Investment trusts have a double edge

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At the moment these funds are more keenly priced than they have been for several years

Readers may feel that I have overdone the discussion on London closed-end funds in recent months. The reason I have concentrated on them so much is that they are a relatively novel asset as far as SA investors are concerned and therefore require a wide introduction.

It’s at times like now, when the current state of equity markets prevail, that a double-edged characteristic of investment trusts comes to the fore. During bear markets, they tend to open up discounts to the underlying asset value.

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