Fund Objective

To provide long-term capital growth.The Fund is aimed at globally diversified investors willing to accept the higher risk of investing in small US companies to benefit from higher long-term growth potential.

View on Past Performance

The anniversary of the credit crisis ushered in a period of heightened panic and volatility as markets for short term funding came to a virtual standstill. The fund underperformed its benchmark due to weak stock selection in the materials & processing and technology sectors.Among the holdings that disappointed during the period was Cabot Oil & Gas. The independent natural gas producer was hurt by falling commodities prices despite reporting a 32% increase in second-quarter net income. Another detractor was Century Aluminum, a producer of aluminium. Its share price declined as aluminium prices retreated.Among the portfolio holdings to enjoy strong returns was Thoratec, a medical device maker. The company reported better than expected second-quarter results, driven by robust sales at its cardiovascular division, and raised its fiscal 2008 outlook.Another top contributor was home health care provider Gentiva Health Services. The company's second-quarter net income rose to 32% from the same period a year earlier.

Future Expectations

We view the proactive steps taken by American authorities as beneficial for US assets relative to the rest of the world. As the recovery in the US dollar may be suggesting, the focus may begin to shift to pressure on policymakers elsewhere (most notably in Europe) to take a more holistic approach to their domestic problems, rather than responding to bank failures on a piecemeal basis.

Fund Details