Sketch: We may be closer to shouting 'caveat emptor' on ITs

The key issues impacting investors

Nick Sketch, senior investment director at Investec Wealth & Investment, explains why generalisations about the investment trust sector can be dangerous.

Insofar as we can generalise, the last few years have been productive for investment trust investors. Wide discounts have narrowed, gearing has added to returns, and specialist areas at which ITs excel (commercial property, private equity, the smallest markets or the smallest stocks, asset-backed securities and other niche fixed interest and so on) have done well. However, the sharp re-rating of ITs in the last few years, and the sharp re-rating of many of the areas in which specialist ITs invest, mean investors now need to be more discriminating. IT re-rating The discount narrowin...