IFSL RC Brown UK Primary Opportunities | Fund Update | July 2024
July: Buoyant UK market
UK equities enjoyed a strong month, particularly compared to the US, which was dragged down by a rotation out of the large cap technology stocks, that had spurred the US market to all time highs.
It was a month dominated by politics. The UK elected a Labour government with a substantial majority. We view the election of a moderate, stable government as a positive and welcome plans for a clear industrial strategy. With the UK continuing to trade at a substantial discount to other major markets, an increase in interest from overseas investors is expected. The US saw an assassination on Donald Trump’s life and the withdrawal of President Biden from the election in November. Meanwhile, France, in a close final round, saw the left wing and central parties finish ahead of Marine Le Pen’s far right party.
Property companies Unite and Sirius Real Estate both raised money for expansion and were added to the portfolio.
In July, the IFSL RC Brown UK Primary Opportunities fund returned 3.7% compared with 3.1% for the FTSE All Share and 3.6% for the IA UK All Companies sector, all on a total return basis.
Purchases
Unite is a student accommodation developer and operator. We acquired the shares at a discount to NAV as part of a £450m equity raise in order to fund the purchase of a number of sites from its development arm and to commit to new developments. Unite is a FTSE 100 constituent.
Sirius Real Estate is a property company with assets such as business parks and offices in Germany and the UK. We acquired the shares at a discount as part of a £150m equity raise to fund further acquisitions in the UK and Germany. Sirius is a constituent of the FTSE 250 and offers an attractive dividend yield of 5.5%.
Sales
We trimmed the holding in Londonmetric on strength and modestly pared back our overweight position in property following a number of additions to our property exposure this year. We also used market strength to reduce our holdings and take profits in Anglo American, M&G, JTC, Haleon, and Mitie. UK banks have re-rated materially this year and whilst we remain constructive on the sector, we modestly reduced the holdings in Lloyds and Natwest on strength.
Cumulative Performance (Total Return %) – To 31 July 2024
| Fund/Benchmark Name | 3M | 6M | 1Y | 3Y | 5Y | 10Y | Since Inception (28/05/1997) |
| IFSL RC Brown UK Primary Opportunities P Acc | 5.0 | 10.3 | 12.4 | -0.3 | 17.3 | 78.8 | 501.9 |
| Quartile Ranking IA UK All Companies | 3 | 3 | 3 | 3 | 4 | 2 | 2 |
| IA UK All Companies | 5.5 | 11.5 | 13.6 | 11.8 | 26.5 | 73.1 | 364.5 |
| FTSE All Share | 4.4 | 12.3 | 13.5 | 27.1 | 32.4 | 83.9 | 411.5 |
Source: FE: 31/07/2024
Discrete Annual Performance (Total Return%) – To 31 July 2024
| Fund/Benchmark Name | Year to 31/07/2024 | Year to 31/07/2023 | Year to 31/07/2022 | Year to 31/07/2021 | Year to 31/07/2020 |
| IFSL RC Brown UK Primary Opportunities P Acc | 12.4 | -1.2 | -10.2 | 34.5 | -12.5 |
| Quartile Ranking IA UK All Companies | 3 | 4 | 3 | 2 | 2 |
| IA UK All Companies | 13.6 | 3.0 | -4.5 | 32.3 | -14.5 |
| FTSE All Share | 13.5 | 6.1 | 5.5 | 26.6 | -17.8 |
Source: FE: 31/07/2024
Please be advised that the past is not necessarily a guide to future performance. Investments and the income derived from them can fall as well as rise and the investor may not get back the amount originally invested.
