30/09/2003. Equity markets have rallied strongly since March and the Fund has appreciated by 13.3%. However, it has lagged the APCIMS Growth Index which rose 15.7%. The cash and bond weighting has been a drag on performance, though it has generated a significant part of the income. Secondly, we have not had enough exposure to cyclical stocks which have performed strongest.Although we have had a decent exposure to smaller and mid-size companies which have performed better than the market average, the Fund has tended to concentrate on cash-generative, stable companies with good dividend prospects. These types of shares have served the Fund well since August 2001 when the new benchmark was adopted and the Fund (-10.1%) is still ahead of the index (-12.8%) over that time period.
Recent economic statistics indicate that economics are beginning to recover. We have already titled the exposure towards Japan, Asia and Emerging Markets which we think have better prospects than the US and Europe.