Are DCMs taking the fun out of investment trusts?

FE Trustnet's Joshua Ausden asks whether discount control mechanisms (DCMs) are really all they are cracked up to be.

Picking up quality management teams running investment trusts on a discount to their actual value is one of the major draws of the vehicles. In recent years, savvy investors were able to get exposure to the likes of James Anderson, James Henderson and Alexander Darwall on double digit discounts, and the rewards have been rich. The Henderson UK Opportunities trust, run by James Henderson, is a good example of how discount volatility can boost returns. In the midst of the eurozone summer sell-off in 2011, the £32m trust fell to a discount of 29%. Then, a big rebound for UK small caps...