IFSL RC Brown UK Primary Opportunities | Fund Update | March 2024
March: UK market strength (finally) though small caps remain subdued
The UK market, notably the FTSE 100 (+4.9%) enjoyed a strong month, as it hit an eleven-month high as interest rates remained unchanged for a fifth consecutive month and expectations of a summer rate cut increased.
After what has been a tumultuous few years with the global economy having to contend with the shocks of a Covid pandemic and the explosion of inflation following Russia’s invasion of Ukraine, we may be seeing a return to more ‘normal times’. With UK inflation continuing to fall, we anticipate a lower interest rate environment being positive for equities and particularly modestly valued markets such as the UK. Unemployment also remains low by historical standards and the tight labour market is resulting in average pay increases above the current inflation level which we anticipate benefitting a consumer recovery.
The US market again hit new highs on the Federal Reserve’s announcement that it anticipates 2-3 rate cuts this year.
M&A activity, which has been a feature of the UK market for some time, intensified, with a notable number of companies receiving bid interest. These included DS Smith, Spirent, Mattioli Woods and Nationwide’s bid for Virgin Money,
We modestly increased the holding in London Stock Exchange following a further sell down by Thomson-Reuters.
In March, the IFSL RC Brown UK Primary Opportunities fund returned 3.4% compared with 4.8% for the FTSE All Share and 3.9% for the IA UK All Companies sector, all on a total return basis.
Sales
Underperformers JD Sports, XP Power and Midwich were sold. We also reduced the holding in Reckitt Benckiser following the recent adverse court ruling in the US relating to its baby formula.
Cumulative Performance (Total Return %) – To 31 March 2024
| Fund/Benchmark Name | 3M | 6M | 1Y | 3Y | 5Y | 10Y | Since Inception (28/05/1997) |
| IFSL RC Brown UK Primary Opportunities P Acc | 1.0 | 4.5 | 5.0 | -2.0 | 14.6 | 64.6 | 458.1 |
| Quartile Ranking IA UK All Companies | 4 | 4 | 3 | 4 | 4 | 2 | 2 |
| IA UK All Companies | 2.9 | 7.5 | 7.7 | 11.3 | 24.2 | 59.6 | 332.0 |
| FTSE All Share | 3.6 | 6.9 | 8.4 | 26.1 | 30.3 | 75.3 | 378.2 |
Source: FE: 31/03/2024
Discrete Annual Performance (Total Return %) – 31 March 2024
| Fund/Benchmark Name | Year to 31/03/2024 | Year to 31/03/2023 | Year to 31/03/2022 | Year to 31/03/2021 | Year to 31/03/2020 |
| IFSL RC Brown UK Primary Opportunities P Acc | 5.0 | -10.0 | 3.7 | 42.1 | -17.8 |
| Quartile Ranking IA UK All Companies | 3 | 4 | 3 | 2 | 2 |
| IA UK All Companies | 7.7 | -1.9 | 5.4 | 38.0 | -19.2 |
| FTSE All Share | 8.4 | 2.9 | 13.0 | 26.7 | -18.5 |
Source: FE: 31/03/2024
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.
