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FINANCIAL HIGHLIGHTS |
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(Unaudited) As at 31 October 2018 |
(Audited) As at 30 April 2018 |
Movement % |
|
Total net assets |
£1,683,065,000 |
£1,551,611,000 |
+8.5 |
|
Net assets per ordinary share |
1257.66p |
1159.69p |
+8.4 |
|
Price per ordinary share |
1176.00p |
1148.00p |
+2.4 |
|
Benchmark Dow Jones World Technology Index (total return, Sterling adjusted, with the removal of relevant withholding taxes) |
1062.31 |
992.81 |
+7.0 |
|
Premium/(discount) of ordinary share price to net asset value per ordinary share |
(6.5%) |
(1.0%) |
|
|
Ordinary shares in issue |
133,825,000 |
133,795,000 |
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|
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KEY DATA |
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For the six months to 31 October 2018 |
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Local Currency % |
Sterling Adjusted % |
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|
|
|
|
|
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Benchmark |
-0.7 |
+7.0 |
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Other Indices (total return) |
|
|
|
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FTSE World |
-3.0 |
+4.7 |
|
|
FTSE All-share |
-3.5 |
-3.5 |
|
|
S&P 500 composite |
+3.4 |
+11.6 |
|
|
Nikkei 225 |
-1.5 |
+2.7 |
|
|
Eurostoxx 600 |
-4.6 |
-3.8 |
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Exchange rates |
As at 31 October 2018 |
As at 30 April 2018 |
|
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US$ to £ |
1.2778 |
1.3774 |
|
|
Japanese Yen to £ |
144.20 |
150.72 |
|
|
Euro to £ |
1.1277 |
1.1400 |
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No interim dividend has been declared for the period ended 31 October 2018 nor the periods ended 31 October 2017 or 30 April 2018 and there is no intention to declare a dividend for the year ending 30 April 2019.
INVESTMENT MANAGER'S REPORT
Market Review
The half year to 31 October 2018 saw most major equity markets decline in local currency terms but this was more than offset by the US market and US Dollar strength (+7.8% vs. Sterling) which left the FTSE World Index 4.7% higher in Sterling terms.
The period was dominated by higher US interest rates, trade-war escalation and a growing divergence of economic fortunes and central bank policy. In the US, 10-year sovereign yields rose to 3.2% (from 2.9% at the start of the period) reflecting a robust economy, tighter labour market (unemployment fell to multi-decade lows of 3.7%), two interest rate hikes and more hawkish Fed commentary.
Aided by a significant dose of late-cycle fiscal stimulus, US corporate earnings growth and Dollar strength saw the S&P 500 advance 11.6% in Sterling terms while in August, the US bull market officially became the longest on record. In contrast, the rest of the world struggled with the impact of the stronger Dollar and the escalation of the trade dispute between the US and China that saw the imposition of $200bn and $60bn of tariffs on each other's imports respectively by the period end.
The combination of weaker trade and a resurgent Dollar (the trade-weighted Dollar advanced 5.8% during the period) took its toll on emerging markets, particularly Argentina and Turkey. The Chinese equity market officially entered bear market territory in June, while Q3 2018 GDP growth was its slowest since Q1 2009 despite incremental monetary and fiscal stimulus. As a result, in Sterling terms, Asian equities performed particularly poorly (-10.9%), with deteriorating semiconductor fundamentals adding to the gloom. Japanese stocks also fell (-1.5%) weakening economic conditions while European equities (-4.6%) had to further contend with ongoing political uncertainty both in the form of Brexit and a populist government in Italy also looking to challenge the EU.
Risk-off sentiment finally caught up with US markets in October. Worsening trade tensions, a choppier earnings season and imminent mid-term elections presaged the largest S&P 500 retracement (in Dollar terms) since 2008. Post period end, markets have traded lower amid heightened volatility associated with trade-war tension and other political risk including Brexit.