Price and Performance

For the month of June, the Company’s Total Shareholder Return and NAV Total Return were 2.2% and 3.3%. The MSCI All Country World Index (ACWI) benchmark returned 4.0%. For the first half of 2021, the Company’s Total Shareholder Return and NAV Total Return were 11.1% and 14.8%, with the MSCI ACWI returning 11.1%.

Over the month, the Company’s most significant single contributor to return was Nvidia Corp, which delivered an absolute return of 26%. The multinational technology company received support in June from key stakeholders for their proposed acquisition of Arm Holdings, which if successful should accelerate Nvidia’s expansion in Artificial Intelligence computing, and open up new markets for the firm. In contrast, New Oriental Education & Technology Group Inc., a provider of private educational services in China, was the most significant detractor from performance in June. The share price of the stock fell as markets became increasingly nervous about the anticipated Chinese government crackdown on the private tutoring industry. However, despite recent falls, the Company’s stock picker believes that given its strong brand, scale, and high-quality offerings, New Oriental is well positioned to benefit from industry consolidation driven by new regulations imposed on the sector.

Within the Company’s portfolio, a position was established in Restaurant Group, a British chain of restaurants and public houses, which following significant business restructuring is, in the stock picker’s view, well placed to outperform analyst consensus expectations as the UK eases restrictions on the hospitality sector, as is anticipated in July. In contrast, the Company’s position in Prada was eliminated following a period of strong performance which took the company’s valuation to the top of its historic range and in excess of the stock picker’s assessment of intrinsic value.