EU investment trusts miss out on share price returns

European investment trusts continue to trade at “relatively wide” discounts in spite of strong net asset value (NAV) gains in 2012, according to Winterflood Securities.

Winterflood’s latest quarterly report found that although six Europe-focused investment trusts appeared in the top 20 trusts in terms of NAV performance in Q4 of 2012, none were in the top 20 in terms of share price returns.

The TR European Growth Trust, a £235m smaller companies trust managed by Ollie Beckett at Henderson, was the best-performing European fund last quarter, returning 10.1 per cent, but it is still sitting of a discount of over 20 per cent.

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Winterflood also highlighted John Bennett’s £143.5m Henderson European focus trust, which has a discount of 9 per cent but was not a top NAV performer despite gaining over 20 per cent in 2012.

“We believe there are a number of European investment trusts that continue to offer attractive value particularly in the event of a continued upturn for European equities,” said Winterflood.

The report also said European investment trusts had outperformed their open-ended equivalents consistently over the last ten years.

Overall, investment trusts outperformed their open-ended equivalents in 14 out of the 15 sub-sectors during Q4 of 2012, all except the North American sector.