Large trust discounts 'evaporate' as buy-list culture takes hold

Value is drying up among the largest investment trusts in the market, with discounts shrinking as buyers favour more liquid products.

Research conducted by broker Winterflood for Investment Week split the 281 funds in its closed-ended universe into four quarters according to market cap. It found a double-digit discount gap between the largest and smallest quartile of investment trusts. The average sub-£75m investment trust below £75.6m is trading on a discount of 13.1%, compared with just 2% for the biggest trusts, classified as those above £361m (see table below). Trusts in the top quartile by size have also seen their discounts come in at a faster pace than smaller portfolios. In January 2013 the average discou...