We are probably rather late in the stockmarket cycle. That means there are fewer opportunities to put cash into good-value stocks and funds. This is especially true for investment trusts, where the overall discount of listed funds is near an all-time low. By spring of this year, the average discount to net asset value (NAV, the value of the underlying portfolio) was 2%, compared to double digits after the financial crisis. But there are some exceptions.
Safe-haven assets
Ruffer Investment Company (LSE: RICA)
Capital Gearing
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
(LSE: CGT)
Personal Assets
(LSE: PNL)
BH Global
NB Global Floating Rate Income (LSE: NBLS), as the name suggests, invests in a range of global floating-rate bonds (which have variable interest rates) and loans, and is a not bad each-way bet on rising interest rates or surging inflation. Investors with a little more appetite for risk might consider Schroders Real Estate (LSE: SREI) and European Real Estate (LSE: SERE), both of which are real-estate investment trusts, or Reits. These each trade at sizeable discounts (12.5% and 19% respectively), but are well run with strong track records. And Polar Capital Global Healthcare (LSE: PCGH) is another conservatively-run income-focused fund. Its 8.6% discount seems excessive.
The second group of funds are run by well known active fund managers who've suffered a derating at the hands of the market. In this category we find Scotland-based global emerging-market fund ScotGems (LSE: SGEM), and UK-focused Henderson Opportunities (LSE: HOT), Acorn Income (LSE: AIF), Schroder UK Mid Cap (LSE: SCP) and Downing Strategic Micro Cap (LSE: DSM). These all boast very experienced stockpickers. Many of them operate in the world of small- and mid-caps, where sentiment has turned bearish recently, but each manager has a strong set of defensive skills, and I think the shares are oversold at the moment. I'd also highlight Crystal Amber (LSE: CRS) and Pershing Square (LSE: PSH). Crystal Amber's Richard Bernstein has a great record as an activist, although he's not always successful. Pershing Square's Bill Ackman is also very activist-focused, and has arguably an even better record of realising value. He has a concentrated portfolio of top-tier US quality stocks with a consumer bias. He's tried hard to narrow the discount on the fund, and has recently launched an aggressive share buy-back programme, but the discount remains stubbornly high.
Special situations
Empiric Student Property
(LSE: ESP)
Stenprop
(LSE: STP)
Sticking with this property theme, watch Civitas (LSE: CSH) and Triple Point (LSE: SOHO). Both are active in social housing, especially supported-living projects. Both work with housing associations and operate financial models which have raised questions, but there comes a point where all those concerns are already "in the price". With discounts of between 20% and 26%, we can't be far off that point.
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
