December was a busy time for the Church House UK Equity Growth portfolio.
With the omicron and inflation-induced volatility, coupled with a handsome receipt of inflows, we put the dry powder to work across the month, when and where opportunities arose.
In total, a third of the portfolio was added to and we reduced one holding. Bioventix, the AIM-listed biotech, was effectively cleared from the portfolio. Fundamentally, we love the business, but its size and position in the portfolio was beginning to make it untenable. It remains in our smaller companies’ fund where we believe it is best suited. The business is a niche portfolio of SMAs (Sheep Monoclonal Antibodies) which are used across diagnostic applications such as clinical blood testing. Their largest product is used in testing for Vitamin D deficiency and their customers are large multinationals such as Roche, Abbott and Siemens. It is a true market leader with a well-established management team and we continue to believe it will do very well.
As the volatility unfolded, and certain sectors ebbed and flowed, we added to our favourite companies when opportunities arose. In materials and industrials, Croda, Halma and Spirax-Sarco Engineering were all added to. In healthcare, we took advantage in the index movements to add to newly-promoted FTSE 100 stock Dechra Pharmaceutical, whilst we also added to AstraZeneca and Genus. As the omicron-wave hit London in mid-December we added to our favourite consumer stocks who were all hit, in particular JD Sports Fashion, InterContinental Hotel Group and AutoTrader who would all have suffered if a stringent lockdown had occurred before Christmas. Finally in financials we added to Close Brothers Group and to Kainos in technology.
The portfolio ended the year with 45 holdings and the Top 10, see chart, right.
The UK Equity Growth Fund returned 19.6% (Z inc shares) versus the FTSE 100: 14.3% and FTSE All-Share: 14.55%.