FTAdviser.com

Advertising

Simon Elliott, head of research at Winterflood Investment Trusts, said there were a number of positive signs emerging in the investment trust sector.

He said: "It is too early to pronounce the wider sector in rude good health but certainly those who opined that the sector faced a fight for survival last year appear to have been wide of the mark.

"We believe that the advantages of the listed closed-end fund structure remain despite the perennial problem of discounts."

Mr Elliott said the amount of fund raising among specialist asset classes reflected their suitability for the closed-end fund structure.

New closed-end fund of hedge funds, BlackRock Hedge Selector fund, which provides investors with access to Richard Plackett’s UK small cap hedge fund, has raised £48.7m after launching at the end of last month.

However, despite the outlook for investment trusts improving somewhat, the average non-alternatives investment trust discount widened to 9.6 per cent wider than the 8.5 per cent average over the last 12 months.

Mr Elliott said: "This is counter-intuitive to a degree as strong market conditions normally attract retail investors which in turn have historically driven discounts tighter.

"We suspect that hedge funds will continue to see discounts steadily narrow as the sector shrinks while global funds tend to offer mainstream, liquid exposure."