However, despite the dreary market sentiment, the Fund had some strong underlying performers, most notably Unilever and Diploma. Unilever, on the back of its strong August results, which were significantly better than expected (boosted by hygiene products and demand for ice cream), continued its recent form on the back of two successful EGM votes to move the company under one UK listing and jurisdiction. The only challenge remaining for the move is the potential and incredibly punitive Dutch bill that will charge global multi-nationals who want to leave the Netherlands. The ‘exit tax’ if voted through, could cost the company up to €11 billion and certainly scupper the plans to unify the company structure. 

Mid-month Diploma announced a placing for its purchase of Windy City Wiring Inc, which has been described as ‘game-changing’ by the sell-side analysts. The company was our third largest holding and rocketed up to first after the stock leapt 27% on the day of the announcement. The purchase for circa £360 million represents a significant, but attractive, step-change for the business and will add the distribution of low voltage cables to the group company’s repertoire.

On the reverse side of the trade sheet, we sold our final position in BHP Group. Over the course of the summer we have been halving our exposure to the mining sector, which has performed strongly. Rio Tinto remains.

We sold the remainder of our Standard Chartered in favour of building up our new position in Hargreaves Lansdown. Standard Chartered, aside from being a big bank listed in the UK, meaning it is much unloved, was rocked by the money laundering scam reported by the Financial Times. We decided to sell the position and put the proceeds into Hargreaves Lansdown. Finally, we exited our position in Phoenix Group Holdings, which has performed strongly, and added to the Lloyds of London insurer Beazley, who we initiated in during March and we believe to be a very well-run business that will be one of the main beneficiaries in a sector re-rating.