- Cheap trusts could be facing tough decisions
- Potential bargain entry points
Human tragedies are forcing geopolitics depressingly high up the list of investor concerns and that could force a rethink of powerful narratives like the pivot to Asia. It’s quite possible our investment trust screen is wrong-footed by the new global security paradigm as it has been by the secular change in monetary policy. The onus must now be on reviewing trusts’ investing strategies and how they are positioned for the challenges in their areas of focus.
Discount control mechanisms, takeovers, mergers and possibly wind-ups are all on the table as the investment trust sector continues to consolidate. The worst of the discount blow-outs appear to be behind us but trusts’ market capitalisations are in many cases too far short of funds’ net asset values for the comfort of trust boards.
