Fund manager commentary

Global equity markets continued their run of positive returns in July. The “synchronised recovery” evident in the US, Asia Pacific and increasingly in Europe has set a more supportive backdrop for financial markets generally. Interestingly there is scant evidence of inflation becoming a problem in any of the developed markets, even in the UK, where sterling weakness following the Brexit vote last year was the key factor behind inflation moving higher, indications are that it may be close to a peak. Against this background the FTSE All Share Index rose by 1.2% whilst that of the FTSE Equity Investment Instruments Index was ahead by 1.7% (both figures are total return).

The net asset value of the Growth portfolio gained 1.9% (also in total returns). Once again the River & Mercantile UK Micro Cap Trust was a leading performer with an 8% rise in the share price. Outstanding stock selection in the most attractively valued part of the equity market has been the key driver to the consistently strong performance. Also recovering well was Woodford Patient Capital which rose by 7%. It has taken some time however there are indications that a number of the healthcare holdings in the portfolio are set to have positive outcomes over the next year.

As at 31 July 2017