The backdrop to March was more challenging for global equity markets, leading to the FTSE All-Share Index recording a total return of -2.3% for the month. Despite this fall, the total return for the Index was a very respectable 4.5% in the first calendar quarter of 2025. This is somewhat misleading though as a representation of the return from the ‘average’ company, as favourable share price performance has become highly concentrated among the very largest companies. This is perhaps best illustrated by the marked divergence in performance between the FTSE 100 index (an index of the largest 100 companies listed in the
UK) and the FTSE 250 index (an index of the next largest 250 companies). In most months or quarters there is normally very little to separate performance of the two indices, but in March the FTSE 100 fell 2.0% while
the FTSE 250 fell 3.9%. For the calendar quarter, the gap was one of the widest on record, at +6.1% for the FTSE 100 and -5.0% for the FTSE 250. We firmly believe that companies outside of the very largest in the UK
have greater potential to grow, while are also trading at cheaper valuations. This is reflected in our portfolio positioning and, unfortunately, in our more recent performance.
There was positive news during the month as UK inflation (CPI) for February was reported at 2.8%, which was lower than had been anticipated, and retail sales were far stronger than expected in February with a gain of 1%. This suggests that the consumer has much greater confidence than the seemingly endless negative public commentary on the UK and UK economy would suggest.
There was also a positive announcement from one of our largest holdings, Intermediate Capital Group, as it closed subscriptions to its latest fund, Strategic Equity V at $6bn. This was well ahead of its initial target and more than twice its predecessor fund. On its own, this may not be particularly significant for the company’s profits, but it is yet another strong indicator of its success in raising and managing money.
Geopolitically, there were several major events. The month started with the infamous Trump, Vance and Zelensky conference in the White House. Then there was the US and Ukraine agreed 30-day ceasefire which seemed to be ignored by the major protagonist, and the month ended with building trade tensions and escalating tariffs between the US and its trading partners Canada and the EU.
Investment risks
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment.
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