Watch List

Discount Watch

At 16, the number of investment companies trading at 52-week high discounts to net assets continues to be relatively stable. Most fall into one of three categories: alternatives and UK-focused trusts feeling the effect of elevated bond yields and emerging markets funds worried about what a Trump Presidency means for them. Not all belong to a theme. At least one had its own very specific reason.

By Frank Buhagiar

We estimate there to be 16 investment companies that saw their share prices trade at 52-week high discounts to net assets over the course of the week ended Friday 06 December 2024 – one less than last week’s 17.

In line with previous weeks, the majority of names on the latest Discount Watch loosely fall into three categories. Alternatives are still the dominant group with seven names – four renewables, two property companies and one debt fund – concerns higher bond yields will lead to higher discount rates, which would impact valuations, could be at play here. Emerging markets, such as Vietnam, could be hit hard if Donald Trump goes through with his threat of higher tariffs on imports. And UK-focused funds, a higher-for-longer interest rate narrative following the high spending/high borrowing Budget appears to be weighing on sentiment.

One new name on the list which doesn’t require much digging to explain its appearance – Weiss Korea Opportunity (WKOF). Tuesday 3 December’s surprise announcement by South Korean president, Yoon Suk Yeol, that he was imposing martial law (later rescinded) has triggered a wave of uncertainty across the country. What that means for WKOF’s ongoing strategic review remains to be seen. This was launched after its investment manager, Weiss Asset Management LP, admitted that it believes the “opportunity set and strategy for the fund continuing in its current form is less attractive than it has been in the past” and that “it does not think this change in circumstances is likely to improve in the foreseeable future.” Presumably, the investment managers have not changed their view.

The top five

Fund Discount Sector

HydrogenOne Capital Growth HGEN-78.0%Renewables

Ceiba Investments CBA-74.9%Property

VPC Specialty Lending Investments VSL-50.0%Debt

Aquila Energy Efficiency AEET-46.1%Renewables

Care REIT CRT-31.0%Property

The full list

Fund Discount Sector

Golden Prospect GPM-26.50%Commodities & Nat. Resources

VPC Specialty Lending Investments VSL-50.00% Debt

JPMorgan Global Emerging Markets Inc JEMI-14.40%Emerging Market

Impax Environmental Markets IEM-17.30%Environmental

BlackRock Greater Europe BRGE-8.30%

EuropeWeiss Korea Opportunity WKOF-10.20%Korea

Care REIT CRT-31.00% Property

Ceiba Investments CBA-74.90%Property

Aquila Energy Efficiency AEET-46.10%Renewables

Foresight Solar FSFL-29.40%Renewables

HydrogenOne Capital Growth HGEN-78.00% Renewables

Renewables Infrastructure Group TRIG-26.70% Renewables

Aurora UK Alpha (ARR)-14.20% UK All Companies

Murray Income MUT-13.30%UK Equity Income

BlackRock Smaller Cos BRSC-9.60%UK Smaller Companies

VinaCapital Vietnam Opportunities VOF-26.70%Vietnam