Scottish Investment Trust discount

[Jonetc15]

For some time I’ve thought about investing in Scottish Investment Trust, which is currently on a discount of 9.2% (Saturday’s FT). I wonder if I’m correct in thinking that this is larger than SIT’s historical average and the reason for it. Would it be (for example) partly because of unquoted investments?

Any comments will be gratefully received

Jon

[mc2fool]

For some time I’ve thought about investing in Scottish Investment Trust, which is currently on a discount of 9.2% (Saturday’s FT). I wonder if I’m correct in thinking that this is larger than SIT’s historical average and the reason for it. Would it be (for example) partly because of unquoted investments?

I'm not familiar with and haven't looked into Scottish Investment Trust, but on a quick glance at the AIC's performance page for it, http://www.theaic.co.uk/companydata/148/performance, it looks like the discount is actually a bit smaller than it has been for most of the past year or so, and is around the average before that.

(Hint: while the chart at the bottom shows the discount, the top chart becomes, IMO, clearer if you turn off the two benchmarks and also click on Chart Settings - Plot Types - Price)

In terms of discounts relative to historical averages, the measure is called the Z-score or, by Morningstar which includes them in its stats page on each IT, Z-stats. Explanation here: http://www.morningstar.co.uk/uk/investm ... cid=357229

In googling I found this CityWire article about Scottish Investment Trust that you may find of interest. http://citywire.co.uk/money/investment- ... 17/a978096

[Dod1010]

Bear in mind that SIT has recently had a wholesale change in its investments plus a new investment management team and a change of chairman. I have not held it for some time but I got fed up of it when its discount was certainly at least 9% a few years back. I read somewhere not so long ago that the new investment policy had brought the discount in but apparently not. In the same article the manager said he was looking for 'ugly ducklings' on the basis that they were selling at below what they should be and that allowed him to pick them up cheaply, be patient and come out good. This can of course make money but it might take a lot longer than I am prepared to wait.

I recommend that the OP gets hold of the last couple of Annual Reports and studies them carefully.

Dod

[GJHarney]

I've held SIT for many years via directly investing with it via a monthly d/d. The performance for nearly all that time has been nothing special, but on the basis that there was free dividend reinvestment and the charges were ok I was happy to more or less forget about it (it is one of a number of directly invested IT's that I plan to use as needed in retirement and when I know I will have access to decent chunks of money if required). This year the performance has been pretty good, and I must get around to increasing slightly that old monthly d/d!

[Jonetc15]

I'm not familiar with and haven't looked into Scottish Investment Trust, but on a quick glance at the AIC's performance page for it, http://www.theaic.co.uk/companydata/148/performance, it looks like the discount is actually a bit smaller than it has been for most of the past year or so, and is around the average before that [etc]...

Mc2fool: Thank you very much indeed for such a helpful reply with so many interesting links, which I will certainly follow up. I really am most grateful.

Many thanks too, Dod1010, for your interesting reply - food for thought.

ATB

Jon