Unicorn Mastertrust took the opportunity to top up a number of existing holdings during the coronavirus market sell-off, but saw few chances to initiate new positions, as manager Peter Walls "stuck to [his] own knitting".
Walls added to holdings in global trust-of-trusts AVI Global, formerly British Empire, alongside solidifying his backing of smaller companies and private equity by increasing his positions in Strategic Equity Capital and ICG Enterprise.
The two trusts, including CQS New City High Yield, bought during the period were quickly sold once their discounts rapidly narrowed. The fund made around a 33% profit in the space of about ten days on CQS.
The investment trust sector has seen elevated volatility through the recent crisis, despite having outperformed the wider FTSE All-Share index, with Walls noting the average investment company discount started the year at about 3% before widening to more than 20%.
It has since come in to around 8% today. At the time of writing (13 May), the FTSE All-Share Equity Investment Instruments index had lost 10.8% during 2020, half that of the wider FTSE All-Share's 21.1% loss.
Walls said the speed and scale of the market movements had been "quite unprecedented".
"I remember quite vividly the crash of 1987 and I do not believe it was anything like as astonishing as the gyrations we have seen in recent months," he recalled.
The investment company sector, in fact, was even more volatile than the broader market, the manager noted.
"I would like to say we managed to benefit greatly from that volatility; we did take the opportunity to add to some existing positions on very attractive ratings," he continued.
"It is always the case that in stressed market conditions, my fund does tend to suffer more than the market [because] I have a modicum of gearing at the underlying trust level and what generally happens is discounts widen in those circumstances."
Walls found some existing holdings that "popped out to really quite wide discounts… driven by very little volume presented good buying opportunities", noting that, in general, "it has been more a case of sticking to our knitting".
He added: "Sticking to the philosophy of trying to buy good-quality investment trusts at decent discounts to net asset value."