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Three investment trusts trading at bargain basement discounts


Black Friday sales have started early this year, and when it comes to investments, there are a range of attractive products on offer once again. Following a volatile year, some long-running investment trusts are sitting on particularly wide discounts to history, presenting real opportunities for investors to access them for the long term, according to Adrian Lowcock at Willis Owen.

Lowcock, head of personal investing at Willis Owen, said:

“It is that time of the year again when discounts abound for all of us, and when it comes to investments the situation is similar. Some long-standing investment trusts with excellent track records are sitting on attractive discounts after what has ended up being a very volatile year for markets. While the volatility continues, investing in trusts when they are out of favour can be a real long-term wealth generator.”

This year’s biggest discounts are focused on emerging markets and Asia.

“These markets have faced an array of headwinds this year, not least from uncertainty over the US election, the trade war between the US and China, global recession, not to mention the pandemic,” Lowcock said.

Now, with many of these headwinds starting to dissipate as we await the new regime in the US, and with vaccines emerging to tackle the coronavirus, there are signs this could be a turning point. Given the scale of the discounts trusts focused on this area are trading on, it could be an opportune time to invest, according to Lowcock.

Your Black Friday deals are…

Fidelity Asian Values – On a discount of 8.8% compared to an average of 1.95% over the past three years. Nitin Bajaj looks for well-run companies with a focus on valuation. Capital preservation is important and he only invests in businesses with a significant margin of safety in the price. The fund is very actively managed and the team pay no attention to benchmarks and have a bias towards smaller companies. This means performance will vary to the index.

JP Morgan Global Emerging Markets Income Trust – On a discount of 6% compared to an average of 5.12% over the past three years. Lead Manager Omar Negyal runs this stock pickers fund. The primary aim is to generate income above the MSCI EM index by looking at earnings growth, dividends, valuation and currencies. The fund invests 60% into companies which can grow dividends and yield 3-6%. The remainder is split between low and high yielding stocks respectively.

Pacific Assets Trust – On a discount of 8.3% compared to an average of 4% over the past three years. Managed by the experienced David Gait who looks to invest in 30-60 companies able to deliver sustainable and predictable growth. The team look for businesses with pricing power, strong franchises, limited regulation but management integrity is paramount. The trust has a sustainability mandate so has limited exposure to energy and materials.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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