Evenlode Income rose +0.6% in the month compared to +0.5% for the FTSE All-Share and +0.1% for the IA UK All Companies sector. These figures mask some significant intra-month volatility, with the July rotation away from large US technology shares morphing into a broad-based global sell-off in the first week of August as weak US jobs data led to economic worries. By 5 August the FTSE All-Share was down -4.5%. Global markets then recovered, as subsequent economic data reassured. Signs of disinflation also continued, and, in the last week of the month, Federal Reserve Chairman Jerome Powell dropped heavy hints that a series of interest rate cuts will begin in September.

The strongest contributors to the fund’s return were Bunzl, Reckitt and LSEG. Bunzl announced good interim results, a 10.4% dividend increase and a new share buyback programme following a significant increase in cash generation in recent years. Reckitt’s share price more than recovered the losses in July following a lost court case by US infant formula peer Abbot. News on the ongoing litigation process may drive more volatility in the share price than is normally the case, but we continue to view Reckitt’s valuation as highly attractive. LSEG released strong interim results and a 14.8% increase in the dividend.

The most negative contributors to return were Spirax, RELX and Savills. While Spirax’s interim results were impacted by weak demand in China and the biopharmaceutical sector, it returned to revenue growth and medium-term growth prospects remain strong. Following a strong run since October last year, Savills’ share price fell following interim results, despite these being encouraging, with early signs of recovery in global real estate markets. RELX’s share price decreased on no specific news.

The global economy remains very mixed and patchy, with geopolitical uncertainty still high and the US election approaching. Post-Covid destocking trends continue to work their way through the system, sectors such as luxury and recruitment are still suffering from a post-Covid hangover, and the Chinese economy is very weak. As a result, some holdings are posting negative revenue growth – notably Hays, PageGroup, Spectris, Victrex, Diageo and Burberry. Most others though, are growing well, so steady aggregate progress is being made. Cash generation remains healthy, and valuations look attractive.

On 1 September, the fund went ex-dividend, declaring a first quarter rate of 1.73p per share (B Income shares), representing a rise of +3.6% year-on-year.