In last month’s commentary we noted that besides the fact that global GDP had contracted in the second quarter as a result of COVID-19, the worst appeared to be over. This was confirmed in recent data releases which indicated that while Europe’s August PMI surveys were mixed, those for the U.K. had firmed, including being the strongest reading for the Services PMI since 2013. However, in an economy responding to targeted stimuli by the Government, this can be misleading and mask underlying structural issues and competitive pressures on the profitability of some businesses.

We continued to realign the portfolio by selling out of our position in Costain, having recently added YouGov and Clinigen into the portfolio. YouGov is an international research and data analytics group headquartered in London which collects and stores data from a proprietary global panel of over 8 million people on consumer opinions, attitudes and behaviour every day. This data is then analysed and used to provide insights that enable intelligent decision-making and improves a wide spectrum of marketing activities for a customer-base which includes media owners, brands and media agencies.

Clinigen Group plc is a global business with supply and distribution hubs in key long-term growth regions on five continents and in 14 countries. It is focused on providing ethical access to medicines in the three areas of; global medicine supply; clinical trial, unlicensed and licensed medicines.

During the past month the MSCI World Index and the S&P 500 were up by 6.5% and 7.1% in US$ respectively, driven by the continued rise in the large tech stocks and the FAANGS in particular. The UK market under-performed the global indices with those UK indices associated with smaller companies faring much better as has been the case in recent months. The FTSE 100 was up by 0.5%, the Small Cap Index was up by 3.4%, while the Fledgling Index was up by 3.7% for the month and the AIM All Share Index produced an amazing performance, increasing by 8.9%.

While our overall performance was dragged down by our 29% exposure to property, we are nevertheless pleased with the overall performance of our portfolio which was up by 2.8% during the month. After providing for the company expenses the net performance as reflected in the NAV was an increase of 2.7%.

Cash was conserved to pay the dividend, comprising 4.6% of the portfolio at month end.