How investment trust prices are calculated

Investment trust prices fluctuate, just like the prices of any other investment shares traded on stock markets. New prices are calculated frequently and can be found published daily, weekly, even monthly or yearly. The price of investment trusts change frequently, since they are traded on a volatile market. The trust prices change often to reflect the amount of shares that are being sold and bought.

Net asset values per unit or share dictates the value of an investment fund. The value of of the portfolio of investments which is then divided by the number of own units or shares is known as the net asset. These asset values are calculated daily and they are different to the individual share prices. Shares tend to be traded at a discount price. There are a number of reasons why the net asset value you see advertised is different to the actual share prices.

The constant fluctuation in the prices of investment trust shares makes investing in stock and shares a risky endevour, and the amount of discount can tell you whether a certain share is a good investment or not. If the calculated discount is fairly large e.g. 20%, then this suggests that the particular fund is not performing as well as expected. Smaller discount shares e.g. 0-5% indicate that the share is performing well and it is popular with a lot of people. The important thing is to be wary about discount trust prices, especially if you do not know when they were last calculated.

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