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The trusts trading well below their 10-year average valuation
The increased popularity of investment trusts is reflected in a pronounced narrowing of the average discount to net asset value (the value of a trust’s investments minus any liabilities) across all trusts over the past decade.
Data from the Association of Investment Companies and Morningstar shows that as at 31 December 2021, and excluding venture capital trusts and alternative vehicles, trusts traded at a weighted average discount to net asset value of 4.1% compared with 11.1% in 2011.
Among the trusts trading at odds with their average premium or discount to NAV over the last decade are Lindsell Train (LTI) –
the Nick Train steered fund – trading at a premium of just
5.8% compared with a 10-year average of more than 20%. This reflects a shift in investor sentiment towards the quality defensive stocks which dominate its portfolio and a recent dip
Income-driven global trust Murray International (MYI) was trading at a 6.8% discount at the end of 2021 compared with an average premium of 2.6% over 10 years.
And another dividends-focused vehicle, Abrdn Asian Income Fund (AAIF) finished 2021 on a 12.7% discount compared with a 10-year average of 3.8%.