trading at an average of 5% discount today, moving from an 11% discount directly after the Brexit vote, according to a report issued by an investment firm Stifel. Among the 33 investment trust sectors examined by Stifel, a third of them have seen discounts narrow to less than of 2%. Investors interested in adding closed-end funds to their portfolio are in danger of missing out on a bargain if they do not act promptly.

The S&P 500 hit all-time high at 2,395 on March 1, while the FTSE 100 reached its highest level at 7,429 on March 20. The FTSE 250, which includes smaller and more domestic-focused companies in the UK, also hit its highest level of 19,151 last month.

“The narrowing of discounts reflects supply and demand dynamics for trust shares in the market, with investors being net buyers of shares against a background of strong stock market return. Following the EU referendum investors have generally seen strong returns from many investment trust sectors with a combination of forex gains, buoyant stock markets and discount narrowing being a perfect cocktail to generate some strong capital gains,” said Stifel.

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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.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Aberdeen Standard Asia Focus Ord990.00 GBX0.81
Baillie Gifford Japan Ord810.00 GBX1.38
BlackRock Smaller Companies Ord1,304.00 GBX1.24
BlackRock World Mining Trust plc402.50 GBX2.42
Jupiter European Opportunities Ord705.00 GBX1.15
Monks Ord1,142.00 GBX2.51
Murray International Ord1,002.00 GBX2.04
Schroder Asian Total Return Inv. Company387.00 GBX-0.77
Schroder Japan Growth Ord173.00 GBX1.62
Scottish Mortgage Ord959.00 GBX5.27
Standard Life UK Smaller Co. Ord472.00 GBX-0.84

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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