According to the firm, recent instability on the markets has widened discounts for investment trusts creating good buying opportunities for investors. It says these wide discounts are not necessarily an indication of reduced underlying value but are more closely related to market sentiment.
JPMorgan Asset Management Investment trusts head of sales and marketing James Saunders Watson says: “The prospect of buying a share at a reduced rate is very appealing. For instance, purchasing £1 of assets for 85p is something that should be attractive to most investors.”
“Obviously there is a risk implied in that a discount could widen further, but the underlying value of the share is likely to remain unchanged. Investment trusts are designed to be long term investments, so the case in favour of buying at a discount now means over the medium to long term returns are expected to be heightened.”