Why it's a good time to cash in on commodities

Buy into an investment trust now and you could snap up shares in companies you like below market value. We reveal where to find discounted funds in the still-attractive commodities sector.

You won't hear much about investment trusts from the typical financial adviser, mainly because they don't pay any sales commission. But shares in these stock-exchange listed trusts should be of interest to every funds investor. Not only do they charge lower fees than unit trusts, but if you buy at the right time, they give you the chance to snap up shares in companies you like at below face value. And right now is just such a time.

"In periods of market turmoil, there can be a disconnect between a closed-end fund's [investment trust's] stock performance and that of its underlying net asset value," says Martha Metcalf, a managing director at Credit Suisse, in The Wall Street Journal. In other words, as investors sell shares in an investment trust, its value falls below that of its underlying portfolio this is known as trading at a discount.

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