Business confidence is surging to multi-year highs due to the strength of the economic rebound, booming global trade, an easing of coronavirus lockdowns and the Biden administration securing an infrastructure deal worth about $1tn to upgrade roads, bridges, and broadband networks over the next eight years in the USA.  Globally supply chain bottlenecks are easing with the number of ships waiting to get into ports declining despite an increase in shipping volumes.

Recent PMI data for the United Kingdom reaffirmed that the U.K. is on track for vastly improved economic growth this year with the composite PMI above 60 for three consecutive months. When the Bank of England’s Monetary Policy Committee met recently, it made no change to its monetary policy decision to keep interest rates on hold at 0.1%, despite prices rising faster than it had expected.  Nevertheless, it did revise up its expectations for GDP growth in Q2 2021 by about 1.5% relative to what it expected in May.

Despite this good news, the government’s decision to delay the fourth and final phase of its plan to ease pandemic rules in England by around one month had a mildly unsettling effect on the markets particularly in our property and healthcare related exposures. While the FTSE 100 was up by 0.2%, the FTSE 250 Index was down by 1.4% and the AIM All Share Index was down by 0.6%. The small caps performed well by comparison with the Fledging Index up by 0.8% and the Small Cap Index up by 1.1%.  Elsewhere, Global markets ended the month in positive territory, with the MSCI increasing by 1.4% and the S&P 500 up by 2.2%. The major driver of performance in these markets was the large technology stocks in the US with the NASDAQ up by a massive 5.5%. 

While dividend income during the month from our investments continues to improve and YTD is well ahead of last year’s receipts, we were disappointed by the 0.5% decline in the value of our portfolio.  Costs were contained during the month and hence the overall decline in the portfolio value flowed through to a similar decline of 0.5% in the NAV for the month.  There were no changes to the portfolio holdings during the month and cash received by way of dividends resulted in a slight increase in the overall cash position which currently represents 2.1% of the portfolio value as at the end of June.