Markets have been buoyant since the lows and massive bouts of volatility this time last year, almost two thirds of the population have had their first vaccine and shops and pubs have opened up.

It is interesting to see where markets have moved from the depths of the coronavirus crisis last year, see chart, right.

FTSE 100: +35%

FTSE 250: + 65%

S&P 500: +78%

As is well documented, the US market has raced away, outpacing the FTSE 100 by a factor of two, driven by their tech heavy constituents. However, what has been under-reported is the strong performance of the domestically focused FTSE 250. Over the course of March and April last year, we sold out our FTSE 100 price takers (Meggitt, Johnson Matthey etc.), and switched into more domestically focused FTSE 250 price makers (Greggs, Trainline, Dechra Pharmaceuticals etc.). These new names are now established positions in the portfolio and Greggs has even creeped into our top 10, despite their stores being closed for the majority of the time we have owned them.

What we are trying to do is buy and hold quality businesses for the long-term, whilst not paying up for them. The hardest part is identifying great businesses but having to sit on our hands and wait for the price to come to our target entry price can be testing at times. We are always looking to invest with a margin of safety and thus patience is key. No truer is this than our most recent new position in London Stock Exchange Group.

We have followed LSEG for many years and have never quite been able to justify an initiation price. Late last year we were worried about their mega-purchase of data provider Refinitiv, yet the share price marched on. Fortunately for us in March this year, the price fell 25% allowing us a fleeting opportunity to build up a stake in the business. A Friday morning trading update led to a blood bath for the stock, falling 14% in a day, as shareholders were sceptical about the management’s ambitious revenue growth targets. We believe this fall merited an attractive entry point into the business at last. LSEG is not just an exchange, it is primarily a data provider with stable revenues and exposure to long-term structural growth in the use of data for trading and investing, fitting into our quality ethos.

On the other side of the ledger, we sold out remaining positions in Porvair and Odyssean Investment Trust. These smaller company names had performed well in our portfolio. Porvair was never truly liquid enough for us to be able to hold a meaningful position. We sold it at a handsome profit, and it remains a holding in our UK Smaller Companies Fund. Odyssean has performed excellently under the management of Stuart Widdowson and Ed Wielechowski, however was our last remaining collective within the Fund and has now been exited.