Major equity markets were predominantly negative during the month. With inflation moving higher, the potential for an economic slowdown, even recession was increasing, with consumers having to adjust to a higher cost of living. An economic slowdown is rarely a positive for corporate earnings, particularly for those companies who find themselves unable to pass on the higher input costs which they themselves are suffering from. With interest rates and bond yields on the rise, it was little surprise to see the US at the bottom of the league, given the tech heavy constitution of their index. The Hang Seng index also struggled, with Shanghai in lockdown and economic growth slowing as a consequence. The UK, meanwhile, in particular large caps, were stronger performers, thanks to the heavy weighting to oil, energy, materials and miners, all of whom benefitted from higher commodity prices.

UK fixed income struggled as an asset class during April. Higher inflationary pressures continued to pressure central banks into raising rates and with inflation showing no signs of abating, further hikes, particularly in the US, are firmly on the cards. Gilts saw their yields rise, therefore posting negative returns due to loss of capital, but it was investment grade bonds which performed the worst as credit spreads also widened. High yield, non-investment grade bonds, which had previously provided some protection in previous months due to their lower sensitivity to duration, were also on the slide as spreads widened here also.

In summary, there were few places to hide in what was a difficult month for markets to navigate. The Fund posted a return of -2.36% for April, marginally underperforming the sector average return of -1.97%.

This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.

The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.

The Fund is suitable for investors who are seeking to achieve long term capital growth.

The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.

Past performance is not a guide to future performance.