Paul Niven – Market Snapshot

Paul Niven

Paul Niven

Managing Director, Portfolio Manager and Head of Portfolio Management, Multi Asset Solutions

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During April, our net asset value (NAV) return was 4.6% and shareholder returns were 6.8%, in comparison to the FTSE All World Index return of 4.0%. April was a strong month for equities on the whole, although Japan was a notable laggard.

The Covid-19 vaccination rollout continues to be a key factor in the pattern of global growth, with the US and UK among the global leaders, while previous laggards Canada and continental Europe are seeing vaccine rollout rates pick up. Restrictions are being eased in the UK, with outside hospitality now open and indoor hospitality expected to reopen in mid-May. The picture, however, is less positive in certain emerging market countries, notably India, where cases have increased exponentially over recent weeks. Japan is also in the throes of battling a new wave of infections.

The economic recovery continued, supporting investor sentiment, with US and European consumer confidence surveys registering gains and the US unemployment rate falling in April. There was also a rise in UK retail sales as non-essential shops reopened.

President Biden unveiled plans for further spending packages, after the passing of the $1.9 trillion American Rescue Plan stimulus package in March. While the Rescue plan passed through Congress relatively easily, given the proposed tax rises incorporated in these two new plans, these are likely to be more contentious.

Equity market returns over April were generally positive, with outperformance from the US and UK while emerging markets, Japan and Developed Europe ex UK lagged in local currency terms. Absolute performance across our strategies was generally strong over the month, as were relative returns. Our Small Cap exposure performed very strongly in both absolute and relative terms, as did both our US equity exposure.

Burford Capital was a top performer for the Trust this month, with our overweight position at fund level benefiting overall returns given the stock’s outperformance of the broader market over April. An overweight to Smurfit Kappa also benefited relative returns.

In contrast, an overweight in poor performer HDFC Bank detracted over April, as did an underweight to Apple. We ended the month at a discount of 5.2%, having averaged a discount of 6.1% over April.

The Company is an investment trust and conducts its affairs so that its shares can be recommended by Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority’s rules relating to non-mainstream investment products and intends to continue to do so.

The company is available for retail investors in the UK, professionally advised private clients and institutional investors who seek growth in capital and income from investment in global markets and who understand and are wiling to accept the risks, and rewards, of exposure to equities.

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