Fund Objective

The Funds aim is to achieve total return.

View on Past Performance

UK equities started to rebound at the beginning of the second quarter, following a difficult first three months of the year, as the Bank of England injected some liquidity back into the lending markets and cut interest rates by a quarter of a percent.Large cap stocks recorded their best monthly performance in five years, but much of the gains were from the heavyweight oil and mining sectors as bid rumours resurfaced and crude oil continued to surge to record highs. However, the rise in equities was short lived.The rally stalled in mid-May as the oil price continued to surge, driving inflation well above expectations, and shares fell on the back of weakening economic data as demand expectations continued to soften.The portfolio outperformed the benchmark over the quarter, with positive contributions from both sector positioning and strong stock selection. The main positive contributors at the stock level came from a number of the portfolio's larger, well established positions in the oil & gas sector which benefited from the rising oil price, and also from favoured holdings in the mining sector.The portfolio benefited from good stock selection within the banking sector, by avoiding the more domestically focused banks in favour of those with more global exposure. At the sector level there were strong positive relative contributions from underweight positions in propertyrelated sectors, including real estate and housebuilders.

Future Expectations

Looking specifically at the next six months, we feel the market could struggle to make much progress given the ongoing oil price pressure.However, we believe this difficult environment has been fully reflected in share prices in a number of sectors and are looking to add to our positions where we see value and a strong balance sheet.

Fund Details