Legal Entity Identifier: 213800ON67TJC7F4DL05
The unaudited net asset value of Athelney Trust was 170.3p at 30 April 2025.
Fund Manager’s comment for April 2025
The US economy contracted by 0.3% in Q1 2025, its first decline since early 2022 and below market expectations for modest growth. The downturn was driven by weaker consumer spending and a sharp drop in federal expenditure, though fixed investment remained robust. Export demand deteriorated due to tariff pressures, and business confidence hit a near one-year low. The services sector also slowed amid weaker new orders and a spike in job cuts, mainly due to government downsizing. Inflation continued to ease in March, with headline CPI falling to 2.4%. The Federal Reserve held rates at 4.25%–4.5%, citing tariff-related inflation risks but maintained guidance for 50bps of rate cuts in 2025.
Eurozone GDP grew by 0.4% in Q1 2025, a modest acceleration marking continued economic recovery and unemployment dipped to a record low of 6.1% in February. The ECB cut key interest rates by 25bps in a widely anticipated move, citing progress in bringing inflation sustainably back towards its 2% target. The Manufacturing PMI rose slightly in April, its highest in over two years, while the Services PMI slipped, marking the first contraction since late 2024. Business sentiment also declined sharply, reaching a near five-year low.
In the UK, the Bank of England kept the Bank Rate unchanged at 4.5% in March, but stressed that any easing would be gradual, especially with inflation expected to rise to 3.75% by Q3 despite lower energy prices. The Monetary Policy Committee highlighted trade tensions and geopolitical risks as key threats. Manufacturing remained under pressure, particularly in metals and transport, while services growth was modest. Consumption and public spending offered limited support, offset by declines in trade and investment. April PMI data echoed this sluggish outlook with falling manufacturing output and rising job losses and a decline in the services PMI. Global uncertainty and weak domestic demand further dampened business confidence and hiring.
The global equity markets rebounded in late April when President Trump announced a 90 day pause on reciprocal tariffs. The MSCI World and Nasdaq were up in the month by 0.7% and 0.9% respectively, while the S&P 500 declined by 0.8%. In the UK, the FTSE 100 fell 1%, the FTSE250 rose 2.1%, and the Small Cap Index and AIM All-Share rose 0.6% and 1.3% respectively. The Fledgling index underperformed and was down 1.3% for the month.
Our portfolio rebounded in April, with the portfolio up by 1.3%. After providing for all the expenses and the payment of a 7.6p dividend, the NAV declined by 3.6%. During the month, we reduced our holdings in Rightmove, Games Workshop and Tritax Big Box. The largest contributors to performance were Games Workshop, Dunelm and PayPoint all rising by over 5%. The largest detractors from performance were 4Imprint, Impax Asset Management and Treatt.
The board announced a significant change to the fee model, aligning asset manager compensation entirely with fund performance. Under the revised arrangement, no annual management fee will be charged unless the portfolio produces positive absolute returns over the year, reinforcing confidence in the fund’s investment strategy.
