London stocks lagged with a gain of less than 2% and the Japanese markets came off a touch. Inflation is still recording big numbers (5.4% US CPI for September, 3.1% UK), but steep falls in bond markets look to have priced this in now.

Quite possibly we reached peak worry for this mini cycle on 21st October when Unilever reported an increase in their prices of 4.1% in the third quarter (passing on the jump in raw material costs) and expected to be doing the same in Q4. It seems clear that on-going supply chain problems, high energy prices and inflation will continue to affect companies for a while yet and we can expect continuing high levels of volatility amongst individual stocks.

It was quite a mixed month for the Fund with some big swings amongst the individual holdings. The unit price was up, though only modestly, not helped by sterling’s gain of 2% v. US dollar over the period and the unit price also went ex-dividend on the first of October. We did not make any changes to the Fund’s holdings.

Detracting from performance were several of the Japanese holdings, notably M3, Inc, which were marked back sharply after their Q2 figures. The figures were better than expected with a 30% increase in sales, but analysts were divining slower growth ahead. Also detracting were Sumitomo Mitsui Financial, which sold off after a strong September. Rio Tinto came off with lowered expectations for earnings from iron ore, and, lastly, GN Store Nord fell sharply after first revising down their guidance for growth in their key hearing aid unit and then revising down guidance for growth in audio, citing delays in component deliveries.

Rather more positive so far has been the Q3 reporting season in America. The two biggest holding in the portfolio, Alphabet and Microsoft, reported excellent figures and recorded gains of 9% and 16% respectively. T Rowe Price reported strong Q3 figures and made their first significant acquisition in a number of years while Ansys, Intuit and Oracle all moved up strongly, recovering from September’s weakness. Paccar, the truck manufacturer, gained 14% following a series of broker recommendations. The only disappointment among those reporting so far has been Mastercard, their figures were good, beating expectations but a sour note from Visa, which reported a day earlier, on cross-border transactions, depressed the sector.

Away from the US, Hermes delighted with their Q3 figures and their stock gained 14%, the other luxury stocks also did well, LVMH and L’Oréal both being features. Nestlé put in a better post figures performance (up 7%) than Unilever, which were slightly down over the period, though the latter were recovering from weakness earlier in the month.