Fund Objective

To achieve long term capital growth in excess of the performance achieved by the FTSE World Index(ex- UK) by investment in overseas investment markets.

View on Past Performance

As is becoming increasingly common, July was a very mixed month for world equity markets. Although finishing broadly flat (FTSE World -0.2%), the markets fell around 3% mid month before recovering sharply on gathering evidence of a slowing US economy coupled with a sound earnings reporting season.Another encouraging aspect of July was Ben Bernanke's newfound ability to speak Fedese, a language peculiar to US central bankers that enables them to speak at great length while providing no information.This rapid move to the traditional communication method of central bank communication marks a welcome end of Bernanke's ill-fated doctrine of clear communication and has been warmly welcomed by markets.

Future Expectations

Frustratingly, July was another difficult month for your fund that saw it under-perform the benchmark index by 0.8%. Despite adding value through asset allocation, your portfolio was let down by poor fund selection, particularly in the US and Japan. Much of this can be traced to underperformance by Legg Mason US equity and its stable-mate in Japan Legg Mason Japan Equity.While subject to radically different drivers, both have struggled this year despite being managed by experienced investors with excellent track records. While we continue to keep these holdings under close review,we expect the quality of the management to show through in the latter part of the year and are therefore reluctant to sell these positions at present.

Fund Details