31 August 2022
The Fund posted a return of 1.17% for August, outperforming the sector average return of 0.52% due to strong underlying fund performance.
It was a difficult month for equity markets in general, with most of the major indices posting negative returns in local currency terms. With economic growth slowing, concerns increased that this, coupled with higher costs, would lead to lower corporate profitability moving forward. This was evident in the UK market, with the more domestically focused mid and small cap stocks underperforming large cap, with the latter earning more revenues from overseas given the multinational nature of their businesses. Europe was also a particularly weak performer, with cost pressures rising and energy costs in particular spiraling upwards. Japan was one of the bright spots, with the equity market finishing higher for the period. The weakness in the yen should prove beneficial for large exporters in the country. Returns in sterling however shone a different light, with positive returns for Japan and US and a smaller loss on European stocks due to weakness in sterling.
UK fixed income also endured a difficult month from a return perspective. Government and investment grade bonds were particularly weak performers as bond yields continued to rise. The continued march higher in inflation continued to force central banks into a more hawkish stance with regards to monetary policy, with no sign of letting up ahead.
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.