World equity markets in August continued the strong performance seen in July, returning +4.8% in the month[1]. US equities[2] were also up strongly, recording a 7.4% rise, in part driven by the Federal Reserve’s willingness to continue with its market support, notably around ‘average inflation targeting’.  FAANG stocks, on which we have regularly commented on in this factsheet this year, were also a significant contributor to markets’ momentum and delivered a +18.5% return over the month (and are now up 78.6% year to date[3]).

Within global fixed income markets, we saw negative price performance from government fixed income markets, reflected rising yields, with a reversal of July’s decline in confidence largely driven by the Fed’s support (per above) and so the Bloomberg Barclays US Treasury Total Return index[4] was down, albeit only 0.01%.  European 10-year yields also rose (from -0.53% to -0.39%), as measured by the generic Eurozone 10-year bond index (source Bloomberg).  Global High Yield bonds continued their post-March momentum, rising by 1.6% in August, and are up 28.5% from their 23 March trough[5]. Global investment grade bond spreads (i.e. their yield vs. the yield of government bonds), tightened slightly vs. the last month (by 21bps[6]), reflecting investors increased appetite for riskier assets seen through this year

Global commodities (in Dollar terms) were up 6.7% over the month as measured by the Bloomberg Commodity index (total return)[7]. Oil prices have continued to rise post their Covid-19 induced fall, with Brent crude up 3.7% in sterling terms.

August data may well yet reflect a peak in many of the indices above, and September market performance has since seen some of this momentum being checked. Increasing rates of COVID-19 transmission and infection, and the renewed social policy response from governments is likely to severely constrain economies’ abilities to recover to any previously optimistic timeline.

Performance and activity

Over August the Company’s Net Asset Value (NAV) rose 0.2%, and the Company’s share price fell 1.7% (total return basis).  The FTSE World Total Return Index, which the Company has historically aimed to outperform over the long-term, returned 4.8% in sterling terms.  The Company’s NAV is down 4.9% for the year at end August (same period FTSE World Total Return, 3.7%)[8].

Investors in the Company should be aware that Company adopted a realisation investment objective in July 2020 and that whilst the FTSE World index remains the Company’s official benchmark, shorter term performance measurement periods that incorporate post-July 2020 performance may differ materially from ongoing benchmark performance. This will be most likely due to either high cash weightings resulting from the current realisation process (and pending return to shareholders), or, post any return of cash to  shareholders, there being a less diversified portfolio with fewer positions (and therefore more volatile in aggregate) than has historically been the case. As at the publication date of this factsheet no cash has been returned to shareholders and the Company’s performance should be considered alongside the realisation update section which follows below.

The best performing sector in August was Hedge Funds, contributing 0.39% to performance. Within this sector, our holding in the Blackrock European Hedge Fund was the principal positive contributor.

Credit was the largest negative performing sector, contributing -0.28% to performance, with the Bank of America Merrill Lynch Commodity strategy delivering -0.22%.

Given the substantial progress now made on realisation of the portfolio, and therefore the greater weight within the remaining investment pool on illiquid funds, reporting on monthly sectoral performance in future factsheets will be replaced with a precis of individual assets’ contribution to performance.

Realisation update

  • As at 18 September cash as a percentage of NAV (as at 18 September) stood at 62.3%, or approx. £77.9m
  • Full realisations (of individual portfolio positions) for the period 22 July to 14 August were:
    • 3i PLC
    • Harbourvest Global Private Equity Ltd
    • KLS Sloan Robinson Emerging Markets Fund
    • Princess Private Equity Holding Limited
    • Worldwide Healthcare Trust
  • Details of full realisations for the period 14 August to 18 September will be reported in our October factsheet


Basis point: one hundredth of one percentage point

Commodities: 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.

FAANG stock: an acronym referring to the stocks of the five most popular and best-performing American technology companies: Facebook, Amazon, Apple, Netflix and Alphabet (formerly known as Google)

High yield bonds: bonds that pay higher interest rates

Inflation: The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures.

Net Asset Value (NAV): The total value of a fund's assets less its liabilities.

Yield: The level of income on a security, typically expressed as a percentage rate

Volatility: The rate and extent at which the price of a portfolio, security or index, moves up and down. If the price swings up and down with large movements, it has high volatility. If the price moves more slowly and to a lesser extent, it has lower volatility. It is used as a measure of the riskiness of an investment

[1] FTSE World Index, in total GBP return terms, source Bloomberg

[2] S&P 500 index, in total GBP return terms, source, Bloomberg.

[3] NYSE FANG + Index, in dollar total return terms. Source, Bloomberg

[4] Unhedged, USD terms, source Bloomberg

[5] Bloomberg Barclays Global High Yield Total Return Index unhedged

[6] Using the BarCap US Corporate High Yield YTW (Yield to Worst) –10 year treasury spread index. Source, Bloomberg.

[7] Source Bloomberg.

[8] Sources: Bloomberg, Janus Henderson.