Trust analysts: Now is the time for DCMs to prove their effectiveness

Widening discounts offering attractive opportunities

Investment companies have been buffeted by market turbulence following the UK's decision to leave the EU, although widening discounts have also offered attractive buying opportunities for investors in sector stalwarts such as Scottish Mortgage and City of London.

According to figures from the Association of Investment Companies (AIC), sector average discounts widened across most areas between 31 May and 24 June, including Europe, Emerging Markets and Property, with Private Equity being hit the hardest, widening from a 1.9% discount to 12.8%. But analysts remain fairly positive about prospects for the closed-ended space, arguing many trusts have high global exposure and are unlikely to suffer the same level of outflows seen in the wider market and the open-ended space. Charles Cade, head of investment companies research at Numis Securities, sai...