Best and worst: Discounts on international investment trusts
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.FOREIGN & Colonial Investment Trust moved to trading at a premium for the first time since 1972 this week, writes Caroline Merrell.
Trading at a premium means that investors are paying more for shares than their net asset value. But when the investment trust shares are trading at a discount, investors are buying below the net asset value.
Investment trusts move to a premium when demand for their shares outstrips supply.
The dilemma facing investors is whether they should pay extra for getting into a trust that may outperform in the long run, or pick a trust trading at a discount, which could point to a less sparkling performance but might offer opportunities for narrowing the discount and so buying the assets cheaply.
Craig Walton, F&C head of marketing, said that its share plan was providing a continuous flow of retail money to support the share price. A sum of pounds 100 invested in the fund three years ago would now be worth pounds 228.
The only other investment trust in this sector trading at a premium is Bankers, run by Henderson Touche Remnant. It is considering the issue of more shares to eliminate the premium.
Two of the funds trading at the biggest discount have shown creditable performances over the past three years. For example, pounds 100 in the Investment Trust of Guernsey three years ago would now be worth more than pounds 200.
----------------------------------------------------------------- Discounts on international investment trusts ----------------------------------------------------------------- The highest Premium/discount 1 Baring Tribune. . . . . . . . . . . . . . . . . . . . . . . . .-13 1 Mid Wynd International. . . . . . . . . . . . . . . . . . . . .-13 3 Investment Trust of Guernsey. . . . . . . . . . . . . . . . . .-12 3 Scottish Eastern. . . . . . . . . . . . . . . . . . . . . . . .-12 5 Scottish American. . . . . . . . . . . . . . . . . . . . . . . -12 The lowest 15 Second Alliance. . . . . . . . . . . . . . . . . . . . . . . . .-7 15 Edinburgh Investment. . . . . . . . . . . . . . . . . . . . . . -5 17 Personal Assets. . . . . . . . . . . . . . . . . . . . . . . . .-3 17 Sphere Units. . . . . . . . . . . . . . . . . . . . . . . . . . -3 18 Foreign & Colonial. . . . . . . . . . . . . . . . . . . . . . . -1 19 Bankers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Figures are for December 31, 1993. F&C now trading at a premium. ----------------------------------------------------------------- Source: AITC -----------------------------------------------------------------
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments