IFSL RC Brown UK Primary Opportunities | Fund Update | October 2024
October: UK equities trade lower in October
On the 30th October, a Labour government delivered its first budget in fourteen years. Tax rises had largely been signposted so there was no major market reaction to the higher taxes announced – the largest being an increase in employer national insurance which the Office of Budget Responsibility (OBR) anticipates will be modestly inflationary. As a result, bond yield moved modestly higher post the budget on the expectation that interest rates will be more muted. The Bank of England’s interest rate meetings in November and December will be particularly closely watched, especially as inflation fell to 1.7% in September, its lowest level in three years and below consensus expectations.
Empiric Student Property was added to the portfolio as part of an equity fund raising. We also added to the holding in Elixirr following a secondary sell down by management.
In October, the IFSL RC Brown UK Primary Opportunities fund returned -2.5% compared with -1.6% for the FTSE All Share and -2.1% for the IA UK All Companies sector, all on a total return basis.
Purchases
Empiric Student Property is a UK REIT (real estate investment company), focused on the prime regional university locations outside of London. Its student customer base is typically from overseas and/or postgraduates. We acquired the shares at a discount to the share price and net asset value as part of a £56m equity raise to fund its investment pipeline. The company is a constituent of the FTSE 250.
Sales
The holding in Fonix Mobile was sold for profit, whilst the holdings in Integrafin and Dunelm were trimmed on strength. The banking sector enjoyed a particularly strong performance as results were well received by the market. Consequently we took the opportunity to trim our holding in Lloyds Bank.
Cumulative Performance (Total Return %) – To 31 October 2024
| Fund/Benchmark Name | 3M | 6M | 1Y | 3Y | 5Y | 10Y | Since Inception (28/05/1997) |
| IFSL RC Brown UK Primary Opportunities P Acc | -2.8 | 2.1 | 14.9 | -6.4 | 16.7 | 78.1 | 485.3 |
| Quartile Ranking IA UK All Companies | 2 | 2 | 3 | 4 | 3 | 2 | 2 |
| IA UK All Companies | -3.3 | 2.2 | 17.8 | 6.4 | 23.7 | 69.6 | 349.4 |
| FTSE All Share | -2.5 | 1.8 | 16.3 | 19.7 | 31.9 | 81.9 | 398.9 |
Source: FE: 31/10/2024
Discrete Annual Performance (Total Return%) – To 31 October 2024
| Fund/Benchmark Name | Year to 31/10/2024 | Year to 31/10/2023 | Year to 31/10/2022 | Year to 31/10/2021 | Year to 31/10/2020 |
| IFSL RC Brown UK Primary Opportunities P Acc | 14.9 | 0.8 | -19.1 | 45.2 | -14.2 |
| Quartile Ranking IA UK All Companies | 3 | 4 | 3 | 1 | 2 |
| IA UK All Companies | 17.8 | 3.8 | -12.9 | 37.2 | -15.3 |
| FTSE All Share | 16.3 | 5.9 | -2.8 | 35.4 | -18.6 |
Source: FE: 31/10/2024
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.
