On The Money
The investment trust bargains this pro is backing
Aug 22, 2024
Peter Hewitt, a fund manager specializing in investment trusts, shares his insights on finding bargain opportunities in the market. He discusses his focus on UK equity trusts, private equity trusts, and secular growth trusts to leverage discounts. Peter delves into his investment strategy for the JP Morgan UK Small Cap Growth and Income trust, emphasizing the importance of patience. He also evaluates underperforming trusts, like global smaller companies, advocating for strategic reallocations towards promising investments. Exciting perspectives on Scottish Mortgage and Monks trusts round out the conversation!
21:16
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Quick takeaways
- Investment trusts currently offer significant bargains, with discounts ranging from 8% to 30%, particularly in smaller and medium-sized companies.
- Investors should look for catalysts like lower interest rates and monitor management changes to make informed decisions on investment trusts.
Deep dives
Investment Trust Discounts and Opportunities
The current investment landscape shows significant opportunities in investment trusts, particularly with discounts that have narrowed but remain substantial. Over the past few years, the average sector discount for investment trusts hit highs of 19%, mainly due to rising interest rates and fears of recession, but has since stabilized around 14%. This stabilization, combined with the UK's economic outlook not indicating a recession, has created a more favorable environment for investment. With discounts ranging from 8% to 12% for UK equity trusts, investments in medium-sized and smaller companies are increasingly appealing as their performance has begun to recover.
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