The more cyclical sectors, such as Mining, Leisure and Financial Services, were the top performers, with the only two sectors in negative territory for the month, Consumer Staples and Pharmaceuticals, both sectors that traditionally are seen as more ‘defensive’ and that tend to get left behind when the wider market is roaring ahead.

During the month, we were busy putting money to work predominantly in existing portfolio investments, but also introduced a new investment to the Fund, Avon Rubber. Avon is a business that we have admired for many years and have always kicked ourselves for never having owned the shares. Avon make respiratory protection equipment (gas masks) for military, law enforcement and fire personnel and they have been the preferred supplier of masks to the US Army for decades. Avon shares sold-off on the back of a contract delay announced in December and we took this opportunity to begin building a position. We expect Avon to continue its excellent growth rate in coming years and are particularly encouraged by their recent UN contract win.

While more cyclical names rallied in December, a number of our higher quality names sold-off to what we saw as attractive levels, and so we further added to these positions. Of our more international-focused investments (still London listed though), we were buyers of translation services provider RWS Holdings, software provider Ideagen and Beazley, the Lloyd’s insurer. With the worries surrounding Brexit earlier in the month, we had the chance to increase our investment in more UK-oriented names, such as Shaftesbury, Softcat, Cranswick, Trainline, Liontrust and, on the back of an encouraging meeting with their CFO, Redrow. Shares in all of these companies subsequently rose on news of the deal having been struck. As one can see, we were adding across multiple sectors during the month, reflecting our optimism that there is still good value to be seen in much of the small and mid-cap UK market.

We are quietly optimistic for market returns heading into 2021 and this is reflected in our cash weighting, at the time of writing, now being down to 2.4%.