April Report

Market Commentary

Global equity markets were mixed in April, shaped by sharp volatility early in the month following the  announcement of sweeping US trade tariffs. The proposed measures included a 10% baseline tariff on all imported goods, alongside potential reciprocal tariffs targeting specific countries. The US market reacted swiftly, falling nearly 12% at its lowest point, as investors assessed the implications for global supply chains and inflation.

Sentiment improved later in the month after the administration postponed most of the reciprocal tariffs for 90 days, with the exception of those directed at China. This partial reversal helped stabilise global markets, with most major regions finishing higher. Japan advanced more than 5%, supported by improved investor confidence. Mexico posted strong gains as certain exports were granted exemptions under the US-Mexico-Canada Agreement. Emerging Markets rose modestly, though gains were tempered by weakness in Chinese equities after the announcement of a 145% tariff on imports from China.

At a sector level, defensive areas of the market outperformed. Consumer Staples and Utilities saw renewed interest amid heightened uncertainty, while Energy declined sharply, reflecting global growth concerns and weaker oil prices.

Portfolio Commentary

The Fund returned -0.97% in April, holding up better than broader equity markets despite a challenging backdrop for global markets. Gains in select Healthcare and Communication Services holdings helped offset weakness elsewhere, while the portfolio’s limited exposure to highly tariff-sensitive names was beneficial.

Chugai Pharmaceutical was a notable contributor. Shares in the Japan-based biopharmaceutical firm rose after its partner Eli Lilly announced encouraging Phase 3 results for Orforglipron, an oral GLP-1 treatment for diabetes and weight management. The drug’s strong efficacy and tolerability profile significantly enhanced its commercial potential, lifting sentiment around Chugai’s role in the growing GLP-1 space.

Netflix contributed positively. The US-based streaming company delivered better-than-expected first-quarter results and reported steady subscriber growth despite a more uncertain macro environment. The Fund also benefited from not holding Apple, which declined due to renewed concerns around its exposure to Chinese manufacturing following the announcement of increased US import tariffs.

On the downside, UnitedHealth Group detracted from performance. The health insurer reported a higher-than-anticipated medical loss ratio, which raised short-term profitability concerns. Thermo Fisher Scientific also underperformed as investors reassessed near-term growth expectations given reduced biotech sector funding.

The Fund initiated a new position in Johnson & Johnson during the month. The US-based healthcare leader has a long history of successfully identifying early-stage blockbuster drugs and benefits from strong positions across both pharmaceuticals and medical devices. The company’s scale and disciplined approach to R&D and acquisitions support a durable growth profile. The investment team viewed the recent share price as an attractive entry point for a high-quality, diversified healthcare business.

The Fund remains focused on building a portfolio of high-quality companies with resilient earnings profiles and sustainable growth drivers. The current environment continues to highlight the importance of a research-driven approach that emphasises business quality, industry structure, and sustainable profitability.