Fund Objective

To achieve long term capital growth with increasing income from distributions.

View on Past Performance

The effects of the Credit Crunch, with the shortage of liquidity, particularly in the bank sector, has resulted in a more significant economic downturn than would normally occur when Central Banks tighten credit to reduce inflationary pressures. Effectively, the interbank lending rates are around 75 basis points above base rates, which has made it far more difficult for monetary policy to be applied.In addition, commodity prices had moved to all time highs, which increased the inflationary effect, predominantly, in the Western economies. The double whammy has led to uncertainty, together with volatility in the major world stock markets, and despite earnings returns, yields, together with cash to book values now being at historically undervalued positions, especially when compared to bonds, it is likely that the down trend will continue as recessionary fears dominate sentiment.The fund manager built up cash positions prior to the credit crunch and is now taking advantage of current volatility to switch emphasis to a blend of equity earnings growth / income in the value sector.

Fund Details