Time of change sets pace to improved performance

investment trusts

Investment trusts are undergoing a series of innovations which include opportunities for investors to get their money back after specified periods and use of treasury shares to help manage discounts

Shareholders like certainty so it is not surprising that widely fluctuating discounts have not helped the perception of investment trusts. The average discount for investment trusts came down to 9.4% in March, from around 13% in the middle of 2004. Wide discounts reflected widespread institutional selling and lack of demand for equity funds from retail investors. What has changed is a pick-up in markets, together with a spate of corporate action. That said boards and managers are also showing determined action to re-invigorate the sector. Discount control mechanisms are a good example....