Most equity markets have spent the month, since our last commentary, in consolidation mode, China being the exception after being given the regulatory nod to go up(!), but this is not a market that Esk invests in.

The S&P 500 was marginally ahead having twice dipped back to the 3000 level. Torn, as so frequently at the moment, between a shocking jump in COVID-19 cases in southern US States, quite what the economic damage will eventually prove to be, support from Federal Reserve policy and, more recently, the prospects for a vaccine. Once again, the strength has come from technology, the NASDAQ Composite being up a further 7% and reaching new highs again.

The Fund’s portfolio has benefitted from these international trends with big gains coming from the major tech stock holdings, notably, Amazon, Microsoft, Alphabet and Apple. But there were good moves in a number of areas, our Japanese holdings had a good period with M3 Inc, Nidec and Sony all performing well. Most of our pharmaceutical holdings fared well with Lonza Group a stand-out feature again, but Novartis drifted lower again and the sale of this holding today has been our one transaction of the period.

Rio Tinto were strong in the wake of rising iron ore prices and an improving Chinese economy while dull performance came from some of the big staple goods companies, notably Unilever, which drifted around 5%, Mondelez and Essity. We are now entering the corporate reporting season, commencing with the big banks this week, so will learn a lot more over the next few weeks as to how companies are actually faring. Our major US bank holding, Morgan Stanley, has just reported good figures and has picked-up well over the past few weeks. Generally, the financials had a good month across the various sub-sectors, T Rowe Price, Euronext and Berkshire Hathaway among the best in the portfolio.

A contrasting note came from Heineken in their preliminary first-half figures released today. Beer volume being down 13.5%, not really a surprise with so many bars closed over the period, and they are taking a €550 million impairment charge. Their stock price was down today but is unchanged over the period, this feels like a ‘deck clearing’ exercise and we expect growth to resume for this great company.