The ASX All Ordinaries (ASX: XAO) is down around 2.5% at the time of writing on worries about the coronavirus and how quickly it is spreading.
Time will tell whether it’s just an infectious flu, or whether it’s a bit worse. What is definitely happening is share prices are falling and fear is rising.
The share price of resource giant BHP Group Ltd (ASX: BHP) is down 1.8%.
The share price of Commonwealth Bank of Australia (ASX: CBA) is down 1.5%.
The share price of CSL Limited (ASX: CSL) is down 3.25%.
The share price of Goodman Group (ASX: GMG) is also down 3.25%.
The share price of South32 Ltd (ASX: S32) is down around 6%.
And so on.
Investors are heading for the exits.
Listed investment businesses (companies and trusts) are seeing falls in their share portfolios, resulting in a drop in a decline in their net tangible assets (NTA) per share. However, some listed investment businesses are being sold off even more than the decline of their portfolios. This may be a sign that retail investors are just trying to sell, and don’t mind selling at a discount to what the underlying value of the share actually is.
For example, high-performing Magellan Global Trust’s (ASX: MGG) share price has fallen by almost 11% since the start of the week. The Magellan Global Trust is now at a 3.5% discount to its current indicative net asset value (NAV), whereas it’s been extremely close to (or above) its NAV for the past few months.
Other global LICs have also been sold off heavily today and this week.
The PM Capital Global Opportunities Fund Ltd (ASX: PGF) share price is down 4.6% today and 8.8% this week.
The WAM Global Ltd (ASX: WGB) share price is down 2.7% today and around 8% this week.
These are some of the shares that I’ve got my eye on, because the market has pushed them lower than their portfolios have likely fallen.
I’m also thinking about excellent small cap LIC WAM Microcap Limited (ASX: WMI), it’s down 4% today and down 11% this week.
Finally, investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is down 3% today and the Soul Patts share price is down 8.5% down this week.
To me, it seems that regular retail investors are selling down their holdings more than institutional investors, which is an opportunity to buy strong-performing funds at attractive discounts.
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Tristan Harrison owns shares of MAGLOBTRST UNITS, PM Capital Global Opportunities Fund Ltd, WAM MICRO FPO, WAMGLOBAL FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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