11 unloved trusts worth a closer look

trust-painted-inside-a-heart

Cherry Reynard takes a look at a selection of out-of-favour investment trusts that could be worth following.

Read our tips on picking the right unloved investment trust for a wider analysis.

TEMPLE BAR

Manager Alistair Mundy, manager of Temple Bar, is the contrarian's contrarian, investing in undervalued, out-of-favour companies with strong balance sheets.

He believes that the most predictable behavioural response of investors is their over-reaction to negative news and this provides an opportunity to buy shares at discounted prices.

EUROPEAN INVESTMENT TRUST

European Investment Trust aims to buy undervalued companies. Manager Dale Robertson believes investors spend too much time focusing on short-term quarterly and annual data; instead, he concentrates on a longer-term, five-year horizon.

The trust trades on a 12 per cent discount, against a 12-month average of 6.5 per cent.

JPMORGAN GLOBAL EMERGING MARKETS INCOME

Run by the well-respected team at JPMorgan under Richard Titherington, the discount of JPMorgan Global Emerging Markets Income has spiked from the start of the year, and is 7 per cent versus a 12 month average of 3.5 per cent.

ARTEMIS ALPHA

Managed by John Dodd, Artemis Alpha invests in smaller companies, but will also invest up to 30 per cent in unquoted companies, hedge funds, cash and bonds. The discount currently sits at 24 per cent.

BLUE PLANET

Blue Planet, managed by the eponymous Malta-based specialist firm, has seen a jump since January, but still trades at a 34 per cent discount to net asset value. It invests in financial companies globally, but with the largest weight in the UK.

INTERNATIONAL BIOTECHNOLOGY

Managed by SV Life Sciences, International Biotechnology offers investors the opportunity to invest in the growing biotechnology sector, which is creating innovative medicines that treat unmet medical needs.

It is currently on a 14 per cent discount, wider than the sector average, in spite of strong performance.

HERALD

Herald invests mainly in UK-quoted smaller companies in the areas of telecommunications, multimedia and technology. It is currently on a 20 per cent discount against a 12-month average of 18 per cent.

ABERFORTH SMALLER COMPANIES

The value-focused Aberforth Smaller Companies has had a more difficult run of performance recently, but the group has one of the largest specialist teams in the market and the shares trade on a 14 per cent discount to NAV.

MURRAY INTERNATIONAL

Managed by Bruce Stout since 2001, Murray International was over-exposed to emerging markets during the downturn, which hurt performance and saw the trust's 10 per cent share price premium move to a discount (around 5 per cent).

LOWLAND

Managed successfully by James Henderson since 1990, Lowland's shares are currently trading at a discount of 3 per cent, having previously traded at around par. The trust incorporates smaller and medium-sized companies.

BLACKROCK WORLD MINING

A large company-focused resources trust, run by the well-respected team at BlackRock. BlackRock World Mining currently has a yield of over 9 per cent (though this may be cut) and is on a 12 per cent discount. One for the brave.


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