IT discounts likely to hold under volatility

Pointing to historical trends, Greenwood says discounts move with markets, but the emergence of hedge funds has disrupted this process. There are structural changes going on in the market, which mean investors can buy investment trusts, then hedge off the underlying risk. Usually, following a three-year bull run on the stock market, one would normally expect IT discounts to narrow before turning to widen again. However, despite sharp falls in the value of stock markets in recent weeks this widening has not occurred to the same degree – evidence of the structural changes going on, Gree...