Monetary policy decisions and weak economic data out of China dominated market commentary over the month. Both the ECB and Japanese Finance Ministry disappointed the market by not significantly expanding QE, whereas the US Fed met carefully managed expectations with its first rate increase in almost 10 years. Economic data on the whole disappointed, especially in China with both imports and exports falling yet again. US data was also weak with industrial production and manufacturing PMI below expectations (resulting from a weaker energy sector and the strong dollar), though housing starts and consumer sentiment were better. The weak economic data combined with the failure of the OPEC cartel to agree an effective oil quota limit sent the spot price down 14% over the month. The energy sector led equities lower with the sector losing 9.5%, followed by Materials (-4.0%) and Industrials (-2.5%). Utilities (+1.6%), Health (+1.6%) and Consumer Staples (+1.0%) bucked the negative trend.

The Portfolio declined by 2.7%, underperforming global equities by 0.9%.

The top five positive contributors were Celgene (+9.4%), Apple (not held -11.0%), Ezion Holdings (+4.5%), Express Scripts (+2.3%) and NN Group (+3.6%).

Celgene benefitted from the resolution of a patent litigation dispute with Ezion recovering modestly from previous weakness. Express Scripts and NN Group continue to perform well as their respective investment theses play out.

The five largest detractors from performance were Cobalt International (-26.7%), Viacom (-16.5%), Anadarko Petroleum (-18.5%), ENI (-8.0%) and Petroleum GEO Services (-12.6%).
Our energy holdings (excluding Ezion above) were hit by the declining price of oil as the last OPEC meeting concluded with no output target agreed. Viacom continued to create negative headlines as the health and mental capacity of its nonagenarian Chairman is disputed in court.

During the month we sold out of Canadian Oil Sands miner Cenovus given relative strength, and redeployed across three other energy holdings ....Ezion, Cobalt and Anadarko. We also sold out of a small position in Chinese specialty steel Tiangong, redistributing into Singapore realtor Cambridge Industrial. We top sliced Microsoft and NN Group and added to Western Digital and Viacom.