This period has seen the rates markets take a breather after the big shift in February and early March, the US ten-year has backed-off to 157bp and the UK ten-year to 74bp.

The S&P 500 has made new highs again but the NASDAQ has not followed and has a rather ‘toppy’ look about it. London stocks are a shade higher but Japan has turned down and is looking a bit friendless as COVID-19 threatens again. Within stock markets, there has been a shift back towards staples and pharmaceuticals, which had been looking abandoned, and away from cyclicals, notably the oil companies and banks.

The Fund’s broad asset mix has not changed materially since mid-March, see table, right.

Our floating rate exposure has edged-up a shade with additions to two existing issues in the portfolio from the Leeds Building Society and Royal Bank of Canada. Fixed interest exposure is down a touch after sale of our LB Baden-Wuerttemberg 1.125% 2025 holding and reduction in the GlaxoSmithKline 1.25% 2028 holding. Against this, we have just participated in a (huge) multi-tranche placing of new stock by JPMorgan, we took some of the short-dated (April 2026) sterling issue. The overall duration of the fixed and floating rate holdings remains at 2.6.

Unusually, there was some activity in the zero dividend preference shares that we favour and we were able to add to the issue from NB Private Equity that we hold, due in September 2022. Overall exposure to convertibles and zeros is down, following the maturity of a Remgro issue that we held. Still seeking to increase our weighting in property when we get opportunities, we bought more Tritax Eurobox early in April when their stock was marked-down for no clear reason, and, rather modestly, to the holding in Shaftesbury later in the month.

Within the equity holdings, we have been reducing exposure to smaller companies further with a series of sales in Arix Bioscience and, latterly, in Odyssean IT. A new addition is the London Stock Exchange Group, whose shares fell steeply in March. After getting approval for their takeover of Refinitiv, a realisation of the high costs to LSEG of integrating this business, followed by a huge placing of shares by Thompson Reuters and Blackstone (they had received shares in exchange for Refinitiv), led to some serious indigestion and presented us with a good opportunity.

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