Fund Objective

To provide long-term capital growth.The Fund aims to invest in the best value and growth small-cap companies in the UK.

View on Past Performance

The UK stock market, along with global markets, ended the quarter lower. The period was dominated by worries about rising inflation, risks of weaker growth, volatile commodity prices, falling house prices and ongoing financial market turmoil.The fund outperformed its benchmark as positive stock selection in the general retailers and software sectors outweighed the negative contributions from stock selection in the oil & gas producers sector and an overweight position in the oil equipment, services & distribution sector. At the stock level, the fund benefited most from an overweight position in software consultant Axon Group, which received rival takeover offers from India's HCL Technologies and Infosys Technologies.An overweight position in Micro Focus was also positive after the business software maker's fiscal first quarter profits and revenue met its forecasts. The most significant detractor in relative terms was an underweight position in drugmaker Acambis, which was acquired by France's Sanofi Aventis for GBP 276m.An overweight position in JKX Oil & Gas was also detrimental as the oil exploration company was hit by slowing global growth and falling oil prices despite reporting strong earnings. However, relative returns were boosted by an underweight position in JJB Sports, which slumped after reporting a first-half loss, cancelling its dividend and cutting its full-year profit forecast.

Future Expectations

UK equities are at historically attractive levels, but concerns over global growth and ongoing weakness in the financial sector may lead to further volatility.

Fund Details