May was a difficult month for equity markets to make any headway. Within the UK it was large caps which continued to lead the market, with continued high commodity and energy costs being a positive for oil majors and miners. These sectors carry material weightings in the index. UK mid and small cap stock performance was weaker, posting negative returns on aggregate. Concerns of weakness in the UK economy, to which small stocks are more exposed to, was detrimental to performance. The Hang Seng was one of the stronger performing indices as Chinese stocks recovered from their recent lows, with lockdown fears receding. The S&P 500 ended flat with Europe marginally in negative territory.

The UK fixed income asset class continued to struggle through May. UK gilts were the weakest performers as inflationary pressures continued to build, with forecasts of where it may peak continuing to rise. Interest rates expectations continued to rise accordingly, with the Bank of England, along with other central banks in major developed economies, expected to be on a hiking cycle until they deem inflation to be under control. Investment grade corporates were also negative returning, although not to the same extent, with their higher coupons affording them some protection. It was the same for non-investment grade, with a lower duration here also helping.

The Fund posted a return of -0.50% for May, outperforming the sector average return of -0.93%.

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.