Page 44 - DIY Investor Magazine | Issue 36

Dec 2022 44
DIY Investor Magazine ·
TRUSTS HAVE THEIR
OWN BLACK FRIDAY SALE
Discounts have widened significantly since the start of this year but the latest press release from the AIC puts it into perspective.
The average discount has gone from 3.6% to 14.3%; an increase of 10.7% and pretty much the widest since the financial crisis apart from a short-lived spike down below 20% during the initial COVID crash.
The FTSE Closed End Index is down around 15% this year, so you could argue that around two-thirds of this is due to widening discounts with the remainder down to a fall in net asset values.
SOME SECTORS HAVE BEEN SAVAGED
When you look at individual sectors and trusts, there are wide variations; the AIC looked at how sector discounts have moved over the course of 2022. These figures are a weighted average based on market capitalisation so the discounts of the largest trusts like Scottish Mortgage, 3i, and Pershing Square matter much more than the tiddlers.
The list is split into equities and alternatives but ignores sectors where there are only one or two trusts; 20 out of 330 trusts are excluded from the sector analysis, the largest being Hipgnosis Songs, TR Property, Target Healthcare REIT, Impact Healthcare REIT, Polar Capital Global Financials, and Round Hill Music.
These have all seen their discounts widen, quite significantly in some cases, and are included in the average figures for all trusts.
EQUITY SECTORS
Sector
Discount on 18 Nov 22 (%)
Discount on 31 Dec 21 (%)
6.7
Change since 31 Dec 21 (% pts)
-8.0
1.1
0.5
-2.3
-5.2
-2.1
-6.4
-9.2
-2.5
-1.5
-6.0
-0.9
-8.5
-2.8
-7.5
7.2
-7.8
-3.1
4.9
-3.7
-10.7
-2.0
Environmental -1.3
Global Equity Income
UK Equity Income
Japan
Global
Asia Pacific Equity Income
Japanese Smaller Companies
Biotechnology & Healthcare
Europe
UK All Companies
Asia Pacific
European Smaller Companies
Technology & Media
UK Smaller Companies
China / Greater China
Country Specialist
Global Smaller Companies
Asia Pacific Smaller Companies
Commodities & Natural Resources
Global Emerging Markets
All sectors
India
-1.6 -2.7
-3.5 -4.0
-5.4 -3.1
-6.0 -0.8
-6.1 -4.0
-8.0 -1.6
-8.2 0.9
-8.8 -6.3
-9.1 -7.6
-9.8 -3.8
-9.8 -8.8
-10.3 -1.8
-10.8 -8.0
-10.9 -3.4
-11.1 -18.3
-11.5 -3.8
-11.9 -8.8
-12.0 -16.9
-12.4 -8.7
-14.3 -3.6
-14.9 -12.9
-5.4 North America
-26.5 -21.1
Source: www.theaic.co.uk / Morningstar. Weighted averages for AIC sectors with at least three constituent companies.
There are no equity sectors at a premium, although there were only two at the start of the year — environmental and biotech/ healthcare.