Bottom Line: Successful anomaly

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EDINBURGH Investment Trust is something of an anomaly. It is classified as an international trust, but has 89 per cent of its pounds 882m equity portfolio invested in the UK, which means it stands to perform roughly in line with the London market.

Its shares at 265p stand on an 11 per cent discount to net assets, similar to other international trusts. UK trusts are priced far more tightly, with the average discount for the sub-sector at only 2 per cent.

This reflects investors' preference for UK investments, boosted by hopes for domestic recovery. Discounts on other trusts are far higher.

Edinburgh's performance last year was encouraging, with net assets rising 18.5 per cent - faster than the FT-SE 100 index. The final dividend is 5.5p, making a total of 8p.

As well as increasing its holdings of UK shares last year, Edinburgh borrowed pounds 100m to buy long gilts. It managed to cover its interest costs and also make a capital gain.

Given its record, the shares are worth buying by anyone wanting more exposure to London.