Plenty of things pushing the markets around over the last month, Trumpy tariffs, Bojo's Brexit plans, Iran, Hong Kong...as a consequence we've seen plenty of volatility. Some of this is going to start hitting business performance, so it's no surprise to see investors getting nervous. Since I'm looking to buy, this is not a wholly bad state of affairs from my point of view. If Mr Market has a few tantrums over the next few months that will hopefully provide a few discounts, and the chance to lock in some higher dividend yields.
However, I'm remaining cautious particularly since Brexit feels somewhat binary: a softer version is likely to cause Sterling to spike, and drop the prices of the big international firms; whereas a harder Brexit is likely to cause a bit of a sell off of UK facing businesses. I'm not too concerned about the long term, but would be nice to be able to capitalise on cheaper prices and bigger dividends. I have plenty of interesting businesses and trusts to research, anything looking relatively Brexit-proof may well make it onto the shopping list.
Portfolio
The portfolio was beaten up a bit during August, like the wider markets, but just sneaked in ahead of my benchmark. The portfolio was down -3.2% compared to my chosen benchmark the Vanguard FTSE All Share Accumulation fund which was down -3.9% over the same period.
Sprinting ahead this month was old timer Unilever (ULVR), +5%. It's not often ULVR gets up above walking pace, but managed it this month. I suspect it's a result of people diving into defensive stocks to escape the volatility.
AG Barr (BAG) wasn't so steady on it's feet and took a tumble this month, -13%. Not too concerning just bouncing around after the big price drop last month from what I can tell. Nice to see the firm capitalising on the price and indulging in buy back activity, tick in the box for BAG.
August share purchase:
Network International (NETW) are a digital payment provider operating across the Middle East and Africa. They listed on the FTSE earlier this year - their IPO was in April. This is an unusual one for me, as I would rather a company had been operating as a listed business for a while to make sure any skeletons in the cupboard from their private days had been appropriately dealt with. So, as with any purchase that I think is a little racy, to mitigate some of that risk I've taken a smaller position.
NETW are based out of Dubai, and following the IPO have a valuation over £2.8bn, so they are not exactly a minnow, comfortably nestled in the FTSE 250 amongst household names such as Cineworld. However, compared to the $43bn paid by FIS for Worldpay recently they have some much bigger firms to compete with. It is this sector consolidation and the defensive nature of the payments industry that drove the purchase. I was also encouraged to see Mastercard take a 10% stake at the IPO. I'm not keen on buying at IPOs simply because it's never clear if the price is going to shoot upwards or crash. NETW has been moving upwards and following a recent positive trading update I was convinced to put in a little money. If it continues it's good news I will put in a bit more.
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