30 June 2023
The Fund posted a return of -0.63% for June, underperforming the sector average return of 0.33%.
Japanese stocks were strong performers in the month, with the Nikkei reaching a 33 year high. They continued to be buoyed by the prospect of the Bank of Japan maintaining its ultra loose policy. Corporates also remain financially strong and continue to improve their levels of corporate governance. The S&P 500 was also a strong performer, with the index continuing to be driven by the mega cap technology names as excitement over artificial intelligence continued. UK mid-cap stocks were weaker performers, investors remaining concerned about economic growth.
It was a negative returning month for UK fixed interest in June. After a higher than expected inflation print at the end of May and then again in June, markets struggled to see past the potential for further interest rate hikes. This was indeed delivered in June, but with a higher than expected 0.5% rather than 0.25% hike. High yield was the strongest performer given its lower level of interest rate sensitivity, but could not avoid a negative return.
Net cash inflows were invested across both equity and fixed interest funds. Within equities we increased our exposure to UK and European equities, firstly on valuation grounds. Within UK equities, our preference was for a fund investing in companies which have a durable competitive advantage and are able to sustain higher levels of profitability. Within European equities our preference was for a fund investing in companies with high free cash flow yields, strong balance sheets and which operate in supply constrained industries.
This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.
The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.
The Fund is suitable for investors who are seeking to achieve long term capital growth.
The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.
Past performance is not a guide to future performance.