How much misery is factored into the investment trust sector? It's a question bargain hunters have been asking themselves for much of the past 12 months, with the huge share price discounts to net asset value (NAV) offering a 'cheap' way into funds of all stripes.
Tip style
Growth
Risk rating
High
Timescale
Long Term
Bull points
- Big discount
- Conviction-led portfolio
- Optionality from macro bets
- Excellent track record
Bear points
- Patchy disclosure
- High costs
Often the discounts hint at well-founded investor concerns, relating to factors such as how private equity portfolios fare in a world of higher interest rates, how competitive infrastructure funds look at a time when bond yields are finally attractive, or how to value an esoteric asset class at a higher discount rate. But some names in the space do seem unfairly punished.