In spite of the widespread support provided by the Government and the Bank of England, many businesses are struggling to survive.  The UK shopping centre owner, Intu was a recent casualty of the pandemic that has inflicted severe pain on the struggling retail sector, recently entering administration. Other companies have decided to postpone the actual payment of dividends in spite of having announced them to the market.

However not is all gloom and doom.  On the economic front, recent news from Europe was encouraging, with PMI surveys for the Eurozone and United Kingdom rebounding, particularly in the service sector, in large part due to the aggressive monetary easing by the central banks.  The Bank of England, consistent with the approach taken by the other members of the G10, announced a £100B increase in its asset purchase target during June.

The plight of business as they come to grips with cash constraints and a rapidly changing business paradigm, has been largely ignored by the stock market.  During the past month the MSCI World Index and the S&P 500 were up by 2.51% and 1.84% respectively.  The UK, European and Asian markets reacted in similar fashion.  In the UK, the FTSE 100 was up by 1.53% in local currency terms while the indices associated with smaller companies fared much better as has been the case in recent months.  The Small Cap Index increased by 3.02% with the Fledgling Index up by 2.99% as compared to the AIM All Share which only increased by 0.96% during the month of June.

After the excellent performance in recent months our portfolio performed in line with the overall market and was up by 1.70% during the month.  After providing for the company expenses the net performance as reflected in the NAV was an increase of 1.38%. Cash has been conserved, remaining at 3.6% of the portfolio at month end.