The US economy grew by 2.0% year-on-year in the fourth quarter of 2025, slightly below the previous quarter’s 2.3%, with recent business surveys suggesting the economy continues to expand albeit at a slower pace. Inflation stayed contained, with CPI at 2.4% in February. Manufacturing activity strengthened, supported by improving new orders, while services growth slowed modestly as softer demand and geopolitical uncertainty weighed on business sentiment.

The Euro Area economy grew by 1.2% in the fourth quarter of 2025, marking the slowest pace of growth in over a year. While manufacturing activity improved due to increased exports, services activity slowed.

The UK economy only grew by 1.0% year-on-year in the fourth quarter of 2025, slowing from 1.3% in the previous quarter. Production rebounded modestly while services growth eased. Inflation remained at 3.0%, with the Bank of England keeping interest rates at 3.75%. Recent business surveys suggest economic activity continues to expand, although at a slower pace.

In March, global equities were negatively impacted by the conflict in the Middle East. The MSCI World Index fell 6.6%, the S&P 500 by 5.1% and Nasdaq down by 4.8%. UK equities were also hit with the FTSE 100 down 6.7%, and Small Cap and AIM indices falling 10.3% and 12.5% respectively. While the conflict is expected to be short term, the markets concern is related to the longer-term impact of supply constraints and higher prices for oil and gas supplies to Europe and Asia.

These concerns led to a sharp rise in UK 10-year gilt yields to as high as 4.9% during the month, edging toward their highest level since 2008. Higher long-term interest rates typically place pressure on valuations, particularly for smaller growth companies whose earnings are expected further into the future. As a result, our portfolio performance was impacted by the conflict in the Middle East and the expectations of higher interest rates but not to the same extent, with the portfolio NAV decreasing by 7.79% for the month, after allowing for all fees and expenses. During the month, we added to our holding in MONY Group and trimmed our holding in Impax Asset Management.

Many portfolio companies reported results or trading updates during March. Boku delivered strong Full Year results with revenue up 30% and adjusted EBITDA up 36%. Medium‑term guidance remained unchanged with >20% organic revenue growth and adjusted EBITDA margin >30%.

Fever-Tree Full Year results showed brand revenue rose 4% YoY (H2 +5%). The US partnership with Molson Coors preserved brand momentum. Liontrust will acquire River Global Holdings in an all‑share deal, adding £2.722bn in AUM, India strategies and experienced managers. PayPoint expects a record FY26 broadly in line with expectations including growing dividends.

Raspberry PI reported Full year revenue of $323m, up 25% YoY with gross profit up 23%. Management expects materially higher revenue and profitability in line with market estimates for 2026. Spectra reported FY2025 revenue of $64.3M, up +30.7%, with adjusted EBITDA of $27.3M, up 82.9%. The dividend was increased by 17% to $0.136/share.

The largest contributors to performance during the month were AJ Bell, Spectra Systems and Raspberry PI while AEW UK Reit, Dunelm and FeverTree were the largest detractors from performance.