Broker Stifel says the sell-off in the wake of Brexit ‘has thrown up some interesting valuations and opportunities’ in the investment trust space. Specifically among small, mid-cap and real estate focused funds.
The table highlights the trusts which have seen the biggest price declines since the day of the referendum (23 Jun) and comments: ‘We think any UK exit from the EU will take until 2019 at the earliest, with some suggestions that any deal may not be ratified until the next scheduled general election in 2020.
‘Indeed, we wonder if the exit will ever occur, with the possibility of an earlier election and perhaps an alliance of parties standing on a pro-EU platform. Whatever the many scenarios, in the meantime corporates will be focused on profitability and trying to make the most of lower sterling and other opportunities that may arise post-referendum.
‘The managers of the listed funds are also taking advantage of investment opportunities, despite the “political noise”.’
The biggest faller is JPMorgan Mid Cap (JMF). This is unsurprising given the weakness in the domestically focused FTSE 250. In the last 18 months the trust has benefitted by investing in a number of IPOs including Auto Trader (AUTO), WorldPay (WPG) and Ibstock (IBST).