Two closed-ends at a discount

Article Excerpt

CANADIAN GENERAL INVESTMENT TRUST $12.25 (Toronto symbol: CGI) mainly invests in shares of Canadian companies. Its discount to its net asset value now stands at 22%. The trust now holds a high 16.3% of its assets in cash, up from just 0.5% a year ago. THIRD CANADIAN GENERAL INVESTMENT TRUST $22 (Toronto symbol: THD) holds 68% of its assets in units of Canadian General Investments. The rest of its holdings are mostly high-quality income trusts and stocks. The trust’s discount to its net asset value is 21%. Since Third Canadian trades at a discount to its asset value, as does its main holding, Canadian General, you might say Third Canadian in effect trades at a “double discount” of approximately 33%. The total MER for Third Canadian, including the MER paid on the units of Canadian General it holds, is 1.9%, a bit above the 1.7% MER on Canadian General. Third Canadian holds 8.6% of its assets in foreign stocks, while Canadian General holds…

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