Investment Trusts

StellaN

Thanks for that so how do you check for good discounts on the website?

cloud_dog

StellaN wrote: »

Is there a quick way to check out if there are any investments trusts that are currently offering decent discounts or do you have to check each individual IT that is of interest to you?

Trustnet allows you to list/search ITs and then sort them by premium/discount:

Trustnet >> Investment Trusts >> Prices & Performance

Plus

StellaN wrote: »

Is there a quick way to check out if there are any investments trusts that are currently offering decent discounts or do you have to check each individual IT that is of interest to you?

Citywire have a website called Investment Trust Insider with a regular feature called Investment Trust Watch. These highlight not just trusts on premia or discounts, but trusts that are trading above or below their usual range. ie a trust on a 10% discount that's usually on a 5% discount is 'cheap', while one that's usually on a 15% discount is 'expensive'.

BLB53 wrote: »

This is the site I use
http://www.theaic.co.uk/

That's just a frontend to Morningstar, isn't it? Do they offer anything extra?

TCA

StellaN wrote: »

Thanks for that so how do you check for good discounts on the website?

Click on "find and compare investment companies" and every single investment trust will appear in a table alphabetically (over several pages). Click the arrow on the column entitled "discount/premium%" to sort by order and/or use the "download the search results" button and then sort in whichever way in a spreadsheet by yourself.

coastline

StellaN wrote: »

Is there a quick way to check out if there are any investments trusts that are currently offering decent discounts or do you have to check each individual IT that is of interest to you?

All shown in chart form and updated..

http://maverickmoneyuk.com/charts-2/it-uk/

http://maverickmoneyuk.com/charts-2/it-global/

http://maverickmoneyuk.com/charts-2/asia-pacific-and-japan/

http://maverickmoneyuk.com/charts-2/investment-trust-charts-europe/

http://maverickmoneyuk.com/charts-2/investment-trust-charts-the-americas/

http://maverickmoneyuk.com/charts-2/investment-trust-charts-sector-specialist/

http://maverickmoneyuk.com/charts-2/asia-pacific-and-japan/

AnotherJoe

StellaN wrote: »

Is there a quick way to check out if there are any investments trusts that are currently offering decent discounts or do you have to check each individual IT that is of interest to you?

No. Emphatically no.

There is certainly a way to check out if IT's are on discounts, as several posts point out.

Whether these are "decent" discounts is impossible to say, they are at a discount for a reason and that will have to be investigated individually.

That may be "fashion", eg lets say China has gone out of fashion and is oversold (if you believe in that concept), or it may a respected manager has left (or will be leaving), or maybe that there is something nasty lurking in the underlying investments and the discount will narrow in the worst way, eg because the underlying investments fall to meet the IT valuation.

It is certainly not as simple as saying "oh look IT A is on a 10% discount therefore its better value than IT B which is at a 10% premium". It might be. .... Or it might not

JohnRo

There's also the Z score aspect.

If a trust has been on a consistent 10%-15% discount for years then it's debatable whether the discount means much at all in terms of the perceived value of a trust. The same applies to multi year premiums on things like infrastructure funds. In theory it matters but in practice, though not an irrelevance, it's hardly a deal breaker.

I've tended to completely ignore (overlook) single digit premiums and discounts on stuff I want to hold regardless.

bowlhead99

You can certainly find the largest discounts or smaller premiums purely by sorting them as TCA says. Of course, a number of them will be inaccurate because the NAV may only be published weekly or monthly or properly calculated quarterly, and very best case scenario declared as of the end of the previous business day - yet the discount / premium is typically calculated by having that NAV compared to a current price. So it can only be a jumping off point for research.

I agree with the observation from Another Joe who said there could be no league table or listing of trusts that are on decent discounts, or 'the best discounts' or whatever. Whether the discount is decent or good compared to another trust with a different set of holdings and strategy and manager which happens to be on another discount or premium, is completely subjective. It might make total sense for a private equity fund or a fund-of-funds with illiquid underlying assets to be on a 20%+ discount while it also makes sense for an infrastructure fund with reliable income to be on a premium to underlying NAV of the disparate underlying holdings in an ultra-low-yielding marketplace.

Clearly if you are expecting a 7% annualised return from your equity investments, that translates to a total return of near enough 100% a decade or 300% over two decades. So, it doesn't really matter if you pay 5% 'too much' or 'too little'. You'll still make money over the decade or two.

If you find a high discount somewhere, it means that other people don't have faith you'll get your 100% return as easily as you think you will. So maybe moderate your expectations or recognise you're taking a higher risk than other people are prepared to take. By contrast if you find a trust on a high premium and think you should avoid it because it means you'd have lower prospective returns... the market is actually telling you that they believe it is very likely to deliver on its promises and there is loads of demand among people competing to buy that trust because it is so awesome that you simply can't buy into it unless you're willing to pay through the nose.

So, every step of the way, you have to think: what is it I know or believe about the nature of this particular portfolio that means the market has 'mispriced' it and the discount is attractive: i.e. a 'decent discount' for what the company offers.

Sally57

I'm looking to invest in some IT's and doing some research on this, however I would like to ask for some views on investing in different geographical regions.

For instance, some posters on this forum seem to hold several (3 or 4) UK Equity IT's - is this purely to receive the dividends for income? I don't require any income at the moment so I'm only interested in re-investment/growth at this stage.

Also is it best to only have one IT in each geographical region (maybe with the exception of UK for income)?

cloud_dog

Sally57 wrote: »

I'm looking to invest in some IT's and doing some research on this, however I would like to ask for some views on investing in different geographical regions.

For instance, some posters on this forum seem to hold several (3 or 4) UK Equity IT's - is this purely to receive the dividends for income? I don't require any income at the moment so I'm only interested in re-investment/growth at this stage.

Also is it best to only have one IT in each geographical region (maybe with the exception of UK for income)?

Didn't you go through this region / cross over discussion in your Investment Trusts or OEIC's thread????