Ocean Equity Monthly Manager Commentary – January 2025
Manager view
The start of a new Trump administration saw global equities trading higher in January, with the UK and Europe the standout performers. Despite this, there were three bouts of volatility to digest, highlighting the caution that surrounds the otherwise positive market. Inflation jitters resurfaced at the start of the month, casting doubt on the number of rates cuts the US Federal Reserve will deliver this year. Markets had been expecting a series of cuts, but persistent price pressures and solid economic data now suggests the Federal Reserve may take a more cautious approach. Donald Trump’s inauguration was swiftly followed by a record number of executive orders reinforcing his America First agenda. Then came the most dramatic move of the month with the release of Chinese company DeepSeek’s new AI model – which appeared to offer a similar product to US counterparts at a much lower cost. Finally, the spectre of trade tariffs weighed on sentiment as the Trump administration announced it would impose tariffs on imports from Canada, Mexico, and China.
The UK’s FTSE 100 set a new high with the benchmark posting its best month for two years. Tougher restrictions on Russian oil by the US and colder temperatures in the Northern Hemisphere benefitted the UK’s commodity-heavy constituents, as did investors’ concern for highly rated US technology stocks in the wake of DeepSeek AI’s breakthrough. A weaker pound provided a third tailwind to the UK, with about three-quarters of All-Share revenues coming from overseas.
Discrete performance
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | |
| Fund | 3.42% | 8.67% | -22.63% | 27.74% | -2.40% | 24.04% |
| IA Sector | 7.87% | 7.38% | -9.06% | 17.25% | -6.01% | 22.24% |
| Rank in Sector | 200/225 | 79/231 | 202/228 | 9/222 | 53/217 | 80/209 |
| Quartile | 4 | 2 | 4 | 1 | 1 | 2 |
Total return, bid to bid, tax UK net, sterling terms. Source: Waystone Fund Services UK Limited/Financial Express Analytics. Past performance is not a reliable indicator of future results. The value of your investment and the income derived from it can go down as well as up, and you may not get back the money you invested.
Company news
Experian, the data management company, issued an encouraging Q3 trading update. Revenue was up 8%, whilst foreign exchange resulted in a 2% headwind. Management reiterated FY25 expectations of revenue growth of 6-8% and margin accretion at the upper end of 30-50 basis points. For context, Experian is a global leader in the provision of data and analytical tools to manage credit risk, prevent fraud, target marketing initiatives whilst automating decision making. The company started life in 1826 when a group of London-based merchants began exchanging information on customers who failed to pay their debts. In the late 1990s the UK and US operations were combined to form Experian, and the IPO came via the demerger from GUS (Great Universal Stores). The shares have delivered a CAGR of over 12% v c.7% for the FTSE All Share over the last 20 years. Its biggest segment is business-to-business (B2B) where it has cleverly integrated data analytics and fraud detection into a single interface. As with any investment there are risks around key personnel, cyber-attacks and keeping the product portfolio relevant for end users. In terms of a cyber-attack these incidents will continue to happen, but the key will be how management react, and how they communicate with investors that will be crucial. Experian is well positioned to grow its market share via product innovation and customer growth over the medium term.
Marks & Spencer issued a Christmas trading update which continues to demonstrate the progress the group is making optimising operations. Sales records were broken across the business with food recording its biggest day and clothing, home & beauty its biggest ever week. In terms of revenue growth, food like-for-like revenue was up c.9% and clothing, home & beauty up nearly 2%. Management commented that whilst this was pleasing “we’re not complacent – as a growth business it’s our job to break records”. As investors of your capital, we focus on companies with low-ego management combined with a coherent strategic plan. Though we think M&S has a sound growth trajectory via store and logistics optimisation, our optimism is tempered by a challenging cost environment which we will continue to monitor. Despite these concerns, we are encouraged that the turnaround continues to gather pace via volume growth, market share gains, and further self-improvements. The shares rose c.38% in 2024 and continue to offer attractive value at c.13x FY25 earnings when set against the medium-term expectations of a net cash balance sheet, rising dividends and profits of potentially around £1 billion. We also note that the clothing segment is set for a shake up underpinned by the recent announcement that John Lyttle is to be the new Managing Director. John arrives from Boohoo Group plc, but of more interest is his role running Primark for nine years where he was COO responsible for delivering its global expansion.
Michael Foster – Lead Portfolio Manager Ocean Equity
January 2025
………………………
The Ocean Equity Fund does not have an objective linked to the oceans or marine bio-diversity but the Fund Manager may choose to invest in companies that derive their revenue from shipping and energy transition sectors.
AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY | MEMBER OF THE LONDON STOCK EXCHANGE
| NOT FOR DISTRIBUTION IN THE U.S.A.
This factsheet has been issued by Fiske plc on the basis of publicly available information, internally developed data and other sources believed to be reliable and accurate. No representations or warranty, expressed or implied, is made nor responsibility of any kind is accepted by Fiske plc, its directors or employees either as to the accuracy or completeness of any information stated in this factsheet. Any opinions expressed (including estimates and forecasts) may be subject to change without notice. This document is not intended as an offer to buy or sell the fund nor as a personal recommendation. Fiske plc, or any of its connected or affiliated companies or their employees, may have a position or holding or other material interest in the fund concerned or in a related investment, or may have provided within the previous twelve months, significant advice or investment services in relation to the investment concerned or a related investment.
Investors must be aware of the risks associated with investment in this fund. Full details of the Ocean Equity Fund, including risk warnings, are published in the Prospectus and Key Investor Information document. The fund may not be suitable for all investors and if you are in any doubt whether the fund is suitable for you advice should be sought from a suitably qualified professional advisor. The value of the fund and the income derived from it can go down as well as up. Investors may not get back their initial investment. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realised. Securities denominated in foreign currencies may see their value fall as a result of exchange rate movements. Any comments contained in this factsheet are intended only for the use of the individual or entity to which it is addressed and may contain information which is confidential and may also be legally privileged.
If you have received this document in error, please telephone the Compliance Department on 44 (0)20-7448-4700.
Fiske plc FCA Register No: 124279
