Image Alt

The Investing Box

  /  Editor's Pick   /  5 discounted investment trusts to buy while they’re cheap?

5 discounted investment trusts to buy while they’re cheap?

Close-up of British bank notes

An investment trust will typically trade on a premium or a discount. That is, its shares might be priced higher than its net asset value per share (NAV), which is a premium. Or at less than the NAV, for a discount.

Large discounts usually happen when investors think the value of a trust’s assets is likely to fall. But if we disagree, we might be able to pick up cheap investment trust shares by looking for big discounts.

I’ve been searching for just that, using the handy filtering tools on the Association of Investment Companies website. The following five have caught my eye.


Trust Recent
UK Commercial Property REIT 55p -32% 31%
HydrogenOne Capital Growth 74p -26% 23%
Target Healthcare REIT 80p -26% 21%
Baillie Gifford US Growth Trust 165p -29% 17%
Scottish Mortgage Investment Trust 769p -27% 16%

I can see why most of these are out of favour. Scottish Mortgage invests in growth stocks, mostly listed on the US Nasdaq index. And a lot of those have been through a tough patch. Tesla, Moderna, Amazon… those three figure among the trust’s top 10 holdings. Do we think Nasdaq stocks are forever in the dumps? I don’t. I think they’ll get back to long-term growth.

Baillie Gifford US Growth is very similar. It invests in the same kind of Nasdaq stocks. And its shares have performed pretty much the same over 12 months.

Bricks and gas

Target Healthcare is an interesting one. It’s a real estate investment trust (REIT), so the property squeeze will have had an effect. But it’s more than just an investment in property values. Target holds a portfolio of freehold and long leasehold care homes, which bring in long-term rentals. I think that focus provides safety.

UK Commercial Property REIT though, is exposed to property and to UK commercial pressures as we head into a recession. There’s a bit of a double whammy there. And it’s led to the hardest share price fall and biggest discount of the five. But is commercial property consigned to lifelong poor performance now? Or might the trust have a profitable long-term future pursuing a combination of growth and income?

I also noticed HydrogenOne Capital Growth, one I’ve never really looked at before. It invests in hydrogen and related assets, as the name suggests. And it’s targeted towards the renewable energy market, and the future of hydrogen for energy storage. I think it’s possibly the riskiest of the five, as it’s in a highly competitive business. And HydrogenOne is only a small trust, with a market-cap of just £95m.


Scottish Mortgage is the only one of these I’ve researched in any detail, and I bought some. I expect more volatility from it in the next couple of years. But I’m happy to take the risk for what I see as its long-term potential.

The others all face their own individual risks, and investors should do their own research. But with those enormous discounts, I can’t help wondering how a portfolio of all five might perform over the next 10 years. Pretty well, I suspect.

The post 5 discounted investment trusts to buy while they’re cheap? appeared first on The Motley Fool UK.

5 stocks for trying to build wealth after 50

Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#ffffff”, ‘color’, ‘#FFFFFF’);

More reading

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Alan Oscroft has positions in Scottish Mortgage Investment Trust Plc. The Motley Fool UK has recommended and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.