The FTSE All-Share Index rose 4.3% while the FTSE All-Stocks Gilts Index fell almost 8% as longer-term interest rates began to move up. The Balanced Equity Income Fund rose 4.1% (‘B’ Income units). Within the Fund’s portfolio, we continued with the pattern of the final quarter of 2020, reducing the smaller company exposure and rationalising some of the sector exposure. By the end of March, smaller company exposure was down to 2.3% and the total number of holdings was 53 (down from 63 at the end of September last year).

The rally in the oil stocks picked-up through February and early March, we used this to sell out of the remainder of the holding in Royal Dutch Shell, leaving the portfolio with no exposure to the sector. Most of our new investment went to building-up holdings in our core large-cap investments, most concerned to re-build the Fund’s ability to provide long-term returns with a growing dividend after the ravages of 2020. Among the staple goods and pharmaceutical company holdings, we added to: AstraZeneca, Reckitt Benckiser, Smith & Nephew, Cranswick and Unilever. Elsewhere, we added to Bunzl, DS Smith and Relx. Smaller company holdings that have gone from the portfolio were Clinigen, Craneware and Standard Life Investment Property, decent companies all but not really with a place in the Fund now.

We continued to add to the holding in Barclays and, in other financials, we added to Phoenix Group and Rathbone Bros. After an encouraging meeting with the CEO of Target Healthcare, we added further to this holding, which now appears in the top fifteen, financing this with the sale of the small holding in Triple Point Social Housing. We rate BBGI Global as the highest quality of the infrastructure companies and have added here (also now in the top fifteen) at the expense of HICL Infrastructure. We have not been adding to fixed interest, which will shrink further with the maturity of the National Grid index-linked issue in June. The overall disposition of the Fund at the end of the quarter is shown in the pie chart, see right, the overall beta to the FTSE All-Share index remains at around 0.8.