Questor: a selection of trusts to buy more cheaply following the coronavirus sell-off

Following yesterday’s look at how our stock selections have reacted to the coronavirus crisis, we’ll now examine its effects on our portfolio of investment trusts.

The most striking thing is that while the overall impact on Questor’s trusts has of course been negative – on average they have lost 6.5pc this year – the individual falls are far smaller than those suffered by our shares.

The largest decline among the stocks we mentioned yesterday was the 53.7pc fall this year in the share price of Equals, the foreign exchange firm. The worst performance among our trusts, by contrast, is the 26.2pc loss of value suffered by Symphony International over the same period.

This is probably down to investors’ aversion to emerging markets – Symphony invests in the Asia-Pacific region – at times of crisis. The fall looks excessive. Buy.

The 24pc decline in Riverstone Energy’s shares coincides with a sharp fall in the price of crude oil, doubtless driven by fears that the virus will affect economic activity globally. The trust’s discount is an extraordinary 66pc and an eventual strong recovery from the crisis should see crude prices, oil-related assets and this trust in particular bounce swiftly. Buy.

BlackRock Frontiers was trading consistently at a premium until late January but since then the shares have fallen faster than the net asset value (NAV) and a 2.5pc discount is the result. The shares have lost 18.5pc this year. It operates in a risky area but investors comfortable with this should buy.

Aberforth Smaller Companies is a less risky version of Aberforth Split Level Income, covered below, but has still lost 18.3pc this year. Buy.

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Aberforth Split Level Income has lost 17.6pc this year. Its “value” style, which tends to shine when the economy strengthens, and its “geared” nature, by virtue of the zero-dividend preference shares it has issued, will not have endeared it to investors in the market’s recent mood of despair. But the managers are experienced investors and the discount is 7.7pc relative to a depressed NAV. Buy.

Shares in Henderson Opportunities have fallen by 16.9pc this year and the discount stands at 16.9pc. A shareholder vote in March 19 could result in it being wound up at close to par value. Otherwise we have high regard for the manager, James Henderson. Buy.

Temple Bar is another trust that appears to have been punished for its “value” style: its shares have shed 16.9pc of their value in 2020. The trust trades at about par value and its manager is the very experienced Alastair Mundy. Buy.

After a 16.8pc decline this year the share price of Henderson Smaller Companies is almost back to where it was in January 2018. Over those two years the interim dividend has risen by 16.7p (we don’t know the 2020 final dividend yet). The manager, Neil Hermon, has a strong record. Buy.

A more offbeat trust is another virus casualty: Doric Nimrod Air Three has lost 12pc since the new year. It owns Airbus A380 aircraft and leases them to the Emirates airline; its involvement in aviation probably accounts for the share price decline, even though all that matters is that Emirates remains a going concern despite the virus, which strikes us as highly likely. Buy.