Is there hope for capital growth investment trusts?

For better or worse, activist investors have been busy swooping down on the beleaguered investment trust sector. Saba Capital has been pretty busy in the space in the last year, most notably via a battle with the European Opportunities Trust (EOT).

Elliott Investment Management, known for its spat with Alliance Trust (ATST), has raised eyebrows by building a stake in Scottish Mortgage (SMT) in recent weeks. Now, it has come to light that Asset Value Investors, which runs the AVI Global Trust (AGT), has built a stake in the embattled "growth capital" fund Chrysalis (CHRY).

With interest rates presumably having peaked and markets looking healthier, it's not hard to make a recovery narrative in the investment trust space. Plenty of discounts remain wide, something that should explain the emergence of so many activists in recent months. But the sector is still prone to disruption, and there are valid questions about whether investors can really recoup the deep losses they have already sustained.