Manager Commentary

Please read in conjunction with the Performance section above.

30 September 2020Nick Greenwood

The beginning of the quarter saw large tech stocks in the US running hard, but they pulled back significantly during September. During the month, we started to see some broadening of the markets. In particular, the smaller end of the UK and US market outperformed the larger companies.

Our best performer was Atlantis Japan Growth Fund, which specializes in the smaller end of the Japanese market. After a quiet July and August, the trust performed extremely well during September and the return was helped by some moderate narrowing of the discount.

Artemis Alpha Trust was among our poorest performers. The trust owns lots of cyclical UK companies such as EasyJet which have struggled as countries restrict travel and enact more lockdown restrictions to prevent a second wave.

A coronavirus second wave has been threatening most countries and keeping markets subdued as we brace ourselves for continuing and potentially increasing restrictions. In the UK, Prime Minister Boris Johnson warned that measures would need to stay in place for the next 6 months or so.

The US election result, which will be announced in November, is likely to cause some volatility in markets. One of the main concerns is that Trump will not accept the election result throwing the US into a constitutional crisis. Furthermore, the UK will need to navigate its exit from the European Union. However, both these concerns are well known and so any weakness would represent an opportunity.