Saba Capital Launches UK ETF Targeting Investment Trust Discounts
Event summary
- Saba Capital launched the Saba Capital Investment Trusts UCITS ETF (UKIT) on March 5, 2026.
- The actively managed ETF invests in UK investment trusts trading at discounts to net asset value (NAV).
- UKIT will initially hold 40-60 trusts across various asset classes, targeting £15 billion in total discounts.
- Managed by Boaz Weinstein and Paul Kazarian, the ETF builds on Saba's decade-long experience in investment trusts.
The big picture
The launch comes amid a realignment in the £250 billion UK investment trust sector, driven by higher interest rates and reduced retail demand. Saba aims to capitalize on this shift with an actively managed ETF targeting trusts trading at attractive discounts. The strategy builds on the firm's successful US closed-end fund-focused ETF, leveraging its expertise in discount investing.
What we're watching
- Discount Narrowing
- The pace at which UK investment trust discounts narrow will determine UKIT's performance.
- Corporate Activity
- Whether share buybacks and tender offers materialize as expected to support discount narrowing.
- Retail Demand
- How renewed retail investor interest impacts the ETF's strategy and market dynamics.