Medium and smaller companies bounced strongly in February as investors sought bargains in stocks and sectors that had retreated in previous months. Oil stocks led the gain as the price of a barrel of oil reached record highs. Mining companies also advanced on the back of advancing commodity prices and bid activity. As widely anticipated, the Bank of England cut UK interest rates by 0.25% to 5.25%, prompted by falling house prices and weakening economic data.The Fund returned 6% during the month, compared to the sector average return of 2.86%. Positive stock selection accounted for this outperformance. Our overweight position in 888 Holdings continued to boost returns as online gaming firms proved to be cash generative as it benefited from upgrades, and investors looked through the possibility of monetary anti-gambling penalties by the US authorities.Homeserve, the home emergency repair firm, also continued to help performance after delivering another set of solid results. Engineering firm Rotork proved beneficial on the back of strong demand and record high oil prices as it makes components for the global oil field services industry. High oil prices caused a retreat in easyJet as investors factored in thWe took advantage of volatility to add to food equipment manufacturer Enodis, which continues to benefit from strong global demand. Likewise, we added a holding in selfstorage firm Big Yellow at an attractive valuation as we have a positive view of its longterm earnings potential. We added to specialist glass manufacturer Romag, which benefits from its position as world leader in bullet and blast-proof glass.The company also makes integrated solar cell panels and this sector of the business will generate substantive growth and earnings. We sold Bovis Homes during the month on a deteriorated outlook for UK home builders. The company is well run and well financed and when the current housing market correction shakes itself out, we may revisit the stock.
270.10p
