The fund was one of the first funds to be launched when the firm was established. Benchmarked against the MSCI UK Index, it is a portfolio of UK companies with strong structural growth opportunities and attractive cash flows.
Is overseen by a highly experienced team with complementary skillsets
Focuses on companies with high and sustainable returns on capital with structural growth opportunities
Is a concentrated portfolio with a long-term time horizon
September 2018 - Latest commentary
Having dipped lower in the early part of September, the UK market recovered to close marginally higher over the month, in line with European markets but lagging US and Japanese equities. The main strength came from the Oil and Mining sectors, driven by the firmer oil price and slightly better global growth sentiment. Most other sector groups were weaker, reflecting the lack of progress on Brexit negotiations and global trade concerns.
The Fund underperformed the broader market in the month. Only one holding was materially weak however, namely IQE (-15.8%), where shorting by hedge funds continues to weigh on the stock, while positions in RELX (technical factors) and Great Portland Estates also impacted negatively. Positive contributions came from resource holdings Anglo American, Rio Tinto and BP, and oil services company Wood Group. Elsewhere, Micro Focus started to see some recovery in sentiment, no doubt helped by an ongoing share buy-back.
The main activity in the month was the complete disposal of Vodafone as we decided that uncertain longer term prospects were not sufficiently compensated by the modest valuation. We also took profits in Shire, as the previously wide discount to the Takeda offer has narrowed, and took further profits in John Laing. Although there were no outright purchases in the period, by excluding several holdings from a program sale to meet a large redemption, we proportionately increased positions in Kenmare, Paddy Power Betfair, Micro Focus, Howden Joinery, Lloyds Banking and Unilever.
With Brexit negotiations becoming ever more chaotic and urgent amidst Conservative Party infighting, the near term outlook for UK equities is hard to call. A deal of any sort would probably elicit a short term relief rally, while the broader global economic growth trends remain supportive for the medium term.
Previous months’ commentaries are contained within the fund factsheets.
Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years performance is available in the fund factsheets below.
The fund invests geographically in a narrow range, there is an increased risk of volatility which may result in frequent rises and falls in the Fund's share price.