For global equity markets, August proved to be a positive month as share prices continued to recover from the significant falls experienced in the first quarter of this year when coronavirus was identified and economies locked down. Leading the way has been the US, where the S&P 500 rose by 7% and is now up year-to-date. In contrast, the UK, despite a 2.4% rise in the FTSE All-Share Index, still remains down double digits and has been held back by the composition of the index, with notably large weightings of sectors such as banks and oils which have uncertain outlooks. In the UK, the best performing sector was technology, reflecting a global trend, and the worst utilities reflecting weakness in fixed income markets. The trust outperformed in August. The best performance came notably from Salesforce.com, the global leader in CRM software which reported result ahead of expectations. Salesforce’s results demonstrated the importance of its products as many business and industries have accelerated their digital roadmaps in the wake of COVID-19. Its products offer a low carbon way for businesses to build better customer relationships. Adobe, the global leader in digital creative tools also benefitted for similar reasons. Philips, a leading provider of diagnostic imaging, patient monitoring and health informatics technology was the key detractor. The shares declined after the US Department of Health announced it would be reducing the number of ventilators it had previously agreed to procure from Philips due to lower than previously expected demand from US hospitals. While it is a positive that US hospitals are coping better than originally feared, the lower order size will negatively impact Philips’ growth for the year. During the month, we started a new position in Wabtec, a leading rolling stock component and equipment manufacturer with a focus on energy efficient locomotives and safety equipment and exited our position in Xylem in favour of more attractive opportunities elsewhere.

This is not a recommendation or solicitation to buy or sell any particular security. The views and opinions expressed herein are those of the manager at the time and are subject to change without notice.