Global stock markets continued their recovery from the early April sell-off. Sentiment was helped by the agreement between the US and China to mutually reduce tariffs by 115%. This leaves overall US tariffs at just over 50%, and Chinese tariffs on US goods at just over 30%[1]. Meanwhile, though confidence indices in the US remained weak, the hard economic data remained more robust than feared. Closer to home, UK economic data was also reasonable, and the Bank of England cut interest rates to 4.25%.
Evenlode Income rose +3.0% compared to a rise of +4.1% for the FTSE All-Share and +5.1% for the IA UK All Companies sector. Within the UK market, the preference for domestic companies versus their multinational peers continued, helped by the pound’s recent strength - up +8% versus the US dollar since the start of the year.
The strongest contributors to performance were Smiths Group (+16%), Howden Joinery (+12%), Burberry (+43%) and Diploma (+19%). Smiths Group reported double-digit revenue growth in its latest quarter. Howden Joinery released a positive trading update at the end of April as noted in last month’s factsheet. Burberry’s full year results were ahead of analyst forecasts with improved profitability in the second half. Diploma reported strong interim results with double-digit revenue and profit growth.
The most negative contributors to performance were Diageo (-4%) and LSEG (-3%), which both released trading updates for the first quarter of the year. Diageo reported revenue growth despite tough near-term industry headwinds, reaffirmed full year guidance, and launched a new programme to enhance cash flow and cost efficiency. LSEG reported continued strong revenue growth and confirmed financial guidance for 2025.
In terms of portfolio changes there was less activity than last month, when we broadened out the portfolio by adding five new holdings at the beginning of April. We did though continue to build into these new positions, and initiated another new position, which we will discuss next month.
Many UK-listed quality companies have been out of fashion this year (and particularly those with multinational exposure), but we’ve been reassured by the aggregate fundamental performance of the portfolio. Though not completely immune from current uncertainties, the list of holdings are competitively advantaged businesses with highly cash generative economics, durable business models, and plenty of long-term growth potential.
[1] Source: Peterson Institute for International Economics, updated 14 May 2025.
Global stock markets continued their recovery from the early April sell-off. Sentiment was helped by the agreement between the US and China to mutually reduce tariffs by 115%. This leaves overall US tariffs at just over 50%, and Chinese tariffs on US goods at just over 30%[1]. Meanwhile, though confidence indices in the US remained weak, the hard economic data remained more robust than feared. Closer to home, UK economic data was also reasonable, and the Bank of England cut interest rates to 4.25%.
Evenlode Income rose +3.0% compared to a rise of +4.1% for the FTSE All-Share and +5.1% for the IA UK All Companies sector. Within the UK market, the preference for domestic companies versus their multinational peers continued, helped by the pound’s recent strength - up +8% versus the US dollar since the start of the year.
The strongest contributors to performance were Smiths Group (+16%), Howden Joinery (+12%), Burberry (+43%) and Diploma (+19%). Smiths Group reported double-digit revenue growth in its latest quarter. Howden Joinery released a positive trading update at the end of April as noted in last month’s factsheet. Burberry’s full year results were ahead of analyst forecasts with improved profitability in the second half. Diploma reported strong interim results with double-digit revenue and profit growth.
The most negative contributors to performance were Diageo (-4%) and LSEG (-3%), which both released trading updates for the first quarter of the year. Diageo reported revenue growth despite tough near-term industry headwinds, reaffirmed full year guidance, and launched a new programme to enhance cash flow and cost efficiency. LSEG reported continued strong revenue growth and confirmed financial guidance for 2025.
In terms of portfolio changes there was less activity than last month, when we broadened out the portfolio by adding five new holdings at the beginning of April. We did though continue to build into these new positions, and initiated another new position, which we will discuss next month.
Many UK-listed quality companies have been out of fashion this year (and particularly those with multinational exposure), but we’ve been reassured by the aggregate fundamental performance of the portfolio. Though not completely immune from current uncertainties, the list of holdings are competitively advantaged businesses with highly cash generative economics, durable business models, and plenty of long-term growth potential.
[1] Source: Peterson Institute for International Economics, updated 14 May 2025.