The FTSE All-Share made yet further progress during July, with a total return of just under 4.0% and the FTSE 100 achieved a new all-time high when it soared through 9000 during the month and then went on to breach 9100. During the calendar year to the end of July, the FTSE All-Share has generated a strong total return of 13.4%.
At face value, this is somewhat surprising as economic announcements in the UK were not generally favourable. Inflation is proving to be stubbornly high, with the rate of consumer price inflation for June announced as 3.6%, which was both higher than forecast and above the rate of 3.4% in May (according to the Office for National Statistics). Unemployment figures were also higher than expected. The Office for Budget Responsibility released its 2025 Fiscal Risks and Sustainability Report which highlighted the challenge the government is facing with its fiscal situation, which has been further exacerbated by the watering down of its welfare reform bill.
However, as has been observed many times, the UK stock market is not the same as the UK economy. Many UK-listed companies are truly international in their businesses, and/or are operating in parts of the economy that are performing better than average. For example, just looking at news from our portfolio during the last month, there was a trading statement from Intermediate Capital Group which showed continued strong new business momentum for its fund-management operations with fee-earning assets up 4% for the quarter and up 11% year on year. SSP, the international catering group, benefited from the initial public offering of one of its joint ventures, Travel Food Services, in India. SSP owns just over 50% of this business, which is now worth around 44% of SSP’s market value, yet it contributes a much lower percentage to SSP’s earnings. This, we believe, helps to highlight the undervaluation of the rest of the company.
As at 31 July 2025
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