Should investors worry about investment trust discounts?

Investment trusts tend to trade at discounts to their net asset value, but the advantages that come with them mean this matters less to some investors

woman using smart phone at home, watching share price chart perhaps of an investment trust
(Image credit: izusek via Getty Images)

One of the distinctive features of investment trusts is that they are closed-ended funds, and as such have a fixed number of shares. This means that investment trusts can trade at a discount to their net asset value (NAV).

By contrast. the number of available shares in other funds, like an open-ended investment company (OEIC) or an exchange-traded fund (ETF), increase and decrease in accordance with their NAV.

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Dan McEvoy
Senior Writer

Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.