By JOHN SPIERS 22/11/2002
The combination of a long Bear market and the bad publicity attracted by Split
Capital trusts has led to a down rating of most investment trusts, with discounts
in some sectors reaching their highest levels for years.There are several trusts
that have traditionally traded at a premium to net aset value on the back of
the strong track record of the manager but can now be purchased at useful discounts.
This presents an interesting opportunity to switch from similar unit trusts,
or to invest new money while prices are depressed. Examples of trusts that Bestinvest
recommends include:
AiM Trust: the AiM market has
fallen faster than most over the past two years and this has badly affected
sentiment. Current discount is over 29%.
Jupiter European Opportunities:
almost identical portfolio to the Jupiter European unit trust also run by Alex
Darwall. Discount is over 10% but in recent times the trust has commanded a
premium.
Gartmore European: similar
portfolio to that of the European Selected Opportunities fund also run by Roger
Guy. Discount is now over 11%.
Invesco Continental Smaller Cos:
run by Claire Griffiths who is also responsible for the European Smaller Companies
unit trust. Current discount is over 25%.
Tribune Index: the cheapest
All Share tracker, now on a discount of 8%.
Edinburgh US Tracker: most
actively managed US funds fail to beat the index. This trust stands on a discount
of 8%.
Please note that investment trusts are usually riskier than unit trusts because
they can use gearing and the share price discounts vary from day to day. Never
buy an investment trust without checking the terms at the time.