Cornelian Risk Managed Funds

The Asia ex Japan and Emerging Markets regions led the equity markets higher, in sterling terms, helped by President Trump’s claim that a trade deal between the US and China had been agreed. Whilst the oil price initially rose sharply on the news that the US was joining Israel to bomb Iran, it quickly settled down as it became apparent that Iran was either unwilling or unable to retaliate.

Specialist credit funds (such as Sequioa Economic Infrastructure Income) and longer dated gilts performed relatively strongly as economists had revised down their economic growth forecasts for the UK, but not by enough to impact forecast credit default rates. This meant that the higher yield pick-up generated by owning specialist credit funds remains attractive. 

Despite continued US dollar weakness versus sterling, international equities continued to perform well, in sterling terms. Leading the pack were the L&G Global Technology Index Trust and the Artemis US Select Fund, both of which have significant exposure to very large growth companies. 

The Fund’s direct UK equity portfolio outperformed the index. Vesuvius and Prudential performed strongly. The share price of Vesuvius, the global leading producer of mission critical consumables for the steel industry, had suffered on the news of the proposed ‘Liberation Day’ tariffs. Since then, the share price has recovered all its lost ground as the firm announced that it expected the direct impact of tariffs to be neutral to the firm. Prudential offers long term savings and insurance products to customers in Asian and African markets and so was buoyed by improving sentiment to these economies. 

During the month, the Blackrock Emerging Markets Fund was sold due to a change of manager.