37 of 38 investment company sectors currently are trading at a discount, opening up buying opportunities for investors.
Figures from the Association of Investment Companies (AIC) show that since the beginning of the year the discount of the average investment company has widened more than 10 percentage points – from 3.6% on 31 December 2021 to 14.3% on 18 November 2022. With almost all investment company sectors on a discount, the Association has published a list of average discounts across all equity and alternative sectors (see tables below).
Out of 38 sectors, only the Hedge Funds sector trades at a premium, of 3.8%. The sector is one of this year’s best-performing, with several of its constituents delivering for investors in turbulent times, the AIC said.
The most deeply discounted equity sector is North America, on a 26.5% discount, followed by India on a 14.9% discount and Global Emerging Markets on 12.4%.
Among equity sectors, AIC figures show the biggest discount changes in 2022 have been in the Biotechnology & Healthcare and Technology & Media sectors, where discounts have widened by 9.2 and 8.5 percentage points respectively.
Annabel Brodie-Smith, communications director of the AIC, said: “Discounts are currently wider than usual and this can present buying opportunities. However, investors need to consider whether an investment company’s strategy meets their objectives. They also need to take into account other factors such as the investment company’s performance record, charges and gearing.”
