Fund Objective

To provide long term capital growth.

View on Past Performance

The UK stock market, along with global markets, ended the quarter lower, hurt by worries about rising inflation, weaker growth, volatile commodity prices, falling house prices and financial market turmoil.The fund underperformed its benchmark. Detractors included an overweight position in the mining sector and stock selection and an underweight position in the food & drug retailers sector. An overweight position in the nonlife insurance sector and stock selection and an overweight position in the pharmaceuticals sector were beneficial.At the stock level, one of the strongest positive contributors was an overweight position in drugmaker Astrazeneca, which received broker upgrades on its short-term earnings and pipeline momentum. An overweight position in British American Tobacco was also beneficial after the cigarette maker reported an increase in second-quarter profit as smokers in emerging markets switched to its premium brands.The most significant detractor was an overweight position in copper producer Kazakhmys, which reported first-half profit that fell short of analysts' expectations as cold weather and repairs restricted output. An underweight position in Tesco was also detrimental in relative terms after the supermarket company's first-half profits beat analysts' estimates as price cuts boosted same-store sales.However, the fund was lifted by an overweight position in Amlin, which rose on expectations it may be able to increase the rates it charges for its underwriting services following the effective nationalisation of US insurance company AIG.

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