Fund manager commentary

Most global equity markets moved sideways or made small gains over the course of the month, with the exception of the UK equity market which declined sharply against the background of an unexpected inconclusive general election result. The possibility of another election in the near future is very real. All this at a time when the negotiations regarding Britain’s exit from the European Union have just begun, they are likely to be both complex and lengthy and has already caused uncertainty that has begun to undermine UK financial markets. In addition, the squeeze on real consumer incomes is starting to slow economic activity in the UK. On the other side of the Atlantic, the US Federal Reserve raised interest rates by 0.25% to 1.25%. The move was well signalled in advance with the Federal Reserve indicating that one more hike is likely this year. Against this background, the FTSE All Share Index fell by 2.5% whilst that of the FTSE Equity Investment Instruments Index was 0.8% lower (both figures are total return).

The net asset value of the Growth portfolio fell by only 0.2% over the month (also in total return terms). The leading performers were private equity trust HG Capital which rose 11.5% and Biotech Growth Trust which gained 8.5%.

As at 30 June 2017