What's an investment trust?


#1

Check out our guide to investment trusts AKA “the City’s best kept secret”. :eyes:


(Harry) #2

Great post, certainly a good one to highlight.

Is there any traction on displaying NAV on their performance charts as that’s somewhat unique to ITs and important to consider?


Investment Trusts Q&As
#3

Good article! Very much looking forward to the JP Morgan India trust coming this week that’s mentioned too.

On a side note the logo for CTY seems to switch between being the City of London logo and the investment manager Janus Henderson on different pages of the app unless I’m just stuck in a loop of cached assets.


#5

Nice! I wondered why SMT was trading at a premium when I read this on Yahoo a while ago:

If possible, then I’d welcome this too.


#6

Am very happy to hear that more investment trusts will be added.

For info, two of those already available and one of the ones soon to be added are ‘dividend heroes’, ie have been paying increasing dividends over consecutive years:

  • City of London Investment Trust - 51 consecutive years dividend increased
  • Scottish Mortgage Trust - 35 consecutive years
  • Scottish Investment Trust - 34 consecutive years

Obviously past performance is no guarantee for the future but I’ve invested in all of them and look forward to topping up my investments! :slight_smile:


(Kenny Grant) #7

Really interesting post, thanks.


(Giridhar Tammana) #8

Very informative :+1:

I’m guessing FT would show both current price and NAV in the app? may be % difference between them?
Are there no closed end mutual funds? I though there are :thinking:


(Harry) #9

Following are at discount to NAV currently (19 Jan):

  • Edinburgh Dragon Trust
  • JPM India
  • BlackRock Smaller Companies
  • Woodford Patient Capital

They can and often do run at a discount for prolonged periods, however I do like the fact you are buying assets at a discount to their intrinsic value and will certainly use this, amongst other research, as reason to/not to invest.

I like the bottom three listed, plus Scottish Mortgage and City of London IT.


(Rob N) #10

I’ve added an idea to vote for adding the NAV in the app as it’s not currently in the app.

Looks like the JPM investment trust is trading at a 13% discount and has been for years. Anyone know why that could be?

(Chart from JPM)


(Harry) #11

I don’t have specifics, but as it’s closed ended there are two reasons generically:

  1. Strong underlying performance of investments. This ‘stretches’ the NAV, essentially it increases. The units should increase in lockstep, unless

  2. More people have sold units overtime/recently than have bought them. This would push the price down (like a conventional stock), while the NAV continues to increase regardless (based on the underlying inv performance). It ‘sags’ while the NAV ‘stretches’.

As it’s closed ended, the fund manager could reduce the discount by purchasing their own units, or there could be an increase in investor sentiment, and more people buy the units.

It’s not specific, sorry if that what you wanted!!