Fund Objective

To achieve a total return.

View on Past Performance

During the period under review the offer price of accumulation units rose by 4.85% from 48.27p to 51.66p. In view of the nature of the Trust and its investment remit there is no directly comparable market index. Global equity markets made good progress over the reporting period, including the UK, where the FTSE All-Share Index achieved a total return of 15.30%. The mining stocks performed particularly well over the first half of the reporting period as the economic recovery fuelled demand for raw materials, and capacity constraints meant that this fed through to higher prices. During the review period the Trust's underlying funds have re-positioned their portfolios to benefit from changing market conditions.

Future Expectations

Looking ahead, we are more guarded on the prospects for government bond markets and higher quality corporate bonds, as the outlook for inflation and interest rates has become less benign. Moreover, the high oil price presents a further concern. However, we believe that inflation will remain low by historical standards, obviating the need for any sharp rise in interest rates, and this should limit the downside for bonds. Within the bond markets, we continue to prefer the outlook for high yield issues. Equity markets should benefit from the ongoing recovery in world economies and the improved prospects for company earnings. The UK economy remains robust and while the rise in interest rates could slow consumer spending, the economic impact should be mitigated by the growth in corporate expenditure.

Fund Details