Bankers Investment Trust PLC Fund Data

Global equity markets declined in the first quarter, mainly due to a sharp sell-off in March after fighting in the Middle East escalated. Strong corporate earnings helped many stock market indices reach all-time highs midway through the period, despite bouts of volatility in the technology sector. Markets then fell heavily following the outbreak of hostilities in the Middle East, which sent oil prices soaring. This fuelled concerns about accelerating inflation and a slowdown in economic growth. The US Federal Reserve (Fed) kept interest rates on hold during the quarter, and markets scaled back their expectations for the next interest-rate cut. Both the Bank of England (BoE) and the European Central Bank (ECB) also left rates unchanged, with policymakers' warnings about the risk of higher inflation causing investors to contemplate that the next moves could be to raise rates. The energy sector was by far the strongest performer given higher oil and gas prices. Telecommunications, basic materials and utilities also outperformed, with the latter benefiting from its more defensive characteristics. Conversely, technology stocks posted the weakest returns as investors were worried about elevated share prices and high levels of artificial intelligence (AI)-related capital expenditure (capex). Consumer discretionary stocks also lagged the index, which reflected weakening consumer confidence. Emerging markets and Asia Pacific ex Japan were the top two performing equity regions. A weaker US dollar, which increased investor interest in non-US assets, and enthusiasm about AI were supportive early in the quarter before the downturn in March. Japanese equities also outperformed, while US equities underperformed. Asia Pacific ex Japan and Japan made positive contributions to absolute returns. Other regions were negative, with North America faring worst. Stock selection detracted, with selections in US equities and European equities weighing the most on relative performance. At the sector level, stock selection in industrials, financials and consumer discretionary detracted the most from relative performance. On the positive side, stock choices in the technology sector contributed favourably. Sector allocation detracted moderately. The technology overweight position and the underweight position to the basic materials sector were unhelpful, but the utilities underweight aided relative performance. At the stock level, notable detractors from relative performance included Microsoft, Amazon and Meta. Conversely, TotalEnergies, Chevron and Applied Materials were among the contributors. Given the dynamic nature of events in the Middle East, volatility will likely remain elevated. As active investment managers with the widest possible opportunity set in global equities, we can continue to navigate these cross currents to take advantage of what we see as attractive investment opportunities. Our investment focus on strong company profits and cash flows as part of a diversified portfolio can provide resilience during these more volatile times, while our regional and sector expertise as well as our fundamental research process allows for a deep understanding of the risks and opportunities these global events provide. Taking a step back while the headlines can seem daunting, we view these events as reinforcing some of our long-held themes around the need for greater electrification and deglobalisation, while at the same time some trends remain inexorable, such as providing for ageing populations or the rise of the AI technology wave. By investing for the long term while understanding (but not necessarily reacting to) the short-term noise, we aim to deliver dependable long-term capital growth for our investors while also growing the dividend over time. This provides investment discipline not just to the companies we invest in, but also for us as the stewards of your capital.

Global equity markets declined in the first quarter, mainly due to a sharp sell-off in March after fighting in the Middle East escalated. Strong corporate earnings helped many stock market indices reach all-time highs midway through the period, despite bouts of volatility in the technology sector. Markets then fell heavily following the outbreak of hostilities in the Middle East, which sent oil prices soaring. This fuelled concerns about accelerating inflation and a slowdown in economic growth. The US Federal Reserve (Fed) kept interest rates on hold during the quarter, and markets scaled back their expectations for the next interest-rate cut. Both the Bank of England (BoE) and the European Central Bank (ECB) also left rates unchanged, with policymakers' warnings about the risk of higher inflation causing investors to contemplate that the next moves could be to raise rates. The energy sector was by far the strongest performer given higher oil and gas prices. Telecommunications, basic materials and utilities also outperformed, with the latter benefiting from its more defensive characteristics. Conversely, technology stocks posted the weakest returns as investors were worried about elevated share prices and high levels of artificial intelligence (AI)-related capital expenditure (capex). Consumer discretionary stocks also lagged the index, which reflected weakening consumer confidence. Emerging markets and Asia Pacific ex Japan were the top two performing equity regions. A weaker US dollar, which increased investor interest in non-US assets, and enthusiasm about AI were supportive early in the quarter before the downturn in March. Japanese equities also outperformed, while US equities underperformed. Asia Pacific ex Japan and Japan made positive contributions to absolute returns. Other regions were negative, with North America faring worst. Stock selection detracted, with selections in US equities and European equities weighing the most on relative performance. At the sector level, stock selection in industrials, financials and consumer discretionary detracted the most from relative performance. On the positive side, stock choices in the technology sector contributed favourably. Sector allocation detracted moderately. The technology overweight position and the underweight position to the basic materials sector were unhelpful, but the utilities underweight aided relative performance. At the stock level, notable detractors from relative performance included Microsoft, Amazon and Meta. Conversely, TotalEnergies, Chevron and Applied Materials were among the contributors. Given the dynamic nature of events in the Middle East, volatility will likely remain elevated. As active investment managers with the widest possible opportunity set in global equities, we can continue to navigate these cross currents to take advantage of what we see as attractive investment opportunities. Our investment focus on strong company profits and cash flows as part of a diversified portfolio can provide resilience during these more volatile times, while our regional and sector expertise as well as our fundamental research process allows for a deep understanding of the risks and opportunities these global events provide. Taking a step back while the headlines can seem daunting, we view these events as reinforcing some of our long-held themes around the need for greater electrification and deglobalisation, while at the same time some trends remain inexorable, such as providing for ageing populations or the rise of the AI technology wave. By investing for the long term while understanding (but not necessarily reacting to) the short-term noise, we aim to deliver dependable long-term capital growth for our investors while also growing the dividend over time. This provides investment discipline not just to the companies we invest in, but also for us as the stewards of your capital.