April Report

Market Commentary

Global share markets were volatile in April, with investor sentiment rattled early in the month by the announcement of sweeping new US tariffs. The proposed measures included a 10% baseline tariff on all imported goods, as well as potential reciprocal tariffs targeting specific countries. Markets sold off sharply as investors weighed the implications for trade, inflation, and global growth.

However, the tone improved as the month progressed. The US administration later announced a 90-day pause on most of the reciprocal tariffs, with China as the key exception. This helped restore confidence and sparked a broad market rebound. The US market recovered most of its earlier losses, while many other regions, including Japan and Mexico, delivered positive returns for the month.

Defensive sectors such as Consumer Staples and Utilities were among the stronger performers, as investors sought more stable parts of the market amid ongoing uncertainty. In contrast, Energy declined sharply as global growth concerns weighed on oil prices.

While the outlook remains mixed, markets responded favourably to signs of policy flexibility and continued resilience in corporate earnings across several regions.

Portfolio Commentary

The Portfolio declined in April, though it held up better than global markets during what was a volatile month for equities. While markets initially declined following the announcement of sweeping US tariffs, most regions recovered, and the Portfolio benefited from select exposures in Healthcare and Communication Services. Importantly, many holdings were not directly exposed to the types of global supply chains most affected by the proposed trade measures.

Japan’s Chugai Pharmaceutical was a key contributor. Its share price rose following positive clinical trial results for Orforglipron, an oral diabetes and weight loss drug being developed in partnership with Eli Lilly. The results exceeded expectations and improved the drug’s outlook in what is expected to be a major treatment category.

Netflix also contributed positively. The US-based streaming platform delivered solid quarterly results and noted that subscriber growth remained steady despite broader macroeconomic uncertainty. The Portfolio also benefited from not holding Apple, which came under pressure due to renewed concerns around its exposure to Chinese manufacturing and potential tariff impacts.

On the downside, UnitedHealth Group detracted. The company reported a higher-than-expected medical loss ratio, which weighed on short-term earnings expectations. Thermo Fisher Scientific also underperformed, with investors reassessing near-term growth prospects in light of reduced funding across the biotech industry.

During the month, the Portfolio established a new investment in Johnson & Johnson. The US-based healthcare leader holds strong positions in pharmaceuticals and medical devices and has a long track record of identifying early-stage innovations and scaling them effectively. Its consistent approach to research and acquisitions, along with strong cash flow generation, supports long-term growth. Shares were purchased at what the investment team viewed as an attractive valuation.

The Portfolio continues to focus on well-managed companies with durable earnings and sound long-term fundamentals. A diversified global approach, combined with disciplined research, remains central to navigating periods of volatility and protecting investor capital over time.