The Fund aims to achieve long-term capital growth by investing in UK listed companies across the broad market cap range.

July brought further market extremes, now so commonplace in a Covid-19 convalescing world. On this occasion, second wave newsflow and a clear ratcheting up of geopolitical tensions dominated over pretty broad-based evidence of faster-than-expected economic recovery. The result was a further dislocation in yields to all-time lows and a soaring rally in gold to all-time highs. With the yield compression happening despite significantly higher-than-anticipated government borrowing and irrespective of rising inflationary expectations, one can perhaps understand why investors might seek sanctuary in the yellow metal along with attendant dollar weakness.

Such macro observations are not our habitual domain, but they are relevant here as the knock-on effect on the stock market has been persistent and powerful. The interquartile valuation dispersion, between the cheapest stocks and the most expensive, is at eye-watering extremes. Bond proxy stocks march up regardless of the underlying entities’ actual financial performance or outlook while future growth champions, i.e. those with a compelling narrative and a DCF underpin that stretches long into the future, enjoy a similarly strong tailwind. The contrast with those on the other side of the fence could not be starker; trough multiples on trough profits abound, while in the morass an eclectic mix of very exciting undiscovered, mispriced growth assets resides, often, ironically, exposed to the very same structural themes investors are tripping over themselves to pay heady multiples elsewhere. So a world of elevated risk but also fantastic opportunity. It should be a stock-pickers dream. At any abatement of the extra-ordinary headwinds, it will be.

Although the Fund underperformed over the month, given the backdrop this was both containable and understandable. Fundamental newsflow continues to be strong, with significantly more positive announcements than negative. Those that did hurt, such as Rolls Royce or ITV, were largely a product of suppressed perceptions of their end market exposures rather than their actual operating performance while others, such as Gresham Technologies, ran into some profit taking. The rest was predominantly continued drag from the staples complex and some weakness in financials, all for the reasons elucidated above.

GoCo results, which arrived on the last day of the month, again showed superb progress with Autosave, a truly disruptive proposition and core to our investment thesis. Science in Sport’s trading update meanwhile, was robust and above expectations but in a world distracted by events elsewhere the shares were resolutely unchanged; it should only be a matter of time before that changes. Avacta continues to advance its Covid-19 solutions and Smartspace launched a similarly timely Covid-19 software module along with a very important new distribution agreement. Real estate optimization and productivity, its core competency, has never been more relevant in our opinion and although it had a nice rally, the valuation still languishes in comedic territory.

Lastly, and encouragingly, we note a significant pick in corporate activity globally, with a few bids even making it onto the pariah shores of the UK. This is happening earlier and more meaningfully than we expected and bodes very well for a whole host of consolidation candidates prevalent in the portfolio.

Data shown net of fees, net income reinvested. Please note that all fund performance is shown against the FTSE All-Share TR 12pm adjusted. Performance of other share classes may vary and is available on request.Where shown, monthly returns table shows compounded discrete monthly performance. All performance figures illustrate performance from the first full day that the Fund held investments. During the period 6 November 2001 to 7 May 2003 the performance record is based on the pre-existing share class that had a higher management fee.

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Past performance is no guarantee of future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. The Funds investment include shares in small-cap companies and these tend to be traded less frequently and in lower volumes than larger companies making them potentially less liquid and more volatile.