The main economic event of 2025, ‘Liberation Day’, happened just after month end. March though, was an appetiser for the big day, with the US introducing a 25% tariff on imports from Canada and Mexico and an increase from 10% to 20% for Chinese imports. As tariff risks hit home, leading economic indicators dropped, and the US market and dollar fell. At home, the Spring Statement passed much more quietly than last year’s Autumn Statement.
Evenlode Income fell -4.7% compared to a fall of -3.3% for the IA UK All Companies Sector and -2.3% for the FTSE All-Share. The UK is currently viewed as a relatively safe port in the storm – given its more stable political backdrop and limited direct tariff risk – and had a strong month versus US indices, with the S&P 500 and Nasdaq Composite down -8.0% and -10.4% respectively, in sterling terms.
The fund’s lack of exposure to insurance, oil and utility stocks was unhelpful to relative performance, as was the fund’s exposure to dollar earners. The biggest negative contributors were Bunzl, Spectris and Diageo. Bunzl’s full year results fell short of market expectations, but it delivered good profit growth and its defensive characteristics are attractive given the uncertain economic outlook. Diageo’s share price fell in anticipation of new tariffs being introduced in the US, its largest market. Spectris’ share price decreased on no specific news.
The most positive contributors were Unilever, RELX and Hays. Hays’ share price increased following the announcement by the German government that it plans to significantly increase spending on defence and infrastructure, which could in turn drive higher economic growth in what is Hays’ largest market. Unilever and RELX’s share prices increased on no specific news.
We are cognisant of the new era that the world is in, protectionism and nationalism on the rise. The change is profound. At the same time though, quality businesses have a history of weathering political and economic adversity and can be remarkably adaptable to change. Investment in national economies will also be crucial in coming years with the goal of driving better growth and resilience. Structural trends include the need for investment in digitalisation and automation, research and development, health care, upgraded infrastructure and industrial facilities, and improved energy efficiency and security. Portfolio companies are well placed to meet these needs. In early April, with the further market sell-off, the Evenlode Income portfolio has found itself trading on a historic free cash flow yield of more than 6% and a dividend yield of 3.3%. Its bedrock is composed of repeat-purchase holdings, that we continue to think are well placed to compound cash flow at a good rate over coming years.
The main economic event of 2025, ‘Liberation Day’, happened just after month end. March though, was an appetiser for the big day, with the US introducing a 25% tariff on imports from Canada and Mexico and an increase from 10% to 20% for Chinese imports. As tariff risks hit home, leading economic indicators dropped, and the US market and dollar fell. At home, the Spring Statement passed much more quietly than last year’s Autumn Statement.
Evenlode Income fell -4.7% compared to a fall of -3.3% for the IA UK All Companies Sector and -2.3% for the FTSE All-Share. The UK is currently viewed as a relatively safe port in the storm – given its more stable political backdrop and limited direct tariff risk – and had a strong month versus US indices, with the S&P 500 and Nasdaq Composite down -8.0% and -10.4% respectively, in sterling terms.
The fund’s lack of exposure to insurance, oil and utility stocks was unhelpful to relative performance, as was the fund’s exposure to dollar earners. The biggest negative contributors were Bunzl, Spectris and Diageo. Bunzl’s full year results fell short of market expectations, but it delivered good profit growth and its defensive characteristics are attractive given the uncertain economic outlook. Diageo’s share price fell in anticipation of new tariffs being introduced in the US, its largest market. Spectris’ share price decreased on no specific news.
The most positive contributors were Unilever, RELX and Hays. Hays’ share price increased following the announcement by the German government that it plans to significantly increase spending on defence and infrastructure, which could in turn drive higher economic growth in what is Hays’ largest market. Unilever and RELX’s share prices increased on no specific news.
We are cognisant of the new era that the world is in, protectionism and nationalism on the rise. The change is profound. At the same time though, quality businesses have a history of weathering political and economic adversity and can be remarkably adaptable to change. Investment in national economies will also be crucial in coming years with the goal of driving better growth and resilience. Structural trends include the need for investment in digitalisation and automation, research and development, health care, upgraded infrastructure and industrial facilities, and improved energy efficiency and security. Portfolio companies are well placed to meet these needs. In early April, with the further market sell-off, the Evenlode Income portfolio has found itself trading on a historic free cash flow yield of more than 6% and a dividend yield of 3.3%. Its bedrock is composed of repeat-purchase holdings, that we continue to think are well placed to compound cash flow at a good rate over coming years.