Smith & Williamson slams 'archaic' lack of discount control among ITs

Wealth manager Smith & Williamson has lambasted investment trusts with no formal process to control their discount.

Although the financial crisis made it more difficult to maintain discount control mechanisms, James Burns, the head of multi-manager, says they are a key part of a trust’s corporate governance. “For an investment trust to have no discount control mechanism is archaic,” he says. “If you are a large, liquid portfolio there is really no excuse not to have a discount control mechanism in place.” Smith & Williamson, which has £1bn investment in closed-ended vehicles, says three-quarters of trusts have a method for discount control. Included in the 25% that lack such a mechanism is th...