Athelney Trust PLC
Legal Entity Identifier:
213800ON67TJC7F4DL05
The unaudited net asset value of Athelney Trust was 270.1p at 28 February 2022.
Fund Manager's comment for February 2022
Russia's invasion of Ukraine this week rocked financial markets and it is interesting to note that while Treasury yields plunged across the entire curve, they recovered swiftly with the yields on the two-year and 10-year US Treasury notes actually higher today than they were before the conflict started. This would seem to indicate that since the United States and Western allies are unlikely to deploy troops into the Ukraine, resorting instead to applying sanctions on state-owned financial institutions, high net-worth Russian individuals as well as Russian sovereign debt, the Federal Reserve's and other central banker's policy tightening plans are unlikely to be changed by these geopolitical developments. While Russian equity prices have collapsed by over 50%, the economic fallout on the global economy is likely to be minimal. The nominal GDP of the Ukraine was approximately $154 billion and while the Russian economy is significantly larger at $1.7 trillion, it accounts for less than 2% of global GDP. U.S. exports to Ukraine and Russia total only $2 billion and $6 billion respectively and EU exports to the two countries is less than 1% of the total EU's GDP. The picture is very different in terms of its inflationary impact since Russian production of crude oil amounts to 10 million barrels per day or roughly 10% of global oil production and it is the major supplier of natural gas to many countries in Western Europe.
For the most part, CPI inflation across the major developed economies remains elevated due to COVID as evidenced in recent data. Here in the UK, the January CPI report surprised to the upside with the Headline CPI edging up to 5.5% year-over-year and with core CPI at 4.4%. Given this and the now elevated inflationary expectations, we anticipate further, but gradual Bank of England tightening with its concomitant impact on asset prices which is to put pressure on the high PE valuations of the market and growth stocks in particular. This is evidenced in the MSCI declining by 2.7% during the month, largely driven by similar declines in the broader US market where the S&P500 index reported an overall decline of 3.1% and the tech heavy NASDAQ declined by 3.4%. The UK markets responded similarly with the broad indicator, the FTSE 250 Index closing down by 3.9% over the month as compared to the FTSE 100 which was down by 0.1%. As mentioned previously, the FTSE 100 is home to many larger, older and more traditional companies including BP, Royal Dutch Shell and various utility companies. The Fledgling Index was down by 3.8% during the month with the Small Cap Index declining by 3.9%. Of the various indices, the AIM All Share Index showed the biggest decline of 5.0%.
During the month we sold our holding in Forterra and increased our exposure to Paypoint and Fevertree following recent announcements by these companies. Our portfolio declined by 4.0% during the month, in line with the overall market. This resulted in a 4.2% decline in the NAV after providing for the expenses which remain under strict control. Cash currently comprises 3.9% of the portfolio at month end.
Fact Sheet
An accompanying fact sheet which includes the information above as well as wider details on the portfolio can be found on the Fund's website www.athelneytrust.co.uk under "About" then select "Latest Monthly Fact Sheet".
Background Information
Dr. Emmanuel (Manny) Pohl AM
Manny is Chairman and Chief Investment Officer of E C Pohl & Co ("ECP"), an investment management company and has been a major shareholder in Athelney trust for many years.
E C Pohl & co is licensed by the Australian Financial services (licence no.421704).
Manny Pohl and the ECP group has AUD2.7bn (£1.5 billion) under its management including four listed investment companies, three listed in Australia and one in the UK:
· Flagship Investments (ASX code:FSI)
AUD95m https://flagshipinvestments.com.au
· Barrack St Investments (ASX code: BST)
AUD37m www.barrackst.com
· Global Masters Fund Limited (ASX code: GFL)
AUD33m www.globalmastersfund.com.au
· Athelney Trust plc (LSE code: ATY)
GBP6m www.athelneytrust.co.uk
Athelney Trust plc Investment Policy
The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth with the risks inherent in small cap investment minimised through a spread of holdings in quality small cap companies that operate in various industries and sectors. The Fund Manager also considers that it is important to maintain a progressive dividend record.
The assets of the Trust are allocated predominantly to companies with either a full listing on the London Stock Exchange or a trading facility on AIM or ISDX. The assets of the Trust have been allocated in two main ways: first, to the shares of those companies which have grown steadily over the years in terms of profits and dividends but, despite this progress, the market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.
Athelney Trust was founded in 1994. In 1996 it was one of the ten pioneer members of the Alternative Investment Market ("AIM"). In 2008 the shares became fully listed on the main market of the London Stock Exchange. Athelney Trust has a successful progressive dividend growth record and the dividend has grown every year since 2004. According to the Association of Investment Companies (AIC) Athelney Trust is one of only "22 investment companies that have increased their dividend every year between 10 and 20 years - the next generation of dividend heroes" (as at 20/03/2018). See link
Website
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