Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
Discounts are one of the most defining features of investment trusts and a key differentiator to other investment vehicles, offering the potential to boost returns - sometimes significantly. Following a particularly challenging 2023, discounts have blown out almost across the board leading investors to debate which pool of assets they should buy for below their underlying value. The Z-score is a popular statistical tool for identifying value, but we believe it has lost context when everything is so depressed. In the article below, we have analysed ten years’ worth of discounts to not only establish what sectors are cheap, but whether a narrowing discount will actually drive future returns.
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