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 underperformed in August. Adobe and Intertek were two holdings that performed well in the month. Adobe, the global leader in digital creative tools benefitted in the month from the shift to digital tools being accelerated by the pandemic. Intertek, which offers certification, testing and inspection, reported results in August. It seems as though supply chains are becoming more complex due to various factors, such as trade wars and sustainability, meaning that the long term prospects and opportunity for the company are greater. 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 added to positions in Unilever and Thermo Fisher. Unilever too, whilst already being a leader in sustainability, has been recently announcing new and impressive initiatives around this. Thermo Fisher, which provides broad products and services to the life sciences industry saw some share price weakness in the month, after a competitor launched a new COVID-19 test. The trust took advantage of this, believing that the outlook for the company is as strong as ever.

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.