IFA confusion over risk warnings and geared products is one reason why discounts on investment trusts have widened in recent weeks, says Nick Greenwood, head of investment trust at Iimia.
Greenwood believes IFA's unsure of "sending a message that might scare their clients" are therefore avoiding trusts for the time being.
Because prices of closed end funds are determined solely by supply and demand of investors rather than the value of the underlying investments, the lack of buyers means prices have fallen.
This is even hitting funds in the £1bn class, such as Witan, but Greenwood warns the opportunity to buy big, well-known funds at 20% discounts will not last long.IFAonline
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