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

In the context of the UK’s very recent political history there is no denying it is quite a shift to be talking about clarity. But after the decisive majority delivered in the early July elections, and given the ongoing political polarisation in many other countries, it is not such a bold statement as it first appears. After having its political midlife crisis early and delivering Brexit as a byproduct, the UK has retreated to the safe refuge of the centre at precisely the same time others are splintering in all directions. France has had to pull out all the stops to suppress the far right, while Germany has a myriad of structural problems. In contrast, Latin America has gone completely the other way, embracing a noticeably hard left doctrine at the same time as Asia, which has the precarious and highly fluid Sino-US influences to navigate.  Even the US has a leadership crisis of its own, faced with an invidious choice between a freewheeling convicted felon or an incumbent demonstrating a precipitous decline in mental acuity. Set against all this, the UK really does look like a haven of tranquillity.

After a strong run, the fund modestly underperformed over the month. This was driven primarily by two stock-specific situations, which we believe have strong grounds to reverse and potentially quite powerfully. 

First among these was Rank, which was desperately unlucky to get caught up in the crossfire of the snap election timetable. Long-awaited sector reform was literally poised to enter the statute books and had full cross-party support, but sadly, it was among the business set aside  due to insufficient remaining parliamentary time. For a business that has seen six different culture ministers over recent years, all contributing to a rolling series of delays in getting here in the first place, and one that, in some cases, must operate against a rule book that dates to 1968, the excellent management team are certainly entitled to feel a bit aggrieved. However, the business is a clear market leader, with a reinvigorated strategy driving it back into growth across all major channels. Regardless of the reforms, it is a cheap share with unique strategic assets.

Puretech, meanwhile, saw a technical unwind post an oversubscribed tender for its shares at 250p. The shares presently reside at 180p, representing a thumping discount to where the transaction occurred and leaving the enterprise value at close to zero. For a business that has substantial net cash, a truly disruptive platform with proven efficacy in delivering well above industry average success rates in acute areas of unmet medical need, as well as a host of other trinkets,  such as potential royalty streams and listed asset stakes, this mispricing appears highly anomalous.
  
Newsflow elsewhere in the portfolio was again supportive. There was an encouraging trading update from Pulsar Group and a strong release from Severfield, a clear beneficiary of modern infrastructure spend, including data centres and electricity grid upgrades. Similarly encouraging were numbers from NCC, which also hosted a compelling capital markets day showcasing its enviable armoury of offerings to improve corporate resilience and defences in a world of ever-escalating threats. AI is only going to push that in one direction; whether we like it or not, companies need to be prepared, and NCC is increasingly becoming their partner of choice to do so. Funding Circle confirmed a successful, profitable disposal of its US operations, leaving a clean, focused, and still materially mispriced fintech platform with a strong net cash position. At the larger end, non-ownership of Glaxo, which had a renewed legal skirmish over Zantac and the meaningful overweight in BT, which continued to drift up after its significant free cashflow upgrade seen in the prior month's results, were both positive contributors. 
 

JOHCM/FTSE Group/Bloomberg/Lipper. Data shown net of fees, net income reinvested. Performance of other share classes may vary and is available on request. Please note that all fund performance is shown against the FTSE All-Share TR Index. 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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