Our estimate of the number of investment companies trading at a 52-week high discounts over the past week is still relatively low, at 10. But does the appearance of three new names from the equity income and debt sectors signal tougher times lie ahead?

By Frank Buhagiar•04 Jun

We estimate 10 investment companies saw their discounts hit 12-month highs over the course of the week ended Friday 31 May 2024 – two more than the previous week’s eight.

New additions to the Discount Watch List include Diverse Income Trust (DIVI) from UK Equity Income, JPMorgan Global Growth and Income (JGGI) from Global Equity Income and Invesco Bond Income Plus (BIPS) from Debt. Now the discounts of JGGI and BIPS are, at less than -2%, both on the smaller side and what’s more did not prevent either fund from issuing equity over the course of the week. But throw DIVI into the mix and the question is, is the ever-lengthening timeframe for interest rate cuts to some point later in the year starting to have an adverse impact on discounts, particularly in interest rate sectors such as debt and equity income?

It’s a question we asked last week following the appearance of Finsbury Growth & Income (FGT) on the list. FGT’s discount has since narrowed, albeit slightly, but it remains close to year-highs. All eyes on next week then to see if any more equity income funds make an appearance.

The top-five discounters

FundDiscountSectorCeiba Investments (CBA)-68.99%

PropertyLife Science REIT (LABS)-57.73%Property

VPC Specialty Lending Investments (VSL)-43.92%Debt

JPEL Private Equity (JPEL)-40.67%Private

EquityOctopus Renewables Infrastructure (ORIT)-36.12%Renewables

The full list

Fund Discount Sector

Invesco Bond Income Plus (BIPS)-1.97%Debt

VPC Specialty Lending (VSL)-44.95%Debt

Develop North (DVNO)-1.44%Debt

Impax Environmental(IEM)-12.55%Environmental

JPMorgan Global Growth & Income (JGGI)-1.72%Global Equity Income

JPEL Private Equity (JPEL)-40.67%Private Equity

Life Science REIT (LABS)-58.73%PropertyCeiba Investments (CBA)-68.99%Property

Octopus Renewables Infrastructure (ORIT)-36.12%Renewables

Diverse Income Trust (DIVI)-10.03%UK Equity Income