As throughout the year, the FTSE 100 Index has been held up by a small cohort of major companies, led by Shell and BP, but, thankfully, including AstraZeneca.  The smaller companies that make up the AIM market have continued to struggle.

It was a calmer quarter for the Balanced Equity Income Fund, which saw us make few substantive changes and the top holdings listed below are little changed.  Here (right) is the overall disposition at the end of the quarter.

Exposure to FTSE 100 stocks is a shade lower following the sale of the remaining holding in BT Group, which had been a perennial disappointment.  We did add further to the (relatively) new holding in iii Group after their half-year figures and further presentations on the prospects for Action, the European discount retailer that they control, and their single largest investment.  We have also added to the existing holdings in Bellway and to Cranswick, the meat processor, who reported decent interim figures, including a modest dividend increase in tricky times, both look good value now.

Early in the quarter, we added a new fixed interest holding, a 5.5% bond from KBC Group due in 2028, the area of the corporate fixed interest markets that we consider to be the ‘sweet spot’.  The commercial property companies are showing some signs of life after a desperate year for the sector, we added to our holding in Primary Health Properties after an encouraging meeting with their Finance Director, Richard Howell.  We like their unique portfolio and feel that the sell-off in their shares was unjustified, simply a result of being in a depressed sector.

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.