Chelverton UK Dividend Trust PLC Fund Data

The short-term focus of investors' attention remains on the situation in the Middle East and the economic effects of the continued closure of one of the world's major shipping lanes. Whilst peace talks continue, scepticism remains as to their effectiveness. In a traditionally quiet month for UK company reporting the financial markets attention tends to be focussed elsewhere and domestically this has added to the sense of gloom with widespread discussion of our relatively high energy costs, rapidly increasing employment costs and the low housebuilding rate. The latter is particularly important from a growth perspective because of the multiplier effect of every pound spent in the sector. On the positive side however, companies are now beginning to talk about the potential benefits of AI to their businesses. Obviously, within our investible universe we have little direct exposure to the cutting edge of this technology, but by adopting new products in this area certain tasks could become more cost effective for our holdings. Interestingly, in a quiet month for company reporting, May was a relatively good month for UK small and mid-cap. Within our own portfolio, positive contributors to performance included Hollywood Bowl, who issued reassuring half year results against tough comparators; Polar Capital whose AUM continues to grow, reflecting the positive performance of its Tech franchise in particular; and Zigup who also delivered a trading update at the top end of expectations. In terms of detractors, Serica Energy gave up some of its gains; RTC Group fell on the release of its trading update, which communicated a challenging cost inflationary environment for its customers due to the Middle East conflict; and Wickes Group's share price also suffered despite an in-line trading update. We started a position in Card Factory, the vertically integrated greeting card and gift retailer.

The short-term focus of investors' attention remains on the situation in the Middle East and the economic effects of the continued closure of one of the world's major shipping lanes. Whilst peace talks continue, scepticism remains as to their effectiveness. In a traditionally quiet month for UK company reporting the financial markets attention tends to be focussed elsewhere and domestically this has added to the sense of gloom with widespread discussion of our relatively high energy costs, rapidly increasing employment costs and the low housebuilding rate. The latter is particularly important from a growth perspective because of the multiplier effect of every pound spent in the sector. On the positive side however, companies are now beginning to talk about the potential benefits of AI to their businesses. Obviously, within our investible universe we have little direct exposure to the cutting edge of this technology, but by adopting new products in this area certain tasks could become more cost effective for our holdings. Interestingly, in a quiet month for company reporting, May was a relatively good month for UK small and mid-cap. Within our own portfolio, positive contributors to performance included Hollywood Bowl, who issued reassuring half year results against tough comparators; Polar Capital whose AUM continues to grow, reflecting the positive performance of its Tech franchise in particular; and Zigup who also delivered a trading update at the top end of expectations. In terms of detractors, Serica Energy gave up some of its gains; RTC Group fell on the release of its trading update, which communicated a challenging cost inflationary environment for its customers due to the Middle East conflict; and Wickes Group's share price also suffered despite an in-line trading update. We started a position in Card Factory, the vertically integrated greeting card and gift retailer.