IFSL RC Brown UK Primary Opportunities | Fund Update | May 2026
May: Mid & small cap strength on hopes of a Middle East peace deal
It was the turn of the UK mid and small caps to outperform as the Middle East ceasefire continued and hopes of a peace agreement and a re-opening of the Strait of Hormuz rose as the month wore on. Oil had its largest monthly drop since March 2020, trading below $100. UK inflation also fell to 2.8%, lower than expected. However, 10-year gilt yields rose to over 5% and hit levels not seen since the financial crisis in 2008. The energy shock is particularly acute in the UK and Europe with our greater reliance on importing oil and gas, albeit very little comes directly from the Middle East. With inflation expected to remain significantly ahead of the Bank of England 2% target, some economists forecast a rate hike later in the year. This is not our base case as whilst energy prices are likely to remain elevated from the levels they began the year at, we anticipate a peace deal will be thrashed out which should result in further energy price falls.
Meanwhile, the US market reached record highs, led by the further AI/chip conductor excitement and the anticipated IPO of Elon Musk’s Space X, which is expected to be the largest IPO in history. In the UK, it was a quiet month for equity fund raisings and whilst we would normally expect a pre summer rush of raises, this year, given global tensions, we anticipate a delayed pick up towards the end of Q3 and into Q4.
IQE was added to the portfolio as part of an equity fund raise whilst we took advantage of market volatility to add to the holdings in NatWest and Lloyds
In May the IFSL RC Brown UK Primary Opportunities fund returned 2.2% compared with 1.2% for the FTSE All Share and 2.5% for the IA UK All Companies sector, all on a total return basis.
Purchases
IQE is a UK based manufacturer of semiconductor wafers. The company is experiencing unprecedented growth due to the demand from AI led data centres. We acquired the shares at a substantial discount to the share price as part of an £80m equity fund raise which provides the company with a strong balance sheet to meet future demand. It also received a major new investment from US semiconductor company MACOM which it has signed long term supplier agreements with. The shares are currently trading at more than double the placing price.
Sales
We sold the holding in Dunelm which has been a disappointing performer against a tough consumer backdrop. We also exited the holding in technology supplier Bytes as it recovered from its recent profit warning. We took some profits in British American Tobacco, Hollywood Bowl, MHA and BT on strength.
Cumulative Performance (Total Return %) – To 31 May 2026
| Fund/Benchmark Name | 3M | 6M | 1Y | 3Y | 5Y | 10Y | Since Inception (28/05/1997) |
| IFSL RC Brown UK Primary Opportunities P Acc | -1.0 | 8.1 | 17.7 | 41.5 | 23.9 | 103.9 | 649.6 |
| Quartile Ranking IA UK All Companies | 1 | 2 | 2 | 2 | 3 | 2 | 2 |
| IA UK All Companies | -1.9 | 6.1 | 13.6 | 36.7 | 33.1 | 91.9 | 446.7 |
| FTSE All Share | 13.0 | 8.8 | 21.6 | 53.6 | 67.0 | 134.6 | 567.5 |
Source: FE: 31/05/2026
Discrete Annual Performance (Total Return%) – To 30 April 2026
| Fund/Benchmark Name | Year to 31/03/2026 | Year to 31/03/2025 | Year to 31/03/2024 | Year to 31/03/2023 | Year to 31/03/2022 |
| IFSL RC Brown UK Primary Opportunities P Acc | 17.7 | 9.2 | 10.1 | -7.9 | -5.0 |
| Quartile Ranking IA UK All Companies | 2 | 2 | 4 | 4 | 3 |
| IA UK All Companies | 13.6 | 6.0 | 13.6 | -1.1 | -1.5 |
| FTSE All Share | 21.6 | 9.4 | 15.4 | 0.4 | 8.3 |
Source: FE: 31/05/2026
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.
