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Temple Bar's steady income at a rare discount

Temple Bar Investment Trust is at its widest discount to NAV in years, so now could be a good time to buy in.
April 29, 2015

In this week's Big Theme we highlight recent shifts in investment trust discounts and premiums to net asset value (NAV) in the Association of Investment Companies (AIC) UK Equity Income sector. Many of the trusts in this sector were on premiums due to investors searching for income amid low interest rates and bond market concerns, however these have now swung out to discounts.

1188p
Tip style
Income
Risk rating
High
Timescale
Long Term
Bull points
  • Rare discount to NAV
  • Good long-term performance
  • Low charge
  • Possible downside mitigation
Bear points
  • Poor short-term performance
  • Yield not as high as some peers

One of the more notable movers has been Temple Bar Investment Trust (TMPL). This had consistently traded at a premium since 2011, but this year has moved to a discount of more than 5 per cent. There is a good reason for this, as well as the sector trend: the trust has struggled over the past 18 months, and so failed to beat its sector average and the FTSE All-Share over one year.

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