- Investment trust discounts are caused by a wide range of factors
- Entire sectors are currently out of favour and trading below their asset value
- A board that stands behind its portfolio is key
At a time when investing feels like navigating a minefield – with inflation, rising interest rates, an energy crisis and a recession just some of the risks out there – investment trusts have much to recommend them.
They are a straightforward way to diversify a portfolio by giving investors access to a number of areas and companies, including illiquid assets. They are led by experienced managers who follow market developments daily, in a world where momentous changes are happening at breakneck speed. They save investors the time and energy needed to make complicated decisions in sectors they are unfamiliar with. And they can use reserves to pay dividends even when their portfolio companies go through a rough patch, softening the blow for investors.