Tags
capital, finance, investment, Investment trusts, money, NAV, net asset value, overvalued, shares, stock, undervalued
Investment trusts are limited companies whose business consists mainly of the investment of shareholders funds. Investment trusts differ in terms of the shares they invest in. Some may choose a small amount of shares from a specific field (such as Technology) whereas others may invest in a large amount of shares across many industries.
Trusts are different from funds as they are listed on a stock exchange.
One of the most important points to consider when choosing a trust is to see whether it is undervalued or overvalued. Trusts usually charge a percentage fee for their service and the amount you pay depends entirely on the investment trust. This comparison can be found by comparing the investment trusts’ NAV (Net Asset Value) per share to its share price. If the NAV is greater than the share price then the investment trust is trading at a discount. If the NAV is lower than the share price then the investment trust is trading at a premium
Standard life explains about investment trusts in more detail. See link below.
Another good link is below.
http://www.whatinvestment.co.uk/investment-trust-discounts-should-you-buy-2249863/
Techniques and Principles: Capital Markets & Portfolio Management 