Manager Commentary

Please read in conjunction with the Performance section above.

31 May 2020Gervais Williams & Martin Turner

With many people working from home, companies providing online services have often not just sustained sales but actively benefited from the pandemic. Since there are many more of these online stocks listed on the AIM Exchange, the FTSE AIM All-Share Index rose by 8.12% during May. The NAV of the Trust rose 12.19%.

The share price of Avacta rose substantially during the month, although it wasn’t the trust’s best performer. Galantas Gold Corporation rose more, and Open Orphan was also almost as strong. The share price of BATM also stepped up further on news of a new COVID test, and since its share price may have risen too far it has been sold.

Overall, the trust’s return over the year to date has been driven by number of contributors. The rise in the share price of Avacta has been significant, although the FTSE 100 Put option was almost as relevant, and there have been numerous other holdings like Oncimune, BATM, Open Orphan, Caledonia Mining and Venture Life for example, that have all appreciated by 100% or more over the year to date. In addition, the trust has made some recent investments during 2020 in FRP Advisory, and Xaar that have also enhanced return.

Despite the trust’s strong returns over recent months, we continue to believe there are still numerous holdings that could justify higher share prices. Therefore, in our view that the trust still has scope to continue to add value going forward.