Narrowing discounts have contributed to the outperformance of investment trusts over their open-ended counterparts in recent years, but what happens when the music stops?
‘Investment trusts outperform funds over the long term' is a staple phrase of many closed-ended enthusiasts, and for good reason. The majority of IT sectors are comfortably beating their IA equivalents over 10-, 15- and 20-year periods. They even have the edge over three and five years, in many cases. There are a few reasons why this has happened. In spite of one of the worst financial crises in history, the last decade has been a pretty good time to be invested in equities. The MSCI World and FTSE All Share have made money in eight of the last ten calendar years, and double-digit ret...
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