St Ledger’s Day is rapidly approaching. And according to the old city adage investors should have returned from their summer break in a positive mood. Yet Covid continues to dominate the headlines and even with the success of the vaccination campaign infections are rising, supply chains are faltering, and economic momentum is slowing. But despite the recent deceleration the underlying economy is strong. Consumer and corporate balance sheets are robust and there is considerable pent-up demand. The reflation trade has paused but is not over. The fund returned 3.1% versus 2.6% for the MSCI Europe Index.

In a much anticipated speech to the Jackson hole gathering of central bankers, the chair of the Federal Reserve sent a strong hint that the Fed will begin tapering this year. The psychological impact of the move will be considerably greater than its mechanistic impact. Investors should focus on the positive signal that tapering sends; the economy is healing and stimulus can begin to be withdrawn. Tapering may lead to a short term increase in volatility but it will not derail the bull market. Equity markets function as a discounting mechanism and will not correct until collectively investors believe the end of the economic cycle is in sight. Many things can change the collective mindset, often with little warning, but for the moment the path of least resistant is higher.

The fund’s largest holding Uniphar gained ahead of its interim results. The shares have performed exceptionally well due to strong growth in revenues and profits. Despite making acquisitions leverage is low and management are open to pursuing larger transactions as it seeks to develop global platforms for its Commercial & Clinical and Product Access businesses. Both divisions have grown substantially and look to have significant scope to grow. Two of last month’s outperformers, Nordic Entertainment and Volution, continued their recent outperformance. Prudential Plc gained as it released well received interim results. Numbers were strong across the board with new business sales growing 21%. Post the demerger of Jackson National later this month the group will be an Asian focused insurer trading at a significant discount to its nearest peers. Another insurer, Axa, performed well. The company’s 2Q21 results were positive and arguably the strongest for a considerable time. Earnings were more than 10% ahead of expectations but it was the breadth of the beat that stood out. Under CEO Thomas Brubert, AXA has streamlined its business, exiting or disposing of those most exposed to volatile financial markets and redeploying capital into underwriting. This improvement has yet to be fully reflected in the share price.

Creo Medical declined as it announced an equity raise to fund expansion. The early stage of the company’s product suite makes it almost impossible to value the business accurately. However, it offers a range of products with strong IP backing that can dramatically improve patient outcomes and reduce costs. Its MicroBlate tissue ablation device has recently been used to treat patients with unresectable pancreatic tumours with very encouraging results.

A new position was initiated in Smith & Nephew.

St Ledger’s Day is rapidly approaching. And according to the old city adage investors should have returned from their summer break in a positive mood. Yet Covid continues to dominate the headlines and even with the success of the vaccination campaign infections are rising, supply chains are faltering, and economic momentum is slowing. But despite the recent deceleration the underlying economy is strong. Consumer and corporate balance sheets are robust and there is considerable pent-up demand. The reflation trade has paused but is not over. The fund returned 3.1% versus 2.6% for the MSCI Europe Index.

In a much anticipated speech to the Jackson hole gathering of central bankers, the chair of the Federal Reserve sent a strong hint that the Fed will begin tapering this year. The psychological impact of the move will be considerably greater than its mechanistic impact. Investors should focus on the positive signal that tapering sends; the economy is healing and stimulus can begin to be withdrawn. Tapering may lead to a short term increase in volatility but it will not derail the bull market. Equity markets function as a discounting mechanism and will not correct until collectively investors believe the end of the economic cycle is in sight. Many things can change the collective mindset, often with little warning, but for the moment the path of least resistant is higher.

The fund’s largest holding Uniphar gained ahead of its interim results. The shares have performed exceptionally well due to strong growth in revenues and profits. Despite making acquisitions leverage is low and management are open to pursuing larger transactions as it seeks to develop global platforms for its Commercial & Clinical and Product Access businesses. Both divisions have grown substantially and look to have significant scope to grow. Two of last month’s outperformers, Nordic Entertainment and Volution, continued their recent outperformance. Prudential Plc gained as it released well received interim results. Numbers were strong across the board with new business sales growing 21%. Post the demerger of Jackson National later this month the group will be an Asian focused insurer trading at a significant discount to its nearest peers. Another insurer, Axa, performed well. The company’s 2Q21 results were positive and arguably the strongest for a considerable time. Earnings were more than 10% ahead of expectations but it was the breadth of the beat that stood out. Under CEO Thomas Brubert, AXA has streamlined its business, exiting or disposing of those most exposed to volatile financial markets and redeploying capital into underwriting. This improvement has yet to be fully reflected in the share price.

Creo Medical declined as it announced an equity raise to fund expansion. The early stage of the company’s product suite makes it almost impossible to value the business accurately. However, it offers a range of products with strong IP backing that can dramatically improve patient outcomes and reduce costs. Its MicroBlate tissue ablation device has recently been used to treat patients with unresectable pancreatic tumours with very encouraging results.

A new position was initiated in Smith & Nephew.