Since I invest in several investment trusts (closed-end funds), backing stock markets via IT futures is a reasonable way to increase leverage in what are tax-free trades in the UK. Yes, the bid to offer spreads are considerably wider than with more actively traded positions such as gold or silver, so I do not jump in and out but try to run trends, preferably which are in recovery mode. Also, ITs are not play things for high-frequency traders.
One of my biggest investments is in the JPMorgan Indian Investment Trust (JII LN), which trades at an attractive discount to NAV of nearly 11%, according to Bloomberg. I believe this discount was over 13% when I purchased June JII at 343.88p on 22nd January. This expired today at 407.613p and as it was on automatic rollover, I simultaneously purchased September JII at 410.2601p. My spread-bet long in the JPMorgan Chinese Investment Trust (JMC LN), which I bought in anticipation of an eventual recovery, was considerably less profitable given that it is still ranging. However, my rolled forward purchase of the June JMC contract had been purchased at 148.7381p on 18th March, and was sold today at 152.388p. The September contract was simultaneously purchased for my account at 153.3776p. It currently trades at a discount to NAV of over 12%, according to Bloomberg. These prices include all spread-bet dealing costs.Back to top