Supply chain issues and growing labour shortages continue to be an issue across most developed markets, leading to a build-up in inflationary pressure. However, with GDP growth stalling in the UK and across a number of other geographies in the summer, monetary authorities have resisted any tightening to choke off this emergent inflation, enabling equity markets to continue their upward trend.
The main contributors to the Fund’s performance last month were Stock Spirits, thanks to a recommended offer for the company from a private equity group. Future continued its strong run, this time on the back of another accretive acquisition. Accesso Technology continued to move ahead after July’s positive trading update and RWS rebounded once an overhang from a large seller had been cleared. The only significant detractor was Purplebricks, with the market not responding well to its revised business model of employing local sales agents rather than having self-employed agents in the field, which will involve some additional cost but will hopefully help drive market share in the longer-term.
From a trading perspective, the Fund started a holding in Man Group, the alternatives and long-only fund manager. It also added to RPS, DFS Furniture, Eurocell, Balfour Beatty and Spirent. We continued to take profits across a number of our strongest performers notably Volution, dotDigital, Travis Perkins and Liontrust Asset Management on valuation grounds. Finally we sold part of our holding in Ultra Electronics given that its takeover by Cobham is now subject to a CMA review on national security grounds, which will slow and possibly undermine the whole process.