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
April 2019 - Latest commentary
UK equities made further modest progress in April alongside most other major equity markets. Global economic growth may be muted but appears to have stabilised, supporting some recovery in economically sensitive sectors such as industrials and financials.
The postponement of Brexit has been well received and helped to drive a rally in mid-cap stocks, whilst the FTSE 100 large caps lagged following profit taking. This background was helpful for the performance of our portfolio, with both sector allocation and stock selection contributing positively.
Our overweight position in the financial and industrial sectors added value, as did our underweight exposure to health care. This latter factor was as much a stock effect, with the absence of a holding in AstraZeneca being the most significant single positive impact as the stock fell following a large share placing to fund an acquisition. Stock selection also benefited from strong gains in several holdings, most notably First Derivatives, Integrafin, Prudential, OneSavings Bank and Tui. Additionally, it was gratifying that our newer holdings, Taylor Wimpey and Intercontinental Hotels, also contributed positively. The only material negative stock contribution came from Whitbread. The stock fell sharply at month- end on the announcement of results which flagged up the continuing weak operational performance of Premier Inns as Brexit uncertainty has curtailed business travel recently. Following a period during which the portfolio has seen the introduction of several new holdings and disposals, April was by comparison a quieter month for activity, which better reflects our long term investment horizon and low turnover style. We simply added to our recently established holdings in Rolls Royce while modestly trimming ITV.
Equity markets may now pause to consolidate the strong gains this year but there is no reason to expect a significant set-back. Fundamental factors have genuinely improved, particularly in China, while a less threatening US policy stance and quiescent inflation underpin both bond and equity valuations, at least for the time-being.
Previous months’ commentaries are contained within the fund factsheets.