Fund Objective

To achieve long term capital growth.

View on Past Performance

The UK stock market fell heavily in June with the FTSE Small Cap Index underperforming the FTSE All Share Index but outperforming the FTSE Mid 250 Index. The credit crunch is having an increasing impact on house prices and housing transaction levels. Inflation accelerated sharply in June on increasing fuel and food costs, effectively ruling out any further rate cuts and raising the prospect of an increase in rates. Fund performance was helped by MDM Engineering, Pure Circle and ValiantPetroleum. Fund performance was hurt by exposure to Kier which reacted negatively to the continuing weakness in the housing sector and Stanley Gibbons which sold off in sympathy with the retail sector. Purchases included REA Holdings and Platinum Australia. We also increased our exposure to energy markets with the purchase of Rurelec. The fund sold Nighthawk and Jelf, and took profits in MDM Engineering and OPG Power Ventures. We also sold Baltic Oil, Interbulk, RCG, and GMAResources.

Future Expectations

The market is showing sharp differentiation between sectors and strategy remains key to performance this year.

Fund Details