Hi Richard,

It can be tricky. I was lucky enough to take my initial positions in 2018 when the premiums were smaller, especially in the case of HICL which was suffering because of fears of what a Labour government might do. Since then, I’ve tended to add a little bit here and there when the premiums weren’t too bad, such as when placings knocked the share price temporarily.

Building up positions in three trusts gave me some options each time I had new cash to invest and I’ve also been building up a number of positions in small caps and healthcare at the same time, so overall I’ve been able to be pretty patient as there has usually always been at least one or two trusts I’m interested in on a lower than normal rating.

I’m looking to hold these positions for a long time, maybe 10 years plus, so that allows me to be a little more relaxed about the premium paid than some folks I would assume. A lot of the NAV calculations for these trusts seem to be a little bit on the conservative side as well, so paying a larger premium makes more sense than it does for a listed equity trust.

Hope that’s useful.

A lot of the reasonably well run Trusts right now carry a premium to NAV, although that is calculated on an infrequent basis.

The increase in interest rates might harm them longer term as some leverage debt, but then inflation of the assets will somewhat offset.

I would like to buy into a few but not when the premium is higher than the yield with their relatively stable capital NAVs.