Among risk assets the mood has also changed to the benefit of the more cyclical and ‘value’ plays, which is reflected in a 10% leap in UK and European stocks (where proportionately more of these assets are to be found), compared to a ‘mere’ 5% rise in US markets.

Within the Tenax Absolute Return Strategies Fund, the direction of travel of our asset mix remains as it has been since the February/March crisis. The table shows the progression of the asset mix over the year and highlights the changes, see chart right.

The proportion of the Fund’s portfolio in cash and near-cash assets continues to shrink. This results from sales and maturities of existing notes, but we continue to find this an attractive area for cash investment and added a new supranational (EBRD) holding, paying 1% over SONION this month. We remain the most active in the credit markets, adding a new holding in a Beazley 5.5% USD bond due 2029 and participated in new issues from Bunzl and Travis Perkins. We took profits from a Marks & Spencer 2027 issue that we had bought in the depths of the March gloom, but added a new, slightly shorter-dated issue from Marks when they came to market in mid-November.

We had a couple of opportunities to add to the infrastructure holdings as BBGI came to the market to raise further funds as did Gresham House Energy Storage right at the end of the period. The convertible exposure shows a reduction, which is the result of the maturity of a long-standing National Grid holding. As ever, we are keen to increase our convertibles exposure and feel more optimistic about this now as new issues are coming to market.

The equity exposure has, of course, benefitted from recent market moves but the percentage exposure has not moved significantly as we have sold-down some of this into the recent strength. We expect to see more opportunities now as the markets go through some quite sharp ‘rotation’ and individual stock volatility is on the rise again.