Fund Objective

The aim of the American Growth Fund is to achieve capital growth from investment in stocks and shares of issues located or operating in the United States of American and Canada. Income is not a consideration.

View on Past Performance

After a short-lived correction in February, the markets have continued their upward trend. Fuelled by better than expected earnings, excess liquidity, and merger and acquisition activity, the market continues to climb the wall of worry. History has shown us that excess global liquidity fuels the demand for financial assets and produces a positive backdrop for equities.During the quarter, the portfolio outperformed its benchmark, as our positions in financial, industrials, and technology companies drove performance, while our exposure to consumer discretionary hurt the portfolio's relative returns.Historically under this scenario, the "mid-cycle slowdown" was followed by years of growth as experienced in the mid-1980's and mid-1990's. Given the backdrop of relatively low interest rates, decent profit growth, increased merger and acquisition activity, and reasonable valuations, we see more opportunities than risks currently in the marketplace.

Future Expectations

We continue to believe that we are in the early stages of a rotation into higher-capitalisation growth companies and have positioned the portfolio appropriately. We also believe in 2007,given the falling dollar, international revenues will prove to be a strong tail wind for large global companies.We continue to see opportunity for capital appreciation in many companies fueled by robust margin expansion coupled with productivity gains, strong operating profit growth, and healthy balance sheets.Overall, we believe we are in the midst of a "mid-cycle" slowdown - a period of slowing growth with a moderation of inflation.

Fund Details