IT discounts return to pre-crisis lows

Investment trust sector sees an increase in number of boards implementing discount control mechanisms.

Investment trust discounts have fallen back below pre-Lehman levels, driven lower by an uptick in boards implementing discount control mechanisms (DCMs). The average discount widened from 7% in July 2007 to 10.3% in December 2007, but has now moved back to 7.1%, the lowest level since the financial crisis. Ian Sayers, director general of the AIC, said investment company boards have become increasingly focused on taking steps to narrow trust’s discounts to NAV. “Good performance, combined with investment company boards increasingly adopting discount controls, which are now used by a...