Our portfolio performed in line with the UK market and ended the month on a positive note.  However, after providing for the expenses and the dividend the NAV declined by 2.3%.  The portfolio was up by 0.72% for the month as compared to the FTSE 100 which was up by 0.77%, the FTSE 250 Index which increased by 0.37%, the AIM All Share Index up by 0.19% and the Small Cap Index increasing by 1.14%.  The FTSE 100 Index closed the end of the first quarter up by 1.78%, outperforming its European peers largely thanks to the many larger, older and more traditional commodity and energy-related stocks including BP and Royal Dutch Shell which have been benefiting from soaring global oil and metal prices as a result of the war in Ukraine.

The Global markets were also stronger, regaining some of the huge losses reported in previous months with the S&P500 index increasing by 3.58% while the tech heavy NASDAQ increased by 3.41% during the month. While the UK market was up, these indices were down over the quarter by 4.95% and 9.10% respectively. The MSCI was also down for the quarter by 5.53% in spite of recording an increase for the month of 2.52%.  Treasury yields inverted this month for the first time in years, signalling a possible recession while the roller coaster ride for U.S. interest rates continued with interest rate volatility currently well above its average over the past decade and nearing the highs reached during the peak of the COVID crisis in March 2020.

Despite the spread of the omicron coronavirus variant, the British economy grew 6.6% year-on-year in the final quarter of 2021, slightly more than initial estimates of a 6.5% increase and following a downwardly revised growth rate of 6.9% in the third quarter.  The major impetus came from public expenditure which recorded the biggest increase of 10.5%, followed by household spending of 8.1% and then business investment. At the end of 2021, the economy was just 0.1% below its pre-pandemic peak.

 In the commodity markets, Brent crude futures declined from recent highs of around $120 per barrel as International Energy Agency member countries met to discuss a further release of emergency oil reserves.  They had previously agreed on March 1^st to release around 60 million barrels and US president Joe Biden announced a release of 1 million barrels per day for six months starting in May, the largest release ever from the US Strategic Petroleum Reserve.

During the month we sold our holding in JD Sports, continuing to reduce and consolidate the holdings in the portfolio.  Cash currently comprises 5.2% of the portfolio at month end.