How investor sentiment has influenced the latest round of IT re-ratings

Simon Cordery, head of investor relations and business development, investment trusts at F&C Investments, explores the extent to which market sentiment can affect trusts.

It is often asked what drives discounts and premiums on investment companies. The answer is actually very straightforward: supply and demand.  Perhaps the better question to ask is: what conditions need to exist in order to change the supply and demand dynamics enough to bring about a change (or re-rating) in the current discount or premium of an investment company?  That is a much harder question to answer as there are many factors that can apply.  Take the following example. Not so long ago, in the aftermath of the global financial crisis, the idea of investing in European equity...