OUR PORTFOLIO

The view from our Investment Manager, 30 June 2019

Over the quarter, the Trust’s total shareholder return, Net Asset Value (NAV) total return and equity portfolio return were 7.0%, 6.3% and 6.2% respectively against the MSCI All Country World Index (ACWI) return of 6.3%.

Throughout the second quarter of 2019 a rather turbulent environment was seen across both developed and emerging equity markets. April saw the MSCI ACWI return 3.4% in sterling terms, followed by a sharp fall observed in May of -2.6% and return to growth of 5.6% in June. Such volatility suggests the continuing influence of political uncertainty upon global financial markets, with the ongoing US-China trade dispute as well as increasing tensions in the Middle East both likely contributing factors. UK markets underperformed both European and US equity markets, returning 2%, driven by ongoing uncertainty around Brexit and the resignation of Prime Minister Theresa May. European Markets experienced a positive quarter outperforming both US and UK equity markets, returning 9% for a sterling investor, with the European Central Bank indicating that a period of expansionary monetary policy could be on the horizon.

During this rather volatile quarter, the Trust’s stock pickers continued to find interesting investment opportunities. A number of new positions were established throughout the quarter, including a position in Melrose Industries, a UK-based specialist manufacturing investor, UK tool manufacturer Makita, and the UK’s largest Business Process Outsourcing company Capita, all of which are believed to have significant potential for driving future outperformance. With regards to the Trust’s performance, the largest single contributor to the Trust’s return was Microsoft, contributing 0.4%, following better-than-expected earnings driven by the success of its cloud computing business, Azure.

Since the adoption of its new multi-manager approach in April 2017, the Trust’s equity portfolio has yielded a return of over 22.2%. Although the period of just over two years is not sufficient to fully evaluate the performance of the Trust, over this period of time, the Trust’s stock pickers have successfully managed to take advantage of market opportunities and generate returns in excess of the wider market.

Read our Investment Manager’s report for more on our portfolio’s performance over the past month.