AIC releases 53 years of investment trust discount history
The data paints a picture of how investment trust discounts have changed over more than half a century.
The Association of Investment Companies (AIC) has released data for the average investment trust discount going back to 1972.
The monthly data begins on 29 December 1972 and is sourced from Morningstar. Calculated by the AIC using a consistent methodology over a 53-year period1, it paints a picture of how investment trust discounts have changed over more than half a century.
Average investment trust discount, 1972-2025
Source: theaic.co.uk / Morningstar (see Notes to editors for methodology)
Double-digit discounts persisted for a period of 16 years, 6 months, between December 1972 and June 1989. There was another extended period of double-digit discounts between June 1997 and January 2001, of 3 years, 7 months. The current period of double-digit discounts, beginning in May 2022, has so far lasted 3 years, 7 months (to December 2025).
The widest ever average discount was recorded in October 1976, a discount of 41%. This was the month of a terrorist bombing of a Cuban flight from Barbados to Jamaica, which killed all 73 people on board.
Investment trust boards are not complacent about discounts. We’ve seen record levels of share buybacks and corporate activity over the past few years. Investors should bear in mind that historically, investing during periods of double-digit discounts has tended to lead to better returns over the following five years.
Nick Britton, Research Director of the Association of Investment Companies (AIC)
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “In the 1970s and 1980s, investment trusts generally traded at double-digit discounts. Discounts were narrower through most of the next two decades, though they widened during the financial crisis. The 2010s was the one decade when investment trust discounts averaged less than 10% over the ten-year period.
“Of course, things have moved on a lot since 1972. The change in legislation in 1999 to allow investment trusts to buy back their own shares has helped many trusts trim their discounts. Increasing competition from other fund structures, such as ETFs, has changed investors’ expectations about what level of discount is acceptable.
“Investment trust boards are not complacent about discounts. We’ve seen record levels of share buybacks and corporate activity over the past few years. Investors should bear in mind that historically, investing during periods of double-digit discounts has tended to lead to better returns over the following five years.”
A historical perspective
Discounts were very wide during the 1970s, averaging 26% over the period for which we have data2. This was a decade of high inflation, high unemployment, stagnant growth and oil shocks.
Things improved a little in the 1980s, with an average discount of 20%. The relatively benign conditions of the 1990s brought the average discount to 10%, where it stayed during the following decade. During the 2010s an environment of low interest rates and high demand for income-paying investment trusts brought the average discount to 8%, while so far this decade it has averaged 13%.
The narrowest ever average discount of 2% was recorded in December 1993. The UK had emerged from the recession of the early 1990s and the aftermath of Black Wednesday in 1992, and was enjoying a period of lower inflation and falling interest rates.
For information on current investment trust discounts, please get in touch with the AIC.
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Notes to editors
- Source: theaic.co.uk / Morningstar (underlying constituent data sourced from Morningstar and checked and cleaned by the AIC). The discount data referred to in this press release is based on unweighted averages of all investment trusts for which the AIC has data, excluding VCTs. The discounts are calculated using ex-income NAVs with debt at par value (known as “ex par discounts”). Current AIC discount data, displayed on the AIC’s website and quoted in other press releases and materials from the AIC, is based on market capitalisation weighted averages, and discounts are calculated using cum-income NAVs and debt at fair value (known as “cum fair discounts”). Cum fair discounts became the industry standard in 2008 and are not available before this date, hence the use of ex par discounts in this release to provide a continuous 53-year history.
- The average discounts given for each decade are unweighted averages of the average investment trust discount at each month end over the entire decade, or the portion of the decade for which we have data.
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 281 members and the industry has total assets of approximately £269 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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