Fund Objective

The aim of the Fund is to achieve a total return, primarily by way of income, with some capital growth.

View on Past Performance

September was a tumultuous time for the global financial system and markets. The credit crisis returned to centre stage, with risk averse investors turning to government debt at the expense of corporate bonds.The fund ended the month lower but outperformed the benchmark, benefiting from its extensively diversified portfolio of holdings. After recent market declines valuations look compellingly attractive, but at the moment the market is sentiment-driven and hampered by a severe lack of liquidity, although policy makers are taking bold steps to address the situation.In light of the extreme risk aversion affecting the market, we increased our weighting in longer duration US treasuries.

Future Expectations

Looking ahead, corporate write-downs are likely to continue as the impact of the financial crisis on the global economy spreads. On a brighter note, big declines in food and oil prices should begin to result in slowing inflation at some point.Central banks have taken co-ordinated steps to cut interest rates, which should ultimately benefit corporate bonds. We are now overweight in non-government bonds, with valuations at levels not seen in decades.

Fund Details