JPMorgan highlights investment trust opportunities

Investment trusts are currently offering cheap investment opportunities, according to JPMorgan Asset Management (JPMAM).

As a result of market volatility, discounts for investment trusts have widened and are providing investors with very attractive buying opportunities. Such wide discounts are not necessarily an indication of reduced underlying value but are more closely related to market sentiment.

Discounts on some JPMAM own investment trust are currently at around 10pc to 15pc, despite the fact the underlying value of the investment trust is much higher. For example, JPM American investment trust is currently trading at a discount of around 9pc and a share price of around 633p, whilst the net asset value is 697p. Similarly, JPM Smaller Companies investment trust is trading at nearly 15pc discount, with a share price of around 401p and a net asset value of nearly 472p.

James Saunders Watson, head of sales and marketing for investment trusts at JPMAM, said: "The prospect of buying a share at a reduced rate is very appealing. For instance, purchasing £1 of assets for 85pc 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."

He added that investment trust are designed to be long term and that over the medium to long term returns are expected to be heightened.

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