Bath/Head Office & Unquoted Equity Team:
London Office & Quoted Equity Team:

Investor Information

monthly manager commentary

July 2017

The Fund’s strong relative performance last month was helped by positive trading news from companies across a broad spread of sectors so, whilst the background economic commentary has become increasingly negative post BREXIT and management commentary is appropriately cautious, bottom-up numbers have for the most part been quite supportive of market valuations. In particular, the Fund enjoyed strong performance from Bodycote on the back of good half year numbers and IQE after a positive trading update. Following shortly on from its June upgrade, Games Workshop issued yet another positive trading update in July. Two IPOs we participated in, Quiz, a fast growing multi-channel ladies fashion retailer, and Tatton Asset Management, both got off to strong starts. Our strongest performer though was Revolution Bars which, having sold off sharply earlier in the year after warning of higher than expected business rates and wage costs, received a bid approach. On the negative tack, Brooks MacDonald weakened after its new CEO warned of the need to raise administration costs to catch up with the high level of growth seen in recent years and also to make a provision against legacy issues at an earlier Channel Island acquisition.

During the month, we started a new holding in Dialight, a leading international manufacturer of LED lighting products for use at industrial locations. New management, whilst addressing the manufacturing cost base, are investing in both marketing and an upgraded product offering to take advantage of the sizeable market opportunity converting traditional lighting to low energy and minimal maintenance LED alternatives. Other new investments during the month were the Quiz IPO and Gordon Dadds, a legal business, which raised new money to consolidate firms of solicitors. We also built up the holding in Spectris to a more meaningful position, as management noted a modest improvement in end markets which, coupled with its ongoing cost saving programme, made the valuation look more compelling in our view. On the sell side, we reduced our positions in some of our more expensive holdings like IQE and Ascential, on the back of strong share performances. We exited Mortgage Advice Bureau on valuation grounds, it having performed exceptionally well since its IPO shortly after the Fund’s launch.


June 2017

A month on from the election and, despite the Tories and the DUP finally reaching some form of agreement, political uncertainty still persists and Brexit looks like becoming a ‘legislative battleground’. This all serves to undermine business optimism and consumer confidence in the short term and we have tangible evidence of this with the warning fr[…]

May 2017

Regular and unexpected election results seem to be the new norm for the UK. This time the market seems to have taken the poor showing by the Conservative Party in its stride as investors have focused on the economic implications of a softer BREXIT, whatever that may entail, rather than worrying about the new found electability of a Labour Party tha[…]

April 2017

The Fund enjoyed a very strong April, as UK small and mid caps, where the Fund is focused, performed strongly, outshining large caps. The outperformance was broadly based with a third of the portfolio returning over 10% in the month. The outstanding performer was Statpro, which rallied sharply from a period of weakness caused by a stock overhang, r[…]

March 2017

Triggering Article 50 had minimal impact on the market last month, as the domestic economy continues to perform well and investors understand it will be sometime before the terms of exit and economic costs or otherwise of leaving the EU are fully understood. This back-drop provided a broadly supportive environment for small and mid caps where the F[…]

February 2017

The Fund returned 1.43% in February, underperforming its IA UK All Companies benchmark by just over 1% as the domestic equity market pushed onto new highs. In a quiet month for newsflow there were very few stand-out performers in the portfolio. Inspired Energy was the best performer rising strongly after a stock over-hang was cleared away, whilst B[…]

January 2017

The Fund returned 2.32% in January compared with 0.50% for its IA UK All Companies benchmark. There were no particular sector trends evident within our performance, the stand-out market returns once again coming from the miners, where the Fund, given its UK Small and Mid Cap mandate, has no exposure. Top contributors to performance over the month w[…]

December 2016

The Fund returned 5.5% in December capping off a strong second half to 2016 when it returned 26% as it rebounded from its low point after the sharp BREXIT sell-off at the end of June. There were no particular themes to last month’s performance other than a broad number of stocks generating positive returns, with companies generally meeting or beati[…]

November 2016

The Fund’s performance relative to its IA UK All Companies benchmark bounced back strongly after an underwhelming October, despite not being exposed to any of the “in vogue” mega-cap sectors of Banks, Insurers and Miners by virtue of its Mid and Small cap investment strategy. Performance was driven by good trading updates from a number of holdings,[…]

October 2016

As anticipated after a very strong 3rd quarter, which saw a rebound from the BREXIT sell-off, October was a relatively poor month for the Fund as investors post the Tory party conference worried about the economic implications of a hard BREXIT, with renewed weakness in sterling once again driving the relative outperformance of foreign currency earn[…]