The St Helens Capital (SHC) Ailsa Fund was up +3.32%, and the SHC Arran Fund +3.68%, in April on the back of stronger equity markets.
The manager noted that one cause of the recent rally in equity markets may be the improvement in earnings downgrades, as well as the increasingly popular belief that bad news has already been priced into the market and a modest recovery in debt markets. In light of this the manager has been reviewing the defensive positions in the SHC Funds' portfolios, believing the best mispricing opportunities may come from the current discrepancy between defensive and cyclical stocks. However, should the current estimates of 2010 EPS growth prove too optimistic, the downgrade cycle may resume its downward trend.
