The conflict in the Middle East during June led to in-month volatility. Stock markets managed, though, to post positive returns for the overall month, in a continuation of the recovery from early-April’s ‘Liberation Day’ lows. As well as relief following the Israeli-Iranian ceasefire, sentiment was supported by relatively benign US inflation data. Also helpful was news that a trade agreement between the US and China has been signed, and the sense that tariff negotiations with the US and other major trading partners were making progress.
Evenlode Income rose +0.9% in the month compared to a rise of +0.5% for the FTSE All-Share and +1.3% for the IA UK All Companies sector. The strongest contributors to performance were Spectris, Halma, Burberry and Smiths Group. Spectris increased +92% in June following a takeover approach from Advent and subsequent announcement that KKR, also a US private equity firm, was considering a competing bid for the company. Halma released strong full year results and guided to growth in the year ahead. Burberry and Smiths Group shares continued to perform well after positive trading updates in May. The most negative contributors to performance were Diageo, Unilever and LSEG. Diageo’s US peer Brown-Forman reported weak numbers in its most recent quarter, reflecting subdued category trends but also idiosyncratic factors, including a significant restructuring programme and realignment of its US distribution system. Unilever and LSEG decreased on no specific news.
In terms of portfolio changes, we have built a small position in Clarkson over the last few weeks. Clarkson is the global leader in ship broking playing a vital intermediary role in facilitating the global movement of key commodities, such as crude oil and iron ore. Held in Evenlode Global Equity since 2023, concerns around US trade policy caused share price weakness in recent months, providing an attractive entry point, with a dividend yield and free cash yield of over 3% and 6%, respectively. We continue to research an interesting watchlist of other potential new holdings.
As highlighted by the Spectris approach, we see considerable appeal in a diverse range of quality, UK-listed companies. Many have been out of fashion over the last couple of years, as investors have focused on other areas, but we think the opportunity for the patient investor remains compelling. The fund is composed of companies that offer durable business models, good growth potential and highly cash generative economics (the portfolio’s free cash flow yield remains above 5%).
The conflict in the Middle East during June led to in-month volatility. Stock markets managed, though, to post positive returns for the overall month, in a continuation of the recovery from early-April’s ‘Liberation Day’ lows. As well as relief following the Israeli-Iranian ceasefire, sentiment was supported by relatively benign US inflation data. Also helpful was news that a trade agreement between the US and China has been signed, and the sense that tariff negotiations with the US and other major trading partners were making progress.
Evenlode Income rose +0.9% in the month compared to a rise of +0.5% for the FTSE All-Share and +1.3% for the IA UK All Companies sector. The strongest contributors to performance were Spectris, Halma, Burberry and Smiths Group. Spectris increased +92% in June following a takeover approach from Advent and subsequent announcement that KKR, also a US private equity firm, was considering a competing bid for the company. Halma released strong full year results and guided to growth in the year ahead. Burberry and Smiths Group shares continued to perform well after positive trading updates in May. The most negative contributors to performance were Diageo, Unilever and LSEG. Diageo’s US peer Brown-Forman reported weak numbers in its most recent quarter, reflecting subdued category trends but also idiosyncratic factors, including a significant restructuring programme and realignment of its US distribution system. Unilever and LSEG decreased on no specific news.
In terms of portfolio changes, we have built a small position in Clarkson over the last few weeks. Clarkson is the global leader in ship broking playing a vital intermediary role in facilitating the global movement of key commodities, such as crude oil and iron ore. Held in Evenlode Global Equity since 2023, concerns around US trade policy caused share price weakness in recent months, providing an attractive entry point, with a dividend yield and free cash yield of over 3% and 6%, respectively. We continue to research an interesting watchlist of other potential new holdings.
As highlighted by the Spectris approach, we see considerable appeal in a diverse range of quality, UK-listed companies. Many have been out of fashion over the last couple of years, as investors have focused on other areas, but we think the opportunity for the patient investor remains compelling. The fund is composed of companies that offer durable business models, good growth potential and highly cash generative economics (the portfolio’s free cash flow yield remains above 5%).