The average investment trust discounts have remained in double-digits for 29 months, the longest period in 30 years.
The Association of Investment Companies said this “unprecedented period” of discounts presents an opportunity.
The average investment trust currently trades at a discount of 14 per cent and discounts peaked at 19 per cent in October 2023.
The last long spell of double-digit discounts was during the financial crisis where discounts persisted for 25 months and before that 27 months of large discounts were recorded between 1996 and 1998.
Nick Britton, research director of the AIC, said: “Discounts can spell opportunity when it comes to investment trusts.
“Our research shows that investing at double-digit discounts is generally good for your pocket, and that message has clearly got through to activist investors like Saba.
“The current period of double-digit discounts has been long, but it can’t last forever. Previous periods like this have ended with some combination of market recovery and corporate activity – and there’s no reason to think this one will be any different.”
Research from the AIC found that investment trusts offering high returns started with double-digit discounts.
It showed the average trust returned 86.5 per cent in five-year periods that began with double-digit discounts, compared to the 53.8 per cent return achieved over five years when investing at discounts narrower than 10 per cent.
Britton added: “It can be hard to invest when sentiment is downbeat, but history shows this is usually the best time.”
tara.o’connor@ft.com
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