- Trust discounts are a chance to buy in cheaply
- But they are also an obstacle to growth
Last week, we looked at an investment trust – Aberforth Split Level Income (ASIT) – whose management, low fees and record of unbroken dividend hikes have won it an enviable accolade: a share price in line with its net asset value (NAV). Such resilience is the exception in a sector whose average discount to NAV now sits at 14 per cent.
This struggle, as well as the efforts many trusts are making to correct those discounts, serves as a useful reminder of the odd market dynamic that can hurt such closed-end funds.