YOUR PORTFOLIO
GETTING O
Cherry Reynard reports on how the boards of investment
trusts have dragged these products kicking and
screaming into the 21st Century
O
nce the preserve of
hobbyists and
investment geeks,
investment trusts are
having their day in
the sun. Platform sales by advisers
and wealth managers are up 55 per
cent on a year ago and trusts are
proving increasingly popular with
mainstream retail investors. This
is partly as a result of the changes
wrought by a shift in the way
people pay for financial advice,
but investment trusts must be
given some credit for having
modernised themselves.
Notably, there has been a growing
12
recognition that investors of all
types are deterred by the volatility
brought about by wild swings in
trusts’ discounts and premiums.
The hobbyists love a good discount,
because it allows them to pick up
assets at a knock-down price, but
for more mainstream investors, or
those looking to trusts for income
in retirement, it acts as something
of a burden.
Investment trusts have begun
to shape up, however, and there
has been a greater emphasis on
managing this discount volatility.
Richard Plaskett, client director
in the investment trust team at JP
Morgan Asset
Management,
says: “Managers
and boards are
increasingly
working together
to buy back shares.
Discount volatility is
a concern and this has
been reduced to some
degree.”
While it is difficult to
disaggregate this from the
overall narrowing of discounts
brought about by the relatively
buoyant markets of the past five
years, there does seem to be some
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