Investment Manager’s Commentary

Your Fund returned -3.1% during the month compared to -3.8% for the IA Global sector (TR).

These are challenging times for investors and corporates. Rising bond yields, conflict in the Middle East, and weaker corporate earnings combine to foster uncertainty and nervousness. The stock market is moving brutally fast to punish companies for any hint of deterioration. In a sign of toughening conditions for all, weaker players are being found out across a swathe of industries, testing the resolve of all investors and reinforcing our own strategic objective to own ‘the best of the best’.

Some of the Fund’s own holdings shared in this month’s volatility. Alphabet reported excellent results for its main advertising-based businesses (Search and YouTube), but its fast-growing cloud services division (‘GCP’) unexpectedly slowed. This is at odds with hopes for an AI-led boom and the shares declined -9.5%. We remain optimistic about GCP’s position in selling AI services and believe it will succeed in developing a substantially larger and more profitable cloud business over the coming years.

Experian’s shares declined -9.7% when US peer TransUnion warned of slowing growth trends. Whatever economic headwinds there may be, we have confidence that they will be more manageable for Experian because of the quality of its customer base and the broad diversity of its product offering.

Over the past couple of years there has been a wider than normal dispersion of returns among the Fund’s investments. This has emphasised the importance of balancing between companies operating in different industries and exposed to a variety of risks and opportunities. It also creates potential for the reallocation of capital towards those areas that to us appear most mispriced. We used last month’s volatility to build our position in several investments, including Experian. These decisions are only possible with a deep appreciation of our companies’ rare quality and a clear focus on longer-term investment outcomes.

Past performance is not a guide to the future. The value of the shares and the income from them can go down as well as up and you may not get back the full amount originally invested. Source: Yealand Fund Services Limited, NAV to NAV in sterling with net income reinvested. Returns are shown net of annual management charge, other expenses and net income reinvested. Returns do not include the effect of initial charges.

Investment Objective and Policy

The Company’s investment objective is to seek to achieve long term (at least 5 years) capital growth with some potential for income.

To achieve the investment objective, the Company’s investment policy is to invest principally (at least 80%) in a portfolio of global equities, and may also invest in other transferable securities, bonds (both corporate and government debt securities), collective investment schemes (“CIS”), warrants, money market instruments, cash, near cash and deposits. The Company may borrow and may enter into underwriting arrangements. It is the ACD’s intention that derivatives and forward currency transactions will only be used for the purposes of efficient portfolio management, including hedging, as defined by the Regulations.

The Company is actively managed and has, with the exception of the above noted minimum, no limit to which it can be invested in each sector or asset type, nor is there any particular geographic focus. The Portfolio Manager has full flexibility to adjust the proportion of the property of the Company depending on their view of market conditions and the assets which it believes are most likely to achieve the Company’s investment objective. From time to time the liquidity of the Company may be increased substantially if judged to be in the interests of investors.

The Company may invest in CIS which have different investment strategies or restrictions than the Company, including the ability to invest in derivatives for investment purposes and to gain exposure to assets which are not expressly listed above. Investment in CIS will usually be limited to those which invest primarily in the assets listed above and without exception, CIS will only be held in so far as the rules permit the Company to gain exposure to the assets held by those CIS.

A Glossary of Definitions which provides definitions to some of the technical language used on this website is available from www.yealand.com/policies.

Comparator Benchmark

To gauge the relative performance of the Fund, Shareholders may compare the Fund’s performance against the Investment Association’s Global Sector. This is not a performance target nor constrains the way in which the Fund is managed. For further information on the Sector and its intended use, please refer to the Fund’s Prospectus.