The FTSE Small-Cap and AIM All-share markets were down 1.5% and 1.9% respectively, and -8.2% and -15.9% year to date. The Church House UK Smaller Companies Fund was equally as depressed, off 3.2% over April and -19.6% year to date.

The move in individual stocks has been rather indiscriminate regardless of reporting good news or bad. For example, Fevertree Drinks and AG Barr, who both reported in the first quarter, are together consumer staples businesses that manufacture and sell fizzy drinks; mixers and IRN-BRU respectively. However, AG Barr is actually up year to date, 12%, whilst Fevertree is down 33%. We have been adding to Fevertree at these levels.

The pain in the portfolio has been felt elsewhere, notably in the healthcare and technology sectors. Here we have been adding to Ergomed and Keyword Studios. We have also topped up our positions in Big Yellow Group, Close Brothers Group and Porvair.

Some good news for the portfolio has been from M&A activity. As highlighted last month, Brewin Dolphin was bid for by Royal Bank of Canada for £1.6 billion at a 62% premium to the market price, representing 2.8% of the wealth manager’s AUM – a very healthy offer that shareholders should accept. On the back of this move, we sold the entire position at the start of the month.

At the beginning of May, our top holding, Ideagen, agreed a £1.1 billion takeover from London-based Private Equity firm, Hg Pooled Management. We will discuss this transaction further in next month’s commentary.

In this current market we certainly have opportunities up our sleeve to deploy this dry powder.

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.