The Fund drifted marginally lower during August and failed to participate in the modest end of month rally, demonstrating the lack of buyers in the mid cap investment trust sector combined with modest selling. The rise in the underlying NAVs in many of our investee companies has not been reflected in the share price returns which have been a notable headwind for a period of time.One of the most noteworthy events of the month was the performance of Sterling, which declined by 9% against the dollar, enhancing the performance of Polar Capital Technology, the largest position in the portfolio, which has 70% exposure to the dollar. Other significant positions such as The Biotech Growth Trust also benefitted from dollar strength. Edinburgh Worldwide (EWI), a position we have traded in the past, has been reintroduced to enhance the beta of the portfolio.EWI, a global generalist, currently has very little exposure to the UK stock market, instead favouring positions in North America, Europe and selected Emerging Markets. One other recent addition is that of a Taiwan ETF. Following the election success of the Chinese National Party earlier this year, the government are communicating with mainland China for the first time in many years and have opened up transportation links.The Taiwanese stock market has been sold off this year because it was seen as the 'last man standing' in Asia and has been the victim of profit takers. We appreciate the need for patience, but have little doubt that over time, the Taiwanese stock market will benefit greatly from a warmer relationship with China. Positions in a number of property vehicles have been scaled back as we anticipate a further leg down in the sector which will present an opportunity to buy back in.
596.93p
