Earlier in the month the US Federal Reserve reduced the fed funds rate by 25 bps as a result of ongoing global economic weakness and muted inflationary pressures in the US. Furthermore, US consumer confidence was weaker than expected in September, falling 9.1 points to 125.1, while durable goods orders rose 0.2% in August. Non-defence capital goods orders fell by a similar amount and were revised lower for the prior month, indicating that capital spending in the US continues to weaken.

Preliminary economic data for the Eurozone in September was also weak, signalling that the economic slowdown is unlikely to abate. The factory sector appears to be contracting at least as fast as it did during the sovereign debt crisis and it remains to be seen if the recent move by the ECB to cut rates and restart QE will be enough to reverse the current trend.

In the UK, gross domestic product (GDP) was confirmed to have fallen by 0.2% in the second quarter of 2019 with services providing the only positive contribution to growth in the output approach to calculating GDP. Private consumption, government consumption and net trade contributed positively, while gross capital formation contributed negatively to GDP growth, which, compared with the same quarter a year ago, increased by 1.3% to June 2019. The major world markets as represented by the MSCI World Index and the S&P 500 rebounded in September with these indices up by 1.9% and 1.7% respectively. The UK market was also up in with the FTSE 100 Index increasing by 2.8% while the Small Cap Index was the best performing index, increasing by 3.3%. The Fledgling Index did not perform as well, increasing by 1.0% while the AIM All Share Index was the worst performing index, declining by 0.02% during the month. Our portfolio of investments performed better than the market, increasing by 3.1% during the month which, after allowing for expenses resulted in a 2.8% improvement in the NAV. As mentioned previously, the positioning of the portfolio has, to a large extent been completed, with a few smaller names to be sold as we were un-able to find buyers for these illiquid stocks. Accordingly, our positions in M&C Saatchi, Photo-me and Huntsworth were sold increasing the cash in portfolio while adding Abcam to the portfolio.