Cade (pictured), analyst at Numis, says the recent rally across equity markets has seen discounts close across the board, which is making it difficult for bargain hunters. When asked what sectors currently represent good value, he said: "There isn’t a huge amount of value around anywhere, to be honest. There are a few one-offs, but no real sector plays."
Here are three that he believes offer potentially attractive entry points.
Monks Investment Trust
"The recent performance of the trust hasn’t been great, which has seen discounts widen a bit," said Cade.
"It was in line with Scottish Mortgage [which is also run by Baillie Gifford], but that’s gone one way and this one the other."
"Monks was on a discount of 5 per cent but that’s up closer to 14 per cent now. I like Gerald [Smith] and his team, so this is an option."
As Cade points out, the £1bn Monks Investment Trust has had a tough time of late, significantly underperforming its FTSE World benchmark in 2011 and 2012.
Performance of trust and index since May 2006
Source: FE Analytics
The trust is down versus its benchmark since Smith took over in 2006, but Cade points out that like his colleague James Anderson, who runs the Scottish Mortgage IT, Smith is very long-term in his approach.
According to the AIC, the trust is currently trading on a discount of 13.9 per cent, which makes it potentially one of the biggest bargains in the IT Global Growth sector.
It has an ongoing charges figure (OCF) of 0.63 per cent, is 4 per cent geared and is currently yielding 1.1 per cent.
British Empire Securities & General IT
"This is another one looking a bit cheap, currently on a discount of 14 per cent," said Cade.
"It’s got a good track record – I think it all stems from the fact people are wary of Europe."
According to FE data, the £918m trust has 40 per cent of its assets in continental Europe, with the rest split between Asia and the US.
Manager John Pennink, who has run the trust since January 2001, has been very successful. He has led British Empire to top-quartile performance in its IT UK Growth & Income sector over 10 years, with returns of 259.03 per cent.
Performance of trust vs sector and benchmark over 10yrs
Source: FE Analytics
Over the same period, the trust’s benchmark – the All Share – is up 125.66 per cent.
Performance has been a little more mixed in recent years however: Pennink has underperformed the index over three and five years, but is up over one year.
The trust is highly concentrated, with almost half of its assets in the top-10.
This includes a 9.41 per cent position in French multinational media and telecoms company Vivendi, and British conglomerate Jardine Matheson.
It has an OCF of 0.75 per cent, and a yield of 1.7 per cent.
Advance Frontier Markets IT
"When you consider this trust is on an 11 per cent discount, and the BlackRock Frontiers Investment Trust is on a premium of [4.4 per cent], I think there’s certainly value there," said Cade.
The £97m Advance Frontier Markets IT has only marginally underperformed its BlackRock rival since the latter’s launch in July 2007, although it has been significantly less volatile.
Performance of trusts vs index since Dec 2010
Source: FE Analytics
The trust, which is headed up by Slim Feriani, was launched in June 2007. It has lost just over 2 per cent since then, but has beaten its MSCI Frontier Markets benchmark in the process.
It has an OCF of 1.54 per cent and does not charge a performance fee. By contrast, the BlackRock trust has an OCF of 1.57 per cent and does charge a performance fee.