Dear reader,
June may have marked the first real crack in the market’s two-year obsession with mega-cap US tech. After a monster run, the AI trade wobbled. The Nasdaq fell 2.8% on the month, and the giants led it down. Microsoft lost 17%, its worst month since 2000, and Oracle fell 35%, both hammered as investors finally questioned whether the AI spending boom justified the price. But the money did not leave the market. It rotated. Out of expensive tech and into the unglamorous stuff, the financials, the healthcare names, the value end where the dividends live. For us investors, that is a very welcome change of scenery
“June was a much better month for active managers”
— Steven DeSanctis, Jefferies
Closer to home, the UK ran its own two-speed version of the same story. The FTSE 100 ground up to near 10,500, up roughly 19% for the year on the back of its globally-earning heavyweights. The domestic FTSE 250 went the other way, weighed down by miners, housebuilders and a British American Tobacco restructuring.
For an income portfolio, though, one number matters more than any other, and that is the Bank of England base rate. On 18 June the Monetary Policy Committee voted 7-2 to hold at 3.75%. No shock there. The shock was the direction of the dissent. The two members who broke ranks did not vote to cut. They voted to raise, to 4%. Rewind twelve months and the whole conversation was about how fast the Bank would cut through 2026. We have somehow arrived at a meeting where the live argument was whether to hike, with inflation proving stickier than anyone wanted at 2.8%. The good news is the worst case faded. The US-Iran ceasefire held, oil drifted back down, and the energy spike that had briefly spooked markets into pricing hikes lost its heat. The honest base case now is boring: rates on hold, quite possibly deep into 2027. The next decision lands on 30 July.
And through all of it, the portfolio did what it is built to do. While the headlines argued about AI valuations and Middle East ceasefires, the holdings quietly got on with paying us. Better still, this was a month when the market was finally moving towards the portfolio rather than away from it. More on exactly which names below.
June research highlights
Alongside the portfolio update, June was a busy month for research on Corfe Capital. Here’s everything published this month, well worth a read if any slipped past you:
🍬 Tate & Lyle PLC (LON: TATE) — 9 June
📉 WHSmith & Halma (LON: SMWH & LON: HLMA) — 13 June
🔍 B&M (LON: BME): Is 193p cheap, fair, or a trap? — 16 June
⚡ SDCL (LON: SEIT): Just crashed 19%. Here’s why. — 16 June
🏗️ Hargreaves Services plc (LON: HSP) — 24 June
Sector Commentary
Property & Healthcare REITs (24% of portfolio) was the standout, and it is now the largest sleeve in the book. As money moved back towards value, UK commercial property was one of the first places it went, and the portfolio’s property names responded in kind. Healthcare property in particular still offers that rare combination of inflation-linked income and genuine structural demand. After a long stretch of the market treating anything with the word property attached as radioactive, June felt like the start of a thaw.
Infrastructure & Credit (23% of portfolio) had a steady month and remains the backbone of the portfolio. This is the asset class that earns its large allocation for a reason. Resilient, contracted, inflation-linked income that keeps arriving whatever the headlines are doing. The Bank of England is now expected to sit on its hands well into 2027, so the re-rating this sector deserves is taking its time. The income does not wait for sentiment to turn.
Other / Diversified (15% of portfolio) was a tale of the best and the worst in the book. One high-quality industrial name enjoyed a standout month as capital moved back towards quality. A beaten-down retailer staged a sharp recovery on results. Set against that, a long-standing commodity laggard continued to disappoint, still paying nothing and still under review. The rest, a mix of consumer and housing-related names, sat quietly, patient positions waiting on an eventual UK recovery.
Technology (13% of portfolio) had a good month, which given the carnage in technology stocks globally deserves a word of explanation. The portfolio’s technology exposure is a world away from the expensive US names that wobbled in June. These are UK-listed, sensibly valued businesses. The kind of quality mid-cap that benefits when investors go looking for value, not hype.
Renewable Energy (12% of portfolio) was quieter after its recent recovery. This remains the portfolio’s most rate-sensitive sector, and the one most geared to any eventual shift in the Bank of England’s stance. A high-profile blow-up elsewhere in the sector this month, a 19% crash and a dividend cut to zero at a name the portfolio does not hold, was a timely reminder of the strategy here. Real assets and covered payouts, not the highest yield on the screen. If rates do begin to fall in the second half of 2026, this sector still has meaningful re-rating potential.
Investment Trusts — Global & Regional Income (10% of portfolio) was the one soft spot, giving back a little after a strong recent run. The high single-digit yields keep landing quarterly regardless. The sleeve still earns its place, providing useful diversification away from an increasingly two-speed domestic UK picture.
Financial Services (2% of portfolio) is a small sleeve, but it had a strong month, exactly as you would expect when capital turns towards value. Asset managers in particular found some relief as the pressure from fund outflows eased. When the market moves in this direction, this is the sort of sleeve that benefits first.
The full portfolio breakdown, all holdings, weightings, dividend income, and my thinking on what I’m watching for July, is available to paid subscribers below. If you’re not yet a member, now’s a good time.
