The FTSE 100 Index in fact has broken above the 7,300 level and is now trading at the highest level it has been since pre-COVID. Our view is that the UK economy will continue to recover from the depths of 2020 and that quality businesses operating in growth markets stand best to benefit in these conditions. There will, of course, be bumps along the way, but the direction of travel is overwhelmingly positive.

We took the opportunity of late-summer volatility to initiate a new investment in videogames developer Frontier Developments, the studio behind Jurassic World Evolution and Planet Coaster. The UK is a market-leader in video games development with some of the most popular titles and characters coming from these shores; from Tomb Raider in Derby to Grand Theft Auto from Edinburgh. Nowadays, Frontier is at the forefront of this trend and over the summer reported a rise in profit and revenue for its financial year despite not releasing a major new game, leading to a confident outlook for growth over the next two years. The pipeline includes the new Warhammer 40,000 game and the first official Formula One management game (for years). Frontier is an exciting growth business to add to the portfolio and we hope that it will be a feature of the Fund for many years.

Speaking of long-term holdings, Shaftesbury (the owner of the Chinatown, Seven Dials and Carnaby Street estates) has been in the portfolio for 15 years now. Shaftesbury’s West End ‘villages’ were hit hard by lockdown and, even after reopening, the lack of foreign tourists and office workers in central London held back footfall. We supported Shaftesbury when they raised equity last year and were pleased to see improved trading conditions when they reported recently. Brian Bickell, CEO, noted a ‘rebound in footfall and trading across our locations … boosted by the rapidly growing return of the local office-based workforce’. We added to our position in Shaftesbury over the month, as we believe that there is plenty more growth to come for this West End landlord as we head into the Christmas season and when international tourists do return to London in earnest.

Swiss oncology leader Roche has been in the Fund almost as long as Shaftesbury and we were both surprised and heartened when, out of the blue, they announced that they would be buying back a material portion of Roche equity from Novartis for a mere CHF 19bn (£15.4bn). Novartis had held roughly a third of Roche voting shares since the early-2000s and this buyback from Roche is both an emphatic display of financial strength and will also consolidate the ownership structure. It is also funny and somewhat alarming to note that these were bearer shares being purchased, so somewhere in Switzerland a delivery of billions of francs in the form of paper share certificates will be taking place!

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.