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.
Investment trust boards have a number of levers they can pull to increase demand for their shares and try to ensure share prices remain close to NAV. One key attraction for investors is the dividend. As such, we regularly see boards increase dividends, change payout policies or make numerous other changes to how and when dividends are paid, with the implicit (or sometimes explicit) aim of keeping the discount in. We decided to test one thesis that has been put to us: do trusts with more frequent dividends achieve narrower discounts?
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