Bath/Head Office & Unquoted Equity Team:
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Investor Information

monthly manager commentary

July 2020

The Fund returned 2.71% in July compared to a negative -2.26% for its IA UK All Companies benchmark. The main theme was the strong performance across a number of pre-profit healthcare stocks, where the Fund has quite small positions, with Synairgen leading the way, quadrupling in the period after positive trial results for its COVID-19 therapy, whilst Avacta, Maxcyte, Oxford Biodynamics and Diurnal all performed strongly. Elsewhere Premier Foods continued its run after its strong results at the end of June and Xaar rallied on the back of a reassuring trading update. Finally, RockRose Energy recovered from its COVID-19 lows thanks to a recommended takeover offer. On the negative side both Clinigen and Advanced Medical Solutions fell back after reporting that COVID-19 had impacted their sales, particularly into the elective surgery market, and Boku’s shares also fell back with the market underwhelmed by its interim trading update.

We took advantage of the share price strength to trim some of our strongest performers, reducing holdings in Synairgen, Renalytics, Premier Foods and B&M European Value Retail. On the buy tack we added to Codemasters, anticipating a successful launch of its 2020 Formula 1 video game. We participated in placings to build up more meaningful holdings in Curtis Banks and Inspired Energy. We took advantage of share price weakness to add to Clinigen and Advanced Medical Solutions, in the expectation that their elective surgery markets will recover. We also added to Inchcape and Bodycote after recent underperformance. Finally, we participated in the IPO of Elixirr, a challenger management consultancy business with an impressive blue-chip customer base focused on digital transformation projects.

Monetary and fiscal easing have continued to underpin the equity market, leaving savers bereft of other sensible asset classes in which to invest. Whilst the worst impact from COVID-19 is now hopefully over, as yet there is no medical solution or effective monitoring in most economies, with resultant flare-ups leading to less damaging localised lock-downs. Companies’ results have so far been more reassuring than might have been anticipated with many companies re-instating guidance and some even restoring dividends. Barring the odd exception, the Fund’s holdings have participated in this trend, enabling the portfolio to participate in the rally. With the Fund now somewhat more tilted to economically resilient holdings and early recovery stocks in the construction sector we hope it should be well-placed for most foreseeable eventualities going forwards.


June 2020

After the strong rally in recent months, the market seemed to enter a holding pattern in June. The level of economic activity and business confidence continued to improve as economies further loosened restrictions, albeit both are still a long way from pre-Pandemic norms. Fiscal and monetary support also continued, with further measures announced b[…]

May 2020

Apart from a period of softness at the beginning of the month, the Fund and wider market continued to rally in May, with investor confidence growing as economies around the world emerged tentatively from lockdown. The healthcare sector was the primary driver of the Fund’s performance in May with Clinigen, its largest holding, returning 21% and nota[…]

April 2020

After a March in which vast swathes of the developed world was subject to lockdown, April saw many countries returning to work or setting a clear timetable for the loosening of current restrictions. April also featured progress in the medical fightback against COVID-19, with vaccine trials commencing and positive data from a number of potential tre[…]

March 2020

March saw a remorseless sell-off in the first 2 weeks, followed by a sharp bounce as the market took comfort from the scale of economic support from governments and central banks. However, in the last week, markets have resumed the downward trend as economic data starts to show the damage caused by the current societal lockdowns and the news from t[…]

February 2020

The last few weeks have seen a massive sell-off in the equity market caused by the COVID-19 pandemic threat to the global economy and exacerbated by the oil price collapse. Initially seen as a supply side problem for the global economy as China shut down to contain the virus, the issue has swiftly become an even more serious global demand side prob[…]

January 2020

After the very strong end to 2019 in the wake of the Conservative party election victory, January turned out to be somewhat underwhelming, with investor enthusiasm dampened by the short BREXIT trade deal timetable and the heightened risk of no-deal coming to the fore again. The Fund had an underwhelming month, returning just 0.54%, ahead of its IA […]

December 2019

After last month’s election result, the market bounced sharply, with domestic earners particularly strong. However, since the turn of the year, this enthusiasm has been tempered by concerns over the short timetable the Conservative government has set for negotiations with our European partners for a future trading relationship. Nevertheless, with g[…]

November 2019

The events of the last few days ago made commentary about what happened in November somewhat academic. Suffice it to say the Fund returned 5.7%, outperforming its UK All Companies peer group, in what was a strong market for UK equities. The Fund’s performance was boosted by a take-over bid for Consort Medical, which we had been adding to following […]

October 2019

Having appeared to be closer than ever to a BREXIT transitional agreement, the withdrawal of this agreement from parliament and the subsequent calling of a general election has served to further the uncertainty in the UK. Added to this, sentiment around the outlook for the global economic environment is cautious, and this has been reflected in some[…]