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After a period of strong gains, the Good Governance Certificate gave back 3.2% in June. With oil and gas stocks excluded from our long basket on ESG grounds, the sharp recovery in these stocks (up 23% since the start of May) weighed on the overall performance. However, this underperformance is to be expected, given the ESG exclusions, when, for example, the oil price rises sharply. This leaves the Certificate up 2.6% in the first half of the year, and up 8.2% since inception.
Looking at the underlying equities, Tech stocks such as Microsoft, Nvidia and Apple performed well, whilst Merck was the best performer on the month. On the counter side, HP was hit again, as the end of Covid restrictions reduces PC and printer sales, whilst Snap On gave back some of the 35% gain for the year to the end of May.