Discount control mechanisms: what works? What doesn't? And why?

COMMENT

Discount control mechanisms, or share buyback schemes, come in various shapes and sizes.

Discounts are visible, hard to ignore, can prove attractive (to arbitrageurs) or unattractive (to shareholders looking for an exit). This is where discount control mechanisms come in. While there is more than one way to skin a cat, there are also some ways that are clearly more effective than others. Share buybacks for cancellation or for holding in treasury to support a specific discount target:  this is a popular strategy, and often the most successful. However, it can be difficult to manage. Meeting targets all the time is tough to achieve; for smaller trusts, the associated shr...