Markets can sometimes appear to move in mysterious ways and, in this case, investors are looking on the bright side, believing that the underlying strength of America’s increasingly enormous Technology sector outweighs the many negative economic and political developments. While we applaud Mr Market’s ability to ignore and move on from Mr Trump’s hot air, we do have a niggling worry that amidst all the concern for the (existential) risks of erratic policy making we might be missing the risk of a straightforward economic slowdown.

Esk returned 2.1% during the quarter, leaving the unit price broadly flat year-to-date. While our relatively more conservative positioning benefitted the Fund in the first quarter, we have lagged the Tech-driven rally of recent weeks. We used the opportunity of weak markets during spring to initiate two new positions. The first was Atlas Copco, the Swedish-listed industrial, specialising in all things relating to the movement of air, be that the products within aircon units cooling us during the heatwave, or enormous vacuum pumps used in laboratories. Atlas Copco is a business that we have admired for many years but always felt that shares were too highly valued – the 2025 market sell-off finally bought shares into range for us.

The second new addition is the Danish pharmaceutical giant Novo Nordisk. Novo are the world leader in insulin for diabetes care and have more recently spearheaded the growth of new GLP-1 weight-loss treatments under their brand Wegovy. Novo shares had more than halved in value up to the point that we initiated a position after market worries that Eli Lilly’s rival obesity product would eat Wegovy’s dinner – we feel that the concerns are over-hyped and that Novo will continue to grow strongly.

On the other side, we swiftly exited our relatively small position in UnitedHealth Group after a profit warning that made deciphering the Enigma code look easy and were relieved to do so as they have continued to come out with bad news. We also sold our Novonesis after concluding that the business was not quite what it once was – their renaming as Novonesis being a merger of Novozymes and Genesis was a step too far for us!

As would be expected during a Tech rally, our top performers over the quarter were the likes of Microsoft, Amazon and, most remarkably, Oracle shares more than doubling in the period. It was also pleasing to see a recovery in our banking stocks, namely Morgan Stanley and Standard Chartered.

Our laggards were predominantly in the consumer space, where reduced global spending has hit everything from handbags (LVMH and Hermès), to chocolate (Nestlé) and makeup (L'Oréal). While we do not expect trading conditions to improve for these businesses in the near-term, these remain excellent businesses with unique brands that we are confident will stand the test of time (again).

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.