31 May 2023
The Fund posted a return of -0.94% for May, marginally underperforming the sector average return of -0.60%.
Main equity markets returned a mixed performance in May. One of the strongest performers was the Japanese market. Here there was a positive response to news that there was unlikely to be any change to the yield curve control policy. Investors also responded positively to the restructure of the market, which is aimed at raising the overall standards of listed Japanese companies. The US market, as represented by the S&P 500, was marginally in positive territory, helped by a strong performance by large US technology names. Europe and UK ended in negative territory.
May was a difficult month meanwhile for fixed income, in particular UK government and investment grade corporate bonds. Whilst headline inflation, as measured by the consumer price index (CPI), fell from its previous double digit level, it was higher than the market had forecast. In a sign that inflation was indeed proving sticky, we saw an unexpected increase in core inflation. This led the market to price in further interest rate hikes by the Bank of England.
During the month there was one change made to the underlying holdings. This saw the position in the Carmignac Portfolio Long Short European Equity fund reduced in favour of Man GLG Dynamic Income. Market movements had meant that the position in the former had increased to being in excess of 6%. Proceeds were recycled into the Man GLG fund where, despite the potential for further volatility in fixed income markets, the yield on the fund offers a favourable risk/reward proposition.
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.