Net Asset Value(s)

Athelney Trust PLC

Legal Entity Identifier:

213800ON67TJC7F4DL05

The unaudited net asset value of Athelney Trust was 189.4p at 30 September 2024.

Fund Manager's comment for September 2024

In the United States, the Federal Open Market Committee (FOMC) announced a 50-basis point cut in the federal funds rate, bringing the target range to 4.75%-5.00%. This marks the beginning of a monetary easing cycle, despite robust economic growth fuelled by strong retail sales and industrial production. However, indications of weakness in the labour market influenced the Committee's decision for a more aggressive cut. Chairman Powell emphasised the necessity to recalibrate policy in light of current conditions, suggesting that future cuts may be more modest in magnitude.

In the Eurozone, September's manufacturing and services PMIs were underwhelming, with both output and new orders showing signs of weakness. The manufacturing PMI dropped to 44.8, the lowest level since December 2023, indicating continued contraction in the industrial sector. This decline was characterized by reduced new orders and order backlogs. Among major economies, German manufacturing was particularly weak, while France's manufacturing PMI showed relative stability.

On the services front, the Eurozone PMI fell to 50.5 in September, marking the eighth consecutive month in expansion territory, yet still the lowest reading since February 2024. Here too, new business slowed, with Germany's services PMI declining and France's services PMI losing some of the momentum gained during the Olympics in August. Overall, the composite Eurozone PMI fell to 48.9 in September from 51.0 in August, representing the first contraction since February.

The European Central Bank (ECB) responded by cutting its Deposit Rate to 3.50%, acknowledging moderating inflationary pressures while maintaining a data-dependent approach for future decisions. The ECB revised its GDP growth forecasts downward, projecting growth of 0.8% for 2024 and 1.3% for 2025, while slightly increasing core inflation expectations.

In the U.K., July's GDP figures indicated stagnation, with declines in both industrial and manufacturing production. Wage growth also slowed, which may pave the way for future Bank of England rate cuts, although current wage growth levels remain elevated. The U.K. economy recorded its second consecutive month of 0.0% growth in July. Industrial production surprised on the downside, falling 0.8%, while manufacturing production dropped 1.0%, nearly reversing June's gains.

The September PMIs in the U.K. also showed a decline, signalling a more orderly moderation in economic activity. The manufacturing PMI decreased to 51.5, and the services PMI fell to 52.8, remaining in expansion territory for the 11th consecutive month. While new orders and business components saw only slight declines, price trends were mixed, with service providers' prices softening and manufacturers' prices rising. This suggests a continued gradual approach to rate cuts by the Bank of England.

Global stock markets saw gains in September, with the MSCI World Index up 1.7%, the S&P 500 rising by 2.3%, and the Nasdaq increasing 2.7%. In the U.K., the FTSE 100 fell by 1.7% while smaller companies struggled with the AIM All-Share Index down by 4.2%, the Fledgling index down by 5.0% and the Small Cap Index down slightly, by 0.04%, Our portfolio declined by 0.5% during the month and after accounting for expenses and paying our interim dividend of 2.3p per share, the NAV decreased by 1.9%. Key contributors to performance included AEW, Gama, Rightmove and Games Workshop. We sold our position in XP Power and increased our holding in Alpha Group during the month with cash comprising 1.3% at month end.

Fact Sheet

An accompanying fact sheet which includes the information above as well as wider details on the portfolio can be found on the Fund's website www.athelneytrust.co.uk under "About" then select "Latest Monthly Fact Sheet".

Background Information

Dr. Emmanuel (Manny) Pohl AM

Manny is Chairman and Chief Investment Officer of E C Pohl & Co ("ECP"), an investment management company and has been a major shareholder in Athelney trust for many years.

E C Pohl & co is licensed by the Australian Financial services (license no.421704).

www.ecpohl.com

www.ecpam.com

Manny Pohl and the ECP group has AUD2.7bn (£1.5 billion) under its management including four listed investment companies, three listed in Australia and one in the UK:

·    Flagship Investments (ASX code:FSI)

AUD95m https://flagshipinvestments.com.au

·    Barrack St Investments (ASX code: BST)

AUD37m www.barrackst.com

·    Global Masters Fund Limited (ASX code: GFL)

AUD33m www.globalmastersfund.com.au

·    Athelney Trust plc (LSE code: ATY)

GBP6m www.athelneytrust.co.uk           

Athelney Trust plc Investment Policy

 The investment objective of the Trust is to provide shareholders with prospects of long-term capital growth with the risks inherent in small cap investment minimised through a spread of holdings in quality small cap companies that operate in various industries and sectors. The Fund Manager also considers that it is important to maintain a progressive dividend record.

The assets of the Trust are allocated predominantly to companies with either a full listing on the London Stock Exchange or a trading facility on AIM or ISDX. The assets of the Trust have been allocated in two main ways: first, to the shares of those companies which have grown steadily over the years in terms of profits and dividends but, despite this progress, the market rating is favourable when compared to future earnings and dividends; second, to those companies whose shares are standing at a favourable level compared with the value of land, buildings or cash in the balance sheet.

Athelney Trust was founded in 1994. In 1996 it was one of the ten pioneer members of the Alternative Investment Market ("AIM"). In 2008 the shares became fully listed on the main market of the London Stock Exchange. Athelney Trust has a successful progressive dividend growth record and the dividend has grown every year since 2004. According to the Association of Investment Companies (AIC) Athelney Trust is a "Dividend Hero" being one of only a few investment companies that have increased their dividend every year for 20 years or more. See link

https://www.theaic.co.uk/income-finder/dividend-heroes

Website

www.athelneytrust.co.uk