ATY Athelney Trust Plc

TIDMATY

RNS Number : 8992E

Athelney Trust PLC

04 July 2023

Athelney Trust PLC

Legal Entity Identifier:

213800ON67TJC7F4DL05

The unaudited net asset value of Athelney Trust was 208.8p at 30 June 2023.

Fund Manager's comment for June 2023

China has been the mainstay for world economic growth for many years but is likely to be less so. The June decline in the Chinese manufacturing PMI to 53.2, pointed to a further loss in momentum which is in stark contrast to recent U.S. recent economic data which was strong: durable goods orders rose by 1.7% in May compared to consensus expectations for a decline of 0.9% and real GDP growth in Q1 was revised higher from 1.4% to 2.0%. Inflation-adjusted personal consumption grew at a 4.2% annualised rate in the first quarter, the fastest pace since Q2-2021 when consumers were still emerging from their COVID-induced hibernation. The all important, US Consumer Confidence Index increased to 109.7 in June, up from 102.3.

On the inflation front, while recent Eurozone CPI data pointed to an ongoing improvement in inflation with the index declining to 5.5% year-on-year, UK inflation remained elevated at 8.7%. This prompted the Bank of England to increase rates by a further 50bps resulting in a cumulative increase of 490bps since December 2021.

The rise of artificial learning capabilities and its applications has excited the markets in recent weeks and at the last quarterly earnings calls of America's big tech companies, AI was certainly the centre of attention. At the Alphabet (Googles parent company) meeting AI was mentioned 64 times, Microsoft made 50 mentions and Meta (Facebook's parent company) made 47 references to the emerging technology. Novel uses of AI systems are growing, with many people impressed by first draft capabilities in search, coding, copy writing, support centres, artistic creation and other uses. An exciting prospect is that the use of AI could be the efficiency booster needed to help productivity the same way that personal computers did in the 1980's. This technology is on a hockey stick trajectory of adoption and improvement, so what it looks like in 12 months' time is likely to be very different from today.

The net result of all of the AI media hype was that the MSCI increased by 5.9% driven in large part by the technology stocks in the US. The NASDAQ had another excellent month, up by 6.6% with the S&P500 up by a similar 6.5%. In t he UK, which does not have the same exposure to this emerging technology, other than the FTSE 100 which was up by 1.2%, most of the indices were down. The broader FTSE 250 Index was down by 1.6% while smaller company valuations fared poorly. The Small Cap Index was down by only 0.4%, the AIM All-Share Index was down by 3.7%, while the Fledgling Index fared the worst and was down by 8.7%. The Athelney portfolio also declined with the NAV down by 2.6%.

During the month we continued to reduce our exposure to the property sector, selling down some of our holding in LondonMetric and top slicing our holding in Games Workshop. Cash was used to increase our exposure to Impax Asset Management and Cake Box with our cash holding at month end comprised 3.8% of the portfolio.

Fact Sheet

An accompanying fact sheet which includes the information above as well as wider details on the portfolio can be found on the Fund's website www.athelneytrust.co.uk under "About" then select "Latest Monthly Fact Sheet".

Background Information

Dr. Emmanuel (Manny) Pohl AM

Manny is Chairman and Chief Investment Officer of E C Pohl & Co ("ECP"), an investment management company and has been a major shareholder in Athelney trust for many years.

E C Pohl & co is licensed by the Australian Financial services (license no.421704).

www.ecpohl.com

www.ecpam.com

Manny Pohl and the ECP group has AUD2.7bn (GBP1.5 billion) under its management including four listed investment companies, three listed in Australia and one in the UK:

   --    Flagship Investments (ASX code:FSI) 

AUD95m https://flagshipinvestments.com.au

   --    Barrack St Investments (ASX code: BST) 

AUD37m www.barrackst.com

   --    Global Masters Fund Limited (ASX code: GFL) 

AUD33m www.globalmastersfund.com.au

   --    Athelney Trust plc (LSE code: ATY) 

GBP6m www.athelneytrust.co.uk

Athelney Trust plc Investment Policy

The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth with the risks inherent in small cap investment minimised through a spread of holdings in quality small cap companies that operate in various industries and sectors. The Fund Manager also considers that it is important to maintain a progressive dividend record.

The assets of the Trust are allocated predominantly to companies with either a full listing on the London Stock Exchange or a trading facility on AIM or ISDX. The assets of the Trust have been allocated in two main ways: first, to the shares of those companies which have grown steadily over the years in terms of profits and dividends but, despite this progress, the market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.

Athelney Trust was founded in 1994. In 1996 it was one of the ten pioneer members of the Alternative Investment Market ("AIM"). In 2008 the shares became fully listed on the main market of the London Stock Exchange. Athelney Trust has a successful progressive dividend growth record and the dividend has grown every year since 2004. According to the Association of Investment Companies (AIC) Athelney Trust is one of only "22 investment companies that have increased their dividend every year between 10 and 20 years - the next generation of dividend heroes" (as at 20/03/2018). See link

https://www.theaic.co.uk/income-finder/dividend-heroes

Website

www.athelneytrust.co.uk

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