Should You Ever Buy an Investment Trust at a Premium?

Investment trusts on hefty premiums might pay a decent income, but investors may do better to look for bargain trusts trading at a discount

Holly Black 29 May, 2019 | 2:54PM
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Investment chart

When investment trusts are in demand their price goes up – but is it ever worth paying over the odds to invest in a top trust?

At least 38 investment trusts are trading at a premium of 4% or more to their net asset value, according to Morningstar data. Typically, trusts trade at a premium when they are firmly in favour with investors – this can be for any number of reasons: the region or sector the trust focuses on may be in fashion, the trust may pay a higher-than-average income, be run by a well-rated manager or have had a strong run of performance. 

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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
3i Ord1,285.50 GBX-0.54Rating
Amedeo Air Four Plus23.70 GBX0.00
Baillie Gifford Shin Nippon Ord267.00 GBX0.56Rating
Bluefield Solar Income Fund122.80 GBX-1.76
Doric Nimrod Air Three Ord39.50 GBX-1.25
Doric Nimrod Air Two Ord72.50 GBX-0.68
Greencoat UK Wind142.00 GBX0.71
Hannan Metals Ltd0.27 CAD0.00
Hansa Investment Company Ltd Ord222.00 GBX0.00Rating
Lindsell Train Ord1,625.00 GBP4.50Rating
LMS Capital Ord35.00 GBX2.94Rating
New Star Investment Trust Ord141.00 GBX0.00Rating
NextEnergy Solar Ord100.00 GBX1.52
RIT Capital Partners Ord2,625.00 GBX-0.38Rating

About Author

Holly Black  is Senior Editor,


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