Market Round-up
November brought renewed concerns over the durability of the rally in high-growth sectors. US technology stocks, which have been driving recent market momentum, experienced whipsaw volatility, as valuations edged into arguably more demanding territory. It was also a reminder of the importance of fundamentals – underlined by the performance of portfolio holding Alphabet which scaled new heights during the period.
The UK market, meanwhile, digested the Autumn Budget with characteristic scepticism. Rachel Reeves side stepped a Liz Truss moment, and there was relief as it emerged the Chancellor had doubled the fiscal headroom, but fears remain over UK long-term growth and ability to manage borrowing. Meanwhile, the FTSE 100 hit a record high outpacing other European markets.
Overall, we believe November provided yet more evidence on why an emphasis on capital-light, cash-generative businesses remains a steady anchor amid shifting narratives. We remained disciplined on valuation, adding selectively where long-term prospects remain underappreciated and avoiding the temptation to chase more speculative areas.
Investment Views
In 'Moats in a sale' Hugh and Chris Moore discuss how aggregate fundamentals in the Evenlode Income portfolio have progressed steadily this year, reinforcing the fund’s focus on high-quality, cash-generative companies offering strong long-term value.
On the global side, in ‘Q3 results & AI update’, Chris Elliott examines the sharp market swings and concerns that AI could disrupt established business models. However, Q3 results showed Evenlode Global Equity's holdings delivering strong, above-market revenue, earnings, and cash-flow growth, reinforcing confidence in the portfolio’s long-term strength.
As always, we continue to find comfort in the strength and resilience of portfolio companies, whose cash generation and long-term growth prospects remain robust.
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.
This newsletter is neither directed to, nor intended for distribution or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. The sale of shares of the fund may be restricted in certain jurisdictions. In particular shares may not be offered or sold, directly or indirectly in the United States or to U.S. Persons, as is more fully described in the Funds Prospectus.
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.
For full information on the Evenlode ICAV, including fund risks and costs and charges, please refer to the Key Information Documents, Annual & Interim Reports and the Prospectus, which are available on the Evenlode website. Recent performance information is shown on factsheets, also available on the website. Past performance is not a guide to future returns. Fund performance figures are shown inclusive of reinvested income and net of the ongoing charges and portfolio transaction costs unless otherwise stated. The figures do not reflect any entry charge paid by individual investors.
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.