Westhouse Securities’ Paul Locke has said investors should consider taking profits from the Aberforth Smaller Companies trust given the price of its shares compared with peers.
The trust’s shares trade at a 6.2 per cent discount to the net value of its assets, but Mr Locke said this was a “significant premium” to the sector as a whole where the weighted average discount was 10.5 per cent.
“We would recommend taking profits on Aberforth at these levels, although we note the fund’s discount volatility has been extremely attractive for shorter-term investors over recent months,” he said.
“Strategic Equity Capital also looks prone to profit taking here, a fund that, it should be remembered, commanded a peak discount of more than 60 per cent in 2008.
“However, for longer-term asset allocators we continue to recommend Strategic Equity Capital and note that it is one of the few vehicles that offers true smaller companies exposure and has continued to add value at the net asset value level in recent months, in spite of often intense market volatility.”
