For financial professionals in the UK

Fund Manager January Commentary – Lowland Investment Company

11 Feb 2021

Following strong gains in November and December, in January the FTSE All-Share fell modestly (-0.8%). At the sector level a rise in the oil price (following the largely unexpected decision by Saudi Arabia to curb oil production) meant that energy was the best performing sector in the UK. Strong commodity prices more broadly (such as iron ore) also meant the materials sector outperformed.

For Lowland specifically, the best performers during the month were broadly companies that reported encouraging pre-close trading updates (for example construction equipment producer Somero Enterprises, flooring distributor Headlam, and free-to-air broadcaster STV). The exception to this was Ilika, which performed well on the back of little material news (but with ongoing strong interest in the alternative energy area). We had a good meeting during the month with the Ilika management team who are making steady progress in commercialising their solid-state batteries, although it remains early stage in terms of revenue generation and therefore there are ongoing risks on the route to full commercialisation.

In terms of transactions, in the energy sector we added to companies such as Serica Energy and Jadestone Energy, which are buying cash generative assets from the oil majors as part of their ongoing disposal programmes. Both have experienced management teams and conservative balance sheets. The position in bowling alley operator Ten Entertainment was reduced, as it was reaching near historic average valuation levels on an assumption that 2022 earnings would show a strong recovery. The path to re-opening leisure assets in the UK remains uncertain and therefore in our view it was prudent to reduce the scale of the holding.


Commodity: A physical good such as oil, gold or wheat. The sale and purchase of commodities in financial markets is usually carried out through futures contracts.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.


Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.


The information in this article does not qualify as an investment recommendation.


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Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. This is a marketing communication. Please refer to the AIFMD Disclosure document and Annual Report of the AIF before making any final investment decisions.
    Specific risks
  • If a Company's portfolio is concentrated towards a particular country or geographical region, the investment carries greater risk than a portfolio that is diversified across more countries.
  • Some of the investments in this portfolio are in smaller company shares. They may be more difficult to buy and sell, and their share prices may fluctuate more than those of larger companies.
  • This Company is suitable to be used as one component of several within a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested in this Company.
  • Active management techniques that have worked well in normal market conditions could prove ineffective or negative for performance at other times.
  • The Company could lose money if a counterparty with which it trades becomes unwilling or unable to meet its obligations to the Company.
  • Shares can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • The return on your investment is directly related to the prevailing market price of the Company's shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Company. As a result, losses (or gains) may be higher or lower than those of the Company's assets.
  • The Company may use gearing (borrowing to invest) as part of its investment strategy. If the Company utilises its ability to gear, the profits and losses incurred by the Company can be greater than those of a Company that does not use gearing.