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Readers may feel that I have overdone the discussion on London closed-end funds in recent months. The reason I have concentrated on them so much (and probably will for the rest of this year) is that they are a relatively novel asset as far as  SA investors are concerned and therefore require a wide introduction.

It’s at times like now, when the current (very uncomfortable) state of equity markets prevail, that a double-edged characteristic of investment trusts comes to the fore. During bear markets, they tend to open up discounts to the underlying asset value. The consequences of this  are twofold; on the one hand these fund prices tend to fall further than normal indices, but  on the other hand,  the upside is that the long-term buyer can  obtain excellent assets at discounted prices and the funds themselves can grow their relative NAV by buying back their own units. ..

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