Have new reporting methods helped investment trusts?

ITs

Jackie Beard, director of closed-end fund research at Morningstar UK, analyses the impact of investment trusts' reporting NAVs on a cum-fair basis.

On 31 May 2008, the investment trust sector started to include current year revenue in each fund’s net asset value (NAV) and thus the cum-income NAV was born. The reasons for including income in the NAV calculation were clearly laid out at the time by the Association of Investment Companies (AIC). The prior introduction of consistent accounting principles in the AIC Statement of Recommended Practice in December 2005 paved the way for standardisation in financial reporting and thus the ability of companies to calculate current year revenue subsequently became much easier. This move bro...