IFSL RC Brown UK Primary Opportunities | Fund Update | April 2025
April: Market Mayhem: Tariffs, Volatility, and Fund Resilience
It felt like we could have written a daily update in April, such was the amount of news flow, largely tariff related, and the extremely high levels of market volatility. The fact that the UK market only ended the month slightly lower (and the Fund higher), gives little insight into an extraordinary month of market volatility. At times it felt very uncomfortable for equity managers, with President Trump’s ‘Liberation day’ unleashing potential carnage on the global economy. Whilst still a fluid situation, President Trump has pressed the pause button with a 90 day hiatus on tariffs apart from China, which at the time of writing were as high as 145% on goods imported from China. Markets made up much of their substantial losses in the first week of the month as hopes grew that the US and China will, in time, come to a trade agreement. What is apparent to us, is that Trump’s erratic style has inflicted self-harm on the US economy, with growth forecasts being cut, and undermined the US’s safe haven reputation. With the past decade seeing capital flow into US equities, we do believe that asset allocators will now be looking to reduce exposure to the asset class, which remains highly valued. We anticipate Europe and the UK being beneficiaries of this rotation, where valuations are much more modest.
The European Central Bank (ECB) cut interest rates with the expectation that the UK & US will follow suit in coming months. Falling interest rates we believe will provide support to equity markets, particularly the UK which is a market with an attractive and growing dividend profile.
We have written regularly about the significant level of M&A in recent years on the UK market. Despite the market turmoil, further bids continued to emerge, and will continue to emerge given the modest valuations.
We participated in the IPO of MHA whilst adding to the recent purchase of Diploma. We used the sharp market falls to modestly add to some higher beta holdings such as BP, Natwest, AJ Bell and Integrafin, that we would expect to outperform in a market recovery.
In April, the IFSL RC Brown UK Primary Opportunities fund returned 0.9% compared with -0.3% for the FTSE All Share and 0.8% for the IA UK All Companies sector, all on a total return basis.
Purchases
MHA is a top fifteen accountancy firm providing audit, tax and business advice in the UK. It is the UK member firm of Baker Tilly International, a top ten global network of professional services providers. Despite the market turmoil, the company, given its reliable revenue stream, was able to get its IPO away. We view the valuation and dividend yield as attractive and anticipate a re-rating in time as the company proves itself as a listed entity.
Sales
We used the market sell off to reduce the holdings in shares that held up well in the turmoil, such as our exposure to utility companies Pennon, United Utilities and National Grid. At times such as these, having a well-diversified portfolio across different sectors proves valuable. Under performer Associated British Foods was sold, whilst the holdings in Unilever and BAE Systems were modestly reduced.
Cumulative Performance (Total Return %) – To 30 April 2025
| Fund/Benchmark Name | 3M | 6M | 1Y | 3Y | 5Y | 10Y | Since Inception (28/05/1997) |
| IFSL RC Brown UK Primary Opportunities P Acc | -0.8 | 4.4 | 6.6 | 6.0 | 39.2 | 69.6 | 511.0 |
| Quartile Ranking IA UK All Companies | 1 | 2 | 2 | 3 | 3 | 2 | 2 |
| IA UK All Companies | -3.0 | 1.9 | 4.1 | 13.3 | 47.5 | 56.8 | 357.8 |
| FTSE All Share | -1.2 | 5.6 | 7.5 | 22.6 | 67.9 | 75.9 | 426.9 |
Source: FE: 30/04/2025
Discrete Annual Performance (Total Return%) – To 30 April 2025
| Fund/Benchmark Name | Year to 30/04/2025 | Year to 30/04/2024 | Year to 30/04/2023 | Year to 30/04/2022 | Year to 30/04/2021 |
| IFSL RC Brown UK Primary Opportunities P Acc | 6.6 | 4.8 | -5.1 | -3.9 | 36.7 |
| Quartile Ranking IA UK All Companies | 2 | 3 | 4 | 3 | 1 |
| IA UK All Companies | 4.1 | 6.9 | 1.8 | -0.1 | 30.3 |
| FTSE All Share | 7.5 | 7.5 | 6.0 | 8.7 | 26.0 |
Source: FE: 30/04/2025
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.
