Disclaimer
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
Discounts have widened across the sector: what lessons can we glean from this annus horribilis? Undoubtedly, some trusts will have tripped themselves up in this very unique year, but others, despite having played a credible defence, still saw discounts widen. Specifics aside, we examine a number of different characteristics of trusts, other than their sector, that may have influenced the widening of discounts. History rarely repeats itself, but it does rhyme. We hope that our analysis may help investors better identify where the risks to discount widening exist, in the hope that next time around they might be able to better insulate themselves from this risk. Conversely, those trusts that have seen their discounts widen year to date, potentially stand to benefit the most from discount narrowing when we pass out of the bear phase of the stock market cycle and back onto more solid investment ground. At the very least, 2022 has provided some good lessons for life to pass on to your grandchildren.
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