Law Debenture Corporation plc (LON:LWDB) has announced its monthly factsheet for June 2026.
Fund Managers’ Comments
In June the Trust’s net asset value fell 1.0% (with debt at fair value), underperforming the FTSE All-Share which rose 0.7%.
Equity markets more broadly continued to be buoyed by hopes of a ceasefire in the Middle East, which in June led to a material fall in the oil price to near pre-conflict levels.
At the portfolio level the underperformance was predominantly due to a partial reversal in shares that had performed very well calendar year to date, including fuel cell developer Ceres Power and electrolyser producer ITM Power. This was likely driven by a pullback in technology shares elsewhere (for example the NASDAQ index fell during June) as well as a c£100mn equity raise by Ceres Power in order to invest alongside their manufacturing partners. We had been taking profits in Ceres, ITM and Infineon Technologies into recent strength for portfolio balance reasons. Elsewhere the holding in retailer Halfords performed well, as it reported sales growth from both its retail and garage divisions, and managed to modestly grow profits in an environment of steep operating cost inflation.
During the month we added to the holding in defence supplier Babcock. Defence had been an area that we were reducing last year, as Babcock at points had reached over 20x earnings, a level which in our view already reflected a higher defence spending backdrop. It has since de-rated to a mid-teens earnings multiple, as it is predominantly exposed to UK defence spending where the Defence Investment Plan has been repeatedly delayed. Following the de-rating, we are adding to the holding as we continue to view Babcock as well placed to benefit from growing defence spending in NATO countries. The position in speciality food ingredients supplier Tate & Lyle was sold following an agreed takeover offer by peer Ingredion.
James Henderson and Laura Foll
Janus Henderson
Law Debenture Corporation plc (LON:LWDB) provides a wider range of services including corporate and pension trusts, process agent services, treasury management, corporate services including for special purpose vehicles, structured finance administration and whistleblowing services.
