Five buys, no sells – how Questor's trust tips are doing so far

·4 min read
Power-generating windmill turbines - YVES HERMAN /REUTERS
Power-generating windmill turbines - YVES HERMAN /REUTERS

Yesterday we reported an overall loss for our recommendations of individual stocks in the first half of the year. Today we’ll see if our investment trust tips fared better.

As it turns out, there is not much to choose between them. Our trusts collectively have lost 4.3pc, compared with 5.8pc for the stocks. While the latter outperformed the index by a trifling 0.4 percentage points, the trust recommendations underperformed by an even less significant 0.1 percentage points.

Only five new trust tips were published here during the first six months of the year and two of them are in the black. We did not publish any sell recommendations for investment trusts over the period.

Questor’s winners

The best performer among the trusts tipped in the first half is the one we advised readers to buy just last week: JLEN Environmental Assets, which has gained 3.7pc in that short period.

Why? We have to acknowledge the awkward truth that our own tip may have contributed, as does happen on occasion, especially towards the smaller, less heavily traded end of the market. That said, JLEN is no tiddler at a market value of £815m. Otherwise we could speculate that more and more investors, worried about inflation, are appreciating the value of stocks and trusts such as JLEN that can boast inflation-linked revenues.

Odyssean investment trust has gained 0.9pc in the three weeks since we tipped it. This is despite the fact that it is more exposed to swings in sentiment than most as it invests in smaller companies, always the first to be sold when investors take fright over wider developments in the stock market or the economy.

We retain our faith in the manager, Stuart Widdowson, whose skill has been reflected not least in the number of bids his holdings have attracted.

Questor’s losers

Our worst trust performer in the first half was CQS Natural Resources Growth & Income; we tipped it in April and the share price has fallen by 21.7pc since.

This decline can be attributed to a turn in the commodities market as a whole, which, after a strong few months driven by the war in Ukraine and the inflationary environment, suffered a swift reverse that has taken prices more or less back to where they were before Russia’s invasion.

Questor’s view is that commodities are a good place to be while inflation is so high, as they have offered protection in the past. The CQS trust invests in small and medium-sized miners and energy stocks and seeks exposure to resources that are required for electric vehicles and low carbon energy generation and storage. This strikes us as a canny strategy for the longer term too.

The other two fallers suffered only minor damage. Shares in International Public Partnerships, which invests in infrastructure assets such as gas pipelines, sewers and trains, have fallen by 3.6pc since our tip in May. Our case for the trust – that its assets produce dependable, inflation-linked income – is unchanged; the modest sell-off in the shares may have more to do with the trust’s premium to the value of its assets.

We said when we tipped it that a premium in double digits would normally cause us to hesitate, as the premium does expose the shares to greater risk should sentiment change. However, the strength of its income credentials in our view overcomes this concern.

Our final faller is Personal Assets. As we might expect for a portfolio dedicated to the preservation of capital, the fall since our tip last month is barely significant at 0.9pc. The trust remains an obvious choice for any investor who seeks long-term growth without too many bumps along the way.

The shares currently trade at about £500, a figure high enough to make investing awkward for some. The board has therefore proposed a share split, which will see each existing share replaced by 100 new ones and the share price fall to about 500p. Shareholders will be asked to approve the split at the annual meeting in a week's time.

Investment trust news

The merger between LXi Reit and Secure Income Reit has been approved by shareholders and the court and trading in the latter’s shares was due to cease this morning; they will be replaced by shares in LXi.

Read the latest Questor column on telegraph.co.uk every Sunday, Tuesday, Wednesday, Thursday and Friday from 5am.

Read Questor’s rules of investment before you follow our tips.

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