Nick Wilson, chairman of the Qatar Investment Fund, on how best to navigate investment company discounts.
As we know, when the share price of an investment trust is below the net asset value (NAV) of the trust's underlying holdings it is trading at a discount: when the share price is above NAV, the shares are at a premium. Most investment trusts trade most of the time at a discount. Share prices reflect demand for the shares, while the NAV reflects the value of the holdings in the trust. Where next for trust discounts? It is worth understanding what's going on with the discount because it can work in favour of the investor, or against. Put £100 in investment trust A trading at a 10%...
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