Discount management policy

Discount management

Investment trusts have a Net Asset Value, which is reached by adding up the value of each of the underlying investments and after deducting the fair value of any liabilities. The actual trading price is determined by supply and demand. If the actual price exceeds the Net Asset Value, the trust is said to be trading at a premium. If it’s below, they’re at a discount.

The Directors attach considerable importance to any premium or discount to Net Asset Value (NAV) at which the shares trade, both in absolute terms and relative to the average rating at which the UK Equity Income sector of Investment Trusts as a whole is trading. Premiums judged to be excessive will be addressed by repeated share issues, either new or from Treasury. Discounts judged to be excessive will be addressed by repeated share buybacks, for Treasury or cancellation. The Directors are prepared to be proactive in premium / discount management to minimise potential disadvantages to shareholders.

In order to avoid substantial overhangs or shortages of shares in the market the Board asks shareholders to approve resolutions which allow for the buyback of shares and their issuance which can assist in the management of the discount. However, market sentiment is beyond the absolute control of the Manager and Board.

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We recommend that you seek independent financial advice to ensure Temple Bar is suitable for your investment needs.

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