A terrible six months for investment trusts
It has been a terrible six months for investment trusts. The FTSE All Share Closed End Investments index slumped by 18.9% compared with a fall of 4.6% for the FTSE All-Share index. Compared with global equities, the performance is better as the MSCI All Countries World index lost 11% in sterling. With the average discount to net asset value (NAV) in the sector widening to 9.8% from 1.5%, the underlying assets performed broadly in line with global equities.
After a stunning 2020, 2021 hadn’t been a great year, with the Closed End Investments index returning 12.8%, compared with 19.6% for the MSCI index. That was despite a fall in average discounts, but this year it seems that investors are losing faith in the investment-trust structure.
Value has eclipsed growth
Equity trusts had become increasingly focused on “growth” investing – partly the result of
