Both catalysts substantially knocked quality growth stocks, which is CHUK’s core focus, with huge swathes of the portfolio off up to a quarter at its trough. These stocks are still net cash, organically growing revenues and in many cases increasing margins. The price-making ability of the majority of the portfolio means it can weather, and pass on, inflationary costs, and iron out any kinks in the supply chain. Over the course of the quarter, we added to almost every stock in our top fifteen, but notably Croda, Halma, Spirax-Sarco Engineering, Fevertree Drinks and AutoTrader Group who were (unfairly) hit harder than most.

On the ESG aspect of the portfolio, the majority of stocks had little to no business in Russia and Belarus, and those that did (e.g. Diageo & Heineken) shut down their operations swiftly. However, Unilever and Genus are still deriving revenues from those regions (and consequently paying taxes there), and we have written regular correspondence to their boards urging them to cease their operations in the region. We are pleased to note that our correspondence to Bloomberg, with whom we deal and access the market with, resulted in their backtracking and withdrawing terminal access in Russia and Belarus.     

In February we initiated a new position in Ashtead Group, the owner of Sunbelt Rentals, or A-Plant to us in the UK. It is a business we have followed for a number of years, waiting for an attractive entry point, which the market sell-off gave us. The purchase was predominantly funded from existing cash reserves and our sale of Hargreaves Lansdown, which had been underperforming and we could not shake the feeling that they had systems issues. Entirely by luck rather than skill, we managed to exit our position two days before a profit warning based on those system issues. One we were happy to avoid.

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.