Longest period of double-digit discounts for 30 years presents investors with opportunity
Previous periods of deep discounts have led to 13% p.a. returns in next five years.

Investment trusts have traded at double-digit discounts for an unprecedented period, according to research from the Association of Investment Companies (AIC).
The average investment trust, excluding 3i, currently trades at a discount of 14%. The average discount has been wider than 10% since September 2022, peaking at 19% in October 20231.
This means that this period of double-digit discounts has lasted for 29 consecutive months, longer than any previous period of deep discounts since 1996. The second-longest period was between August 1998 and October 2000 (27 months), while the financial crisis saw double-digit discounts persist between September 2008 and September 2010 (25 months)2.
But previous periods of double-digit discounts have ended with those discounts narrowing, contributing to strong returns.
Discounts can spell opportunity when it comes to investment trusts. Our research shows that investing at double-digit discounts is generally good for your pocket, and that message has clearly got through to activist investors like Saba.
Nick Britton, Research Director of the Association of Investment Companies (AIC)

Further AIC research shows3 that the average investment trust excluding 3i returned 86.5% in five-year periods that began with double-digit discounts, compared to the 53.8% return achieved over five years when investing at discounts narrower than 10%.
That’s equivalent to an annualised return of 13.3% over five years when investing at double-digit discounts, compared to 9.0% when investing at narrower discounts.
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Discounts can spell opportunity when it comes to investment trusts. Our research shows that investing at double-digit discounts is generally good for your pocket, and that message has clearly got through to activist investors like Saba.
“The current period of double-digit discounts has been long, but it can’t last forever. Previous periods like this have ended with some combination of market recovery and corporate activity – and there’s no reason to think this one will be any different.
“It can be hard to invest when sentiment is downbeat, but history shows this is usually the best time.”

Source: theaic.co.uk / Morningstar. Ex 3i and VCTs.
Experienced private investors are buying
A study of 212 experienced investment trust investors from Research in Finance4 suggests that they are attracted by the deep discounts on offer. These self-directed investors have been investing in trusts for an average of 16 years and have an average of £536,000 to invest.
Of these investors, 32% expect to invest more in investment trusts over the next six months, 60% expect to invest the same, and only 8% expect to invest less.
When the 32% who expect to invest more were asked why, 50% said it was because of attractive discounts or discounts widening. This was the fourth most commonly cited reason to buy more after the strong performance of certain trusts (59%), good/reliable dividends (51%) and having a more favourable view of trusts generally (51%).
The opportunity to buy at a discount is seen as a benefit of investment trusts over open-ended funds by 62% of respondents to the survey. The only benefit more widely recognised was fund managers not being forced to sell assets to meet redemptions (64%).
Abbie Hines-Lloyd, Associate Director of Research in Finance, said: “Discounts remain a significant factor in what makes investment trusts appealing to private investors, and that’s been the case ever since we launched this study nearly ten years ago.
“Private investors recognise that discounts can offer value and opportunity, making it easy to assess when might be a good time to invest or grow a position. Our research shows that investors at an earlier stage in their investment journey are particularly open to utilising the opportunity discounts provide. However, it is important to note that stubborn discounts can be problematic for those who have already weathered several market cycles, and who may be more focused on cashing in their investment than seeking new buying opportunities.”
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Notes to editors
- Source: theaic.co.uk / Morningstar. All discounts quoted in this press release are discounts of the average investment trust excluding 3i and venture capital trusts (VCTs), based on the most recent available data on investment trusts’ net asset values. Historical discounts quoted today may be different from discounts estimated at the time, because discount data is revised as new valuations for less liquid assets become available.
- Source: theaic.co.uk / Morningstar. Based on month-end discounts. Discounts before June 2008 were calculated on an ex-income basis with debt at par value (“ex par”); since then discounts have been calculated on a cum-income basis
- Source: theaic.co.uk / Morningstar. Based on returns of the average investment trust ex 3i and discounts of the average investment trust ex 3i. The AIC analysed 139 overlapping five-year periods, the first of these beginning on 1 July 2008 and the last beginning on 1 January 2020 (data before 1 July 2008 was not used because cum fair discounts are not available). In 105 of these five-year periods, the starting discount was narrower than 10% and the average return was 53.8%, or 9.0% annualised. In the remaining 34 five-year periods, the starting discount was wider than 10% and the average return was 86.5%, or 13.3% annualised.
- The UK Investment Trust Study (UKITS) is conducted by Research in Finance among private investors. The findings quoted in this release are from the ninth wave of the survey, for which fieldwork took place between 9 and 15 October 2024. A separate part of the study focuses on wealth managers.
- 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 309 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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