Archived article: Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The number of London-listed investment trusts trading at a premium to the underlying value of their assets has moved higher this year as investors show greater willingness to pay up for certain strategies.
There are currently 24 investment trusts trading at a premium to net asset value, up from 19 at this time last year but still some way off levels seen a decade ago. Back then, 88 investment trusts were on a premium, equal to nearly one third (29.7%) of the investment universe at the time (end of May 2015), according to data from the Association of Investment Companies.
Which investment trusts are trading at a premium?
Trusts currently commanding a premium rating are ones that either specialise in income, have a track record of beating the market, or provide access to unique, unusual or scarce assets.
| Investment trusts trading on a premium to NAV | |||
|---|---|---|---|
| Trust | Premium | Trust | Premium |
| JPMorgan Emerging Europe, Middle East & Africa | 310.8% | City of London Investment Trust | 1.3% |
| British & American | 72.3% | Income Bond Income Plus | 1.3% |
| 3i Group | 61.0% | CT Global Managed Portfolio Income | 1.2% |
| Doric Nimrod Air Three | 19.2% | TwentyFour Select Monthly Income | 1.0% |
| CQS New City High Yield Fund | 4.0% | M&G Credit Income | 0.9% |
| CT UK High Income Trust | 3.8% | Invesco Global Equity Income Trust | 0.8% |
| Henderson Far East Income | 3.7% | Achilles Investment Company | 0.7% |
| Rockwood Strategic | 3.1% | AVI Japan Opportunity Trust | 0.6% |
| Ashoka India Equity | 2.0% | Aberdeen Equity Income Trust | 0.5% |
| Law Debenture | 1.8% | Onward Opportunities | 0.4% |
| Shires Income | 1.5% | Ashoka WhiteOak Emerging Markets | 0.4% |
| TwentyFour Income Fund | 1.5% | Fair Oaks Income 2021 | 0.3% |
| Source: AJ Bell, AIC. Data as of 23 June 2025. | |||
Income trusts
Rates are starting to come down on cash savings accounts and that’s driving more income-hungry individuals back into equities and bonds in the search of better yields.
Investors can see a scenario where central banks continue to cut rates and that spells less generous interest on cash in the coming years. In contrast, equity income-focused investment trusts offer the potential not only for decent yields for years down the line but also a growing stream of dividends.
Furthermore, the investment trust structure also enables a smooth ride with dividends as trusts can keep money in reserve to top up income payments in harder times.
Premiums for income-focused trusts are typically below 4%, a level which certain investors might think is not excessive. Yet the fact some of these trusts are trading at a premium today is a significant change compared to recent history.
For example, Invesco Global Equity Income often traded in the region of a 12% discount to NAV in 2023 and 2024. It now trades slightly above NAV, a status it hasn’t seen for four years. That’s partly down to a restructuring last year where various versions of the Invesco Select Trust were merged into one to create Invesco Global Equity Income, sharpening the focus and enhancing the dividend. The other is down to its ‘all-weather’ approach to income investing which has appealed to investors in a choppy market environment, together with strong performance from many of the underlying holdings.
Trusts with a solid track record
With so much uncertainty in the world, investors are looking for trusts with a tried and tested method of achieving positive results. They’re happy to pay up for names that can demonstrate success wasn’t simply down to one lucky year.
City of London Investment Trust is a popular holding with people in retirement thanks to its ability to run a portfolio that has beaten the market on many occasions in the past, while also offering a decent yield.
Over the past 20 years, City of London Investment Trust has delivered a 418% total return versus 283% from the broader UK stock market, as measured by the FTSE All-Share index. It traded at a premium for most of 2021 until 2023 but last year slipped to 3% approximate discount. It’s now back in premium land as more investors warm to the UK stock market, helped by it having beaten many other markets globally so far in 2025.
City of London Investment Trust is effectively a ‘best ideas of the FTSE 100’ investment vehicle and it’s benefited from owning many of this year’s best performing UK stocks.
Trusts offering something rare, unique or unusual
Private equity investor 3i has long traded on a premium because it’s the only way for investors to get exposure to Dutch discount retailer Action.
If you thought Aldi and Lidl were the only disruptive forces in retail, think again. Action is growing fast and has all the hallmarks of Amazon in its early days. Its products are considerably cheaper than those of competitors and it constantly reinvests money back into the business to help it grow even bigger.
Action now has significant buying power, and the focus is on the long-term prize of becoming a much bigger business, rather than how much profit it can generate today. 3i owns 57.9% of Action and investors buying its shares are fundamentally taking the view that the investment in the retailer will be worth considerably more in the future.
Hidden value?
JPMorgan Emerging Europe, Middle & Africa trades on an astonishing 310% premium to NAV. That reflects a view by some investors that its Russian assets are not worthless.
Formerly called JPMorgan Russian, the trust switched strategy after the Ukraine war and it essentially wrote down the value of its legacy Russian holdings to near-zero.
There is a suggestion that investors have recently been piling into the trust as a bet on Donald Trump ending the war in Ukraine and that Russian assets will be unfrozen.
Dan Coatsworth: Head of Markets
Dan Coatsworth is AJ Bell's Head of Markets. Dan has been with the company since December 2012 and has more than 18 years' experience in the industry, following the markets and all things investing. He...
