Tuesday, April 23, 2024
InvestingStock Market

2 Well Performing Investment Trusts Trading at a Discount

With the Global Stock Markets well and truly down from historical highs, some investors are looking to start to reinvest cash. Perhaps not all in one go as the stock market may well have further to fall, but it would be difficult to criticise anyone for considering many stocks good value.

One way to invest is through Investment Trusts. There are a few different types focussing on many different sectors, locations and strategies. In this article we are going to focus only on mainstream trusts which invest in equities.

We used Trustnet for our information. Here you can filter by sector, asset class and more and sort results by growth, discount and more.

We’ve looked at performances over the last 1, 3 and 5 years. The interesting thing about trusts is that you can compare the price to the Net Asset Value to see if it is trading at a discount or premium and we have considered this. We have also considered the level of borrowing, also known as the gearing.

Scottish Mortgage Investment Trust PLC

‘Scottish Mortgage is an actively managed, low cost investment trust, investing in a high conviction, global portfolio of companies with the aim of maximising its total return to its shareholders over the long term.’

Given the current climate being only 3.8% down in the last year, that’s not too bad. Over 3 years it has acheived 34.5% growth and over 5 years 84.4% growth. It is currently trading at a 7.5% discount. It also has a reasonable annual charge at 0.30% and a fair bid/offer spread of 0.6%. The dividend yield is quite low at 0.66%, but some ITs don’t give any. It also has an FE fundinfo Crown Rating of 5/5.

JPMorgan China Growth & Income plc Ord 25 P

This Investment trusts invest in companies which are quoted on the stock exchanges of Hong Kong, China and Taiwan. It’s one of the best performers over 3 years and 5 years in terms of Investment Trusts which invest in equities. It’s grown by 59% over 5 years, 36% over 3 years and is 6.3% up this year. Considering the recent stock market performance, that’s some pretty impressive statistics. It’s currently trading at a discount to net asset value of 17.9%. It has net gearing of 9.84%, giving some gearing, but we consider this not too debted. It also has an FE fundinfo Crown Rating of 5/5. Bid/Offer spreads at the moment can be wide open, but for this this company it’s relatively reasonable at 3%. It also aims to pay 4% of NAV as dividends. Currently the yield is 0.8%.

Disclaimer Trusts

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