Investment trust shares trading on a large discount to net asset value (NAV) can either be a great bargain or a sign that something is seriously wrong. After two years of persistent discounts, it is easier to see which is which. Among the casualties have been Home REIT, Digital 9 Infrastructure and ThomasLloyd Energy: trusts now all but worthless. But all ended well for investors in Hipgnosis, whose shares more than halved in price between 2021 and March 2024 to 60p before being taken private by Blackstone at a little over £1.
Chrysalis’s share price has nearly doubled in the last two years, but at 98p it still trades at a 33% discount to NAV and 63% below its 2021 peak. However, Schroders Global Innovation Trust, formerly Patient Capital, trades at 11p, scarcely above its low. It may seem that the latter, on a 45% discount, has more upside, but that NAV continues to fall while Chrysalis is reporting positive developments in two of its largest holdings, Klarna and Starling Bank.