Investments  

Investment trusts and the discount hurdle

    CPD
    Approx.30min

    Of course for all the attention that discounts/premiums attract, one thing is often forgotten: if the share price goes up, investors make money – it’s as simple as that.

    Discounts and premiums do matter, but it is not so much the absolute level that matters, but more discount volatility. Fortunately, the investment company sector has come on leaps and bounds over the last decade in addressing this issue.

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    CPD
    Approx.30min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. What is meant by the term ‘closed ended’ investment company structure?

    2. What is the advantage of the closed ended structure?

    3. Why do investment companies not trade at net asset value?

    4. How is the net asset value per share calculated?

    5. Under what circumstances is an investment company said to be trading at a discount?

    6. Under what circumstances is an investment company said to be trading at a premium?

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