As we are now about to lap one year since the first lockdown, words cannot do justice to what a 12 months it has been for us all.

The UK market has at last begun to recover some momentum and, heaven forbid, overseas investors are even starting tentatively to re-allocate their money back towards the UK. Rising inflation expectations and, in turn, a normalisation of sovereign bond yields have been the talk of markets this year. This has led to some notable price moves that, in parts, we have seen as an opportunity.

Firstly, there are a number of FTSE 100 names that I believe to be trading at extremely attractive prices. Large-cap companies, such as AstraZeneca, Unilever, Smith & Nephew and Experian, have fallen out of fashion in recent months as investors have instead turned to more cyclical sectors, like banks and miners. Regular readers will know that we look to invest in high quality global businesses with long-term records of growth and look to add to our investments in such companies when the market, from time to time, forgets just how good they are. Now is just such a period.

I find it extraordinary, for example, that shares in AstraZeneca are now back down to flat over 12 months, despite all the good they have achieved in COVID-19 vaccinations and oncology over that time period. We initiated a position in AstraZeneca in January this year and continued to add to our shareholding on weakness seen in February. Experian, the credit data business, is another new investment in the Fund that we have been adding to on weakness. We have followed Experian for a number of years and are delighted to have had a chance to bring this company into the Fund, at what we see as a sensible valuation.

Unilever and Smith & Nephew have both been in the Fund for 20 years and have been loyal friends to unit holders. We added to both in the period. Both of these businesses are trading at material discounts to their US, European-listed peers, which we see as unjustified, and we are happy to build our positions further, confident that they will re-rate higher in time. It is just a matter of patience.

We added to our position in Auto Trader in a brief moment of share price weakness during February and we supported JD Sports in a recent capital raising to pay for their ongoing expansion in the US. Very few UK retailers have successfully cracked the States, but JD Sports have been in the US for a few years now and, so far, have made excellent progress thanks to their strong relationship with key suppliers Nike and Adidas.

In order to fund these investments, we reduced some of our small-cap positions, where positive performance meant that our allocation to this part of the market was at the top of our typical 10-15% weighting within CHUK. Arix Biosciences and Porvair were both trimmed, but we remain confident in the outlook for both and hold both, to a larger extent, in Church House UK Smaller Companies Fund.

We are now essentially fully invested, with cash below 1% at the beginning of March. This reflects our confidence in the outlook for UK markets and, especially, the businesses that we are investing in.

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