Bath/Head Office:
London Office & Quoted Equity Team:
Edinburgh Office & European Quoted Equity Team:
MI Chelverton European Select Fund – Monthly Manager Commentary – April 2022

MI Chelverton European Select Fund – Monthly Manager Commentary – April 2022

European markets were generally weaker over the month with investor concerns focussing on inflation concerns, coupled with slowing growth. Stylistically, value continues to outperform growth significantly.

The fund performed broadly in line with European indices over the month. Focus is now turning to the ongoing first quarter results reporting season for companies.

All of the top contributors to performance were as a result of strong quarterly updates. They were across various sectors - Rejlers (Scandinavian engineering consultants), Svenska Handelsbanken (Swedish financial), Essity (Scandinavian staples), Siili Solutions (IT Services), Swedish Match (smokeless tobacco products) and Unilever, all had noteworthy positive contributions.

In terms of detractors from performance, disappointing updates from two of our semiconductor companies, BE Semiconductor and AMS Osram led to negative share price reactions. Alkemy (marketing technology) was also weak, but on no news. Caverion (Scandinavian building repair/maintenance) was also weak, as investors continue to question demand for services in a work-from-home hybrid environment.

Over the month, the fund started to repurchase ASM International (semiconductor manufacturing), following significant share price underperformance. We also purchased Siemens, again after significant recent underperformance. With its exposure to areas such as energy, mobility, healthcare and factory automation/digitalisation, Siemens has a portfolio which will benefit from themes such as increased energy investment and reshoring of industry to alleviate supply chain issues. Themes such as these have been exacerbated by the Ukrainian conflict.