Fund Objective

To provide a total return by investing in a portfolio of predominantly bonds.

View on Past Performance

For the third month in succession, corporate bonds underperformed gilts. Financials performed particularly poorly in the wake of the continuing deterioration in the mortgage market. Cyclical consumer sectors such as clothing also struggled. The Fund continued to sell fully-priced financial sector bonds to make room for attractively-priced new issues. The manager reduced holdings of expensive utilities at the long end of the market.Purchases included a TNT 10 year sterling issue yielding 270 basis points over gilts. The Fund returned marginally ahead of its benchmark during August. Holdings in long dated UK government bonds benefited the Fund, as did the Funds overweight position in the securitized sector. While holdings in Northern Rock and Taylor Woodrow rallied, Enterprise Inns, a reasonably sized holding within the portfolio retreated as market sentiment took a turn for the worse.

Fund Details