Market Round-up
Escalating conflict in the Middle East dominated March's market newsflow, adding a further layer of macroeconomic uncertainty. Key energy routes have been disrupted, pushing oil prices higher and prompting a reassessment of the global outlook. The seismic energy shock is likely to contribute to firmer inflation and pose a fresh challenge for central banks.
Against this backdrop, markets have shown bouts of risk aversion, with capital rotating selectively. Stock market history tells us that it's important to 'look-through’ short-term energy imbalances, and as always, we focus on the strength of our underlying portfolios: businesses with strong balance sheets, robust cash generation, and pricing power.
So far, the 2026 reporting cycle has shown that the market continues to overlook our portfolios’ operational momentum. Broadly, the recent negative share price performance of our investee companies has been driven by declining earnings multiples versus the index rather than inferior earnings growth. We are now seeing, in many cases, that the incremental buyer of these companies is increasingly the companies themselves, as excessive cashflow generation funds ever larger share buybacks. At current levels, these are instantly highly accretive and bode well for the medium to longer-term outlook.
Investment Views
This month, Hugh and Chris M, portfolio managers of the Evenlode Income fund, argue why quality investing isn’t yet dead, outlining how portfolio companies are back to valuation levels from the 2009-11 period in absolute terms. They further analyse HALO companies and explain why investment in national economies will be crucial in the coming years.
Meanwhile, Ben P and Rob Hannaford of the Evenlode Global Income fund, reflect on the outbreak of war in the Middle East and its knock-on effects on the European market. They touch on why analysing disruptive risks is a central focus of the investment process and why they remain confident in their portfolio companies.
Important information
Issued by Evenlode Investment Management Limited (Evenlode). Evenlode is authorised and regulated by the Financial Conduct Authority, No. 767844.
Whilst the funds Evenlode acts as investment manager for are available to retail investors via third party providers, please note that Evenlode do not have permissions from the FCA to deal directly with retail clients and the information provided in this newsletter and on the Evenlode website is for information purposes only. If you are not an investment professional you may still wish to visit the Evenlode website to find out information about Evenlode and the funds we manage but we recommend that if you wish to obtain advice regarding the suitability of the Evenlode ICAV for you, you should contact a financial adviser. Applications to invest in any fund referred to on the Evenlode website can only be made through a third party and must only be made on the basis of the offering documents relating to the specific investment.
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Please note, any views represent the opinions of the Evenlode Team as at the time of writing and do not constitute investment advice. Where opinions are expressed they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This newsletter is not intended as a recommendation to invest in any particular asset class, security or strategy. The information provided is for illustrative purposes only and should not be relied upon as a recommendation to buy or sell securities. Current forecasts provided for transparency purposes, are subject to change and are not guaranteed. Every effort is taken to ensure the accuracy of the data used in this document but no warranties are given.
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The Evenlode ICAV sub-funds are subject to normal stock market fluctuations and other risks inherent in such investments. The value of your investment and the income derived from it can go down as well as up, and you may not get back the money you invested, you should therefore regard your investment as long term. As focused portfolios of between 30 and 50 investments, the Evenlode ICAV sub-funds carry more risk than funds spread over a larger number of stocks. The Evenlode ICAV sub-funds have the ability to invest in derivatives for the purposes of EPM, which may restrict gains in a rising market. Investments in overseas equities may be affected by changes in exchange rates, which could cause the value of your investment to increase or diminish..