Nick Greenwood of MAM Funds explains the benefits and risks of investing in deeply discounted investment trusts.
Given that investment trusts have a fixed number of shares in issue, investors wishing to invest or redeem must do this by buying or selling in the second-hand market. The principal advantage of this type of vehicle over open-ended funds is it protects the manager from inflows and outflows to and from the portfolio, a crucial advantage in a world were liquidity has progressively become more restricted. Investing away from easily tradeable blue chips using open-ended funds is fraught with hidden risks. There is a potentially fatal mismatch between unitholders right to redeem their enti...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
