Fidelity is considering ways to satisfy the demand for Anthony Bolton’s China special situations investment trust, which is trading at close to 13 per cent premium to its net asset value.
A statement from the trust says: “Due to the consistently high levels of market demand, the shares of the company are currently trading at a significant premium to their net asset value. The board are considering ways in which this demand can be satisfied.”
Hargreaves Lansdown investment Manager Ben Yearsley says: “The answer has got to be issuing more shares as that will dampen down the demand. If they issue more shares, then the share price will fall back but over the long term it is net asset value growth that will drive the returns.”
Winterflood Investment Trusts analyst Simon Elliott says: “Normally, what you would see is a C-share issue done at a small premium to the share price. This could even provide a small incremental uplift.”