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
November 2019 - Latest commentary
Global equity markets continued to rally in November led by ongoing strength in the US, where resilient economic growth has dispelled recession fears for the time-being. The UK market has benefitted from hopes that the imminent general election will return a Conservative government with a clear working majority and thus end the political stalemate over Brexit. Accordingly, sterling remained well supported and domestic stocks outperformed.
The Fund benefited from this backdrop and comfortably outperformed the MSCI UK Index benchmark over the month. Many of our largest active positions contributed positively, including, most notably, Howdens Joinery, Intercontinental Hotels, Whitbread, Lloyds Banking, Flutter Entertainment, Integrafin and Taylor Wimpey. Our two smaller company technology holdings, First Derivatives and XP Power, also performed well. None of our holdings impacted particularly negatively in the period. The largest detractor from relative performance was our underweight holding in British American Tobacco, which rallied strongly on hopes that the US FDA would look to tighten regulation surrounding nicotine levels.
During the month we sold out entirely from our small holding in International Consolidated Airlines and trimmed CRH following price strength. We also reduced HSBC following disappointing recent quarterly results and on concerns over the escalating political conflict in Hong Kong. Conversely, we topped up Taylor Wimpey, where recent results demonstrated the resilience of the housebuilding sector.
The next month promises to be interesting for the UK equity market. If the general election outcome were to be anything other than a Conservative majority then it is likely that the market would give back a large portion of the recent gains. Conversely, further appreciation is in prospect should Boris Johnson win a decisive victory. The polls currently favour the latter outcome, but not to the extent that investors are taking anything for granted.
Previous months’ commentaries are contained within the fund factsheets.