The Fund’s NAV was little changed in October, the strategy recorded a loss of 0.06% (C Accumulation GBP). For a consecutive month, the strategy had to navigate broader volatility across UK capital markets. Domestic equity markets fell sharply in the early stages of the month and government bond yields remained elevated as concerns over the UK’s fiscal position alongside ongoing geopolitical tensions provided the catalysts. However, equities firmed markedly in the second half of the month, aided by better-than-expected growth data, while gilt yields trended lower in the build-up and aftermath of the autumn budget which ultimately served to calm bond markets.

John Healey’s maiden budget as Chancellor included several measures relevant to the infrastructure sector including the establishment of an Energy Wealth Fund (within the National Wealth Fund) that will recycle government revenues from North Sea oil and gas into renewables and low-carbon energy infrastructure, and the potential for Public Private Partnerships to be used in the context of defence initiatives. Perhaps most immediately relevant to the Fund was the publication of a consultation on wholesale contracts for difference as a mechanism to fix wholesale revenues of some renewable energy generators (note biomass has been excluded) – the objective being a delinking of electricity prices from gas prices. Any take - up of WCfDs would be voluntary and would have to be sufficiently attractive to encourage generators to adopt them.

The portfolio’s utilities equities delivered mixed performance during the month. National Grid was the greatest positive contributor and recorded a 9.5% total return in October, trailed by United Utilities (+8.6%) and SSE (+5.5%). Pennon Group (-16.2%) was the greatest detractor from performance after the water utility announced a £5 50m discounted rights issue to support improvements to operational performance and provide investment into additional growth opportunities throughout the current AMP8 regulatory period (ending in 2030). The Fund exercised a portion of its rights, acquiring additional Pennon stock at 250p per share.

The position in United Utilities was reduced by approximately one third, trading into strong positive share price momentum and bringing the exposure back towards 2% of the portfolio by weight. The company has performed incredibly well for the Fund, recording a total return of 56.8% since the start of 2025 including a recent ‘break-out’ in the shares that saw an 8.6% return in October alone. The Manager continues to take an active approach to managing equity beta within the Fund, seeking to prudently lock - in profits following a period of strong positive returns, and commensurate yield narrowing, for some of the traditional equities to which it is exposed. A position in Living REIT, received as part of the ongoing wind-down of Residential Secure Income REIT, was sold and the Fund retains no ongoing exposure to the company.