The summer was a wash out in the UK and the market wasn’t dissimilar.
The FTSE 100 is back below where it started, falling -3.4% over the month with the FTSE 250 and AIM All-Share following suit, off -2.8% and -3.1% respectively.
We were active over the month, cutting two positions, initiating in a new one and adding to one. After a short (3 years) but positive dalliance, we sold our position in Heineken in the CH UK Equity Growth Fund. We allow ourselves a small allocation to global stocks, circa 15% and within the IA framework for the UK All Companies sector, and we felt that we could improve this allocation by investing the proceeds elsewhere. We aim to use this global allocation to invest in the ‘best of the best’ taking inspiration from our CH Esk Global Equity Fund and allocating to sectors where the UK lacks exposure. With both Young’s and Fuller’s selling their breweries in the past 15 years, Heineken was the perfect fit and over the past three years has performed well for the fund.
We used the Heineken proceeds to initiate a position in Young’s in the fund. The pub co had a rough time last year on the back-end of covid, coupled with the tube and rail strikes. However over the first period of 2023, revenues have improved and the company has been implanting continued investment in improving and growing the estate. With the Rugby World Cup and Cricket World Cup in the final months of the year to look forward to, we hope to see the company continue to generate good returns for shareholders over the medium to long term.
Our second sell of the summer was Shaftesbury Capital, which we have held in the portfolio for over 15 years. The portfolio has grown in size over time and the position was getting increasingly smaller; so we decided to cut the position, whilst retaining it in our CH UK Smaller Companies Fund. Despite the macroeconomic uncertainty the newly combined estate does contain the best of the best of London real estate and the new management team have been active since completion. A new £200m loan has been secured and the company has instructed to sell their Fitzrovia assets for in excess of £100m. Proceeds were used to add to Croda, whom despite their summer sell-off we feel offers an excellent opportunity to add to the UK’s leading speciality chemicals business.
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.