Fund Objective

To achieve capital growth.

View on Past Performance

Global equity markets endured an exceptionally turbulent month, as turmoil in the US and UK banking industries reverberated around the globe. Stocks crashed after the House of Representatives rejected a rescue plan in the US; however markets rebounded sharply on the last day of the month amid feverish speculation that the deal would be salvaged. The MSCI World index lost 9.8% in sterling, total return terms.The Fund lagged its cash benchmark over the month, but outperformed its peer group. Our corporate bond exposure hurt performance, in particular our exposure to AIG, as the entire financial system came under intense pressure. The nature of the Federal Reserve's bailout of the world's largest insurer has led to deep uncertainty about the prospects for AIG's creditors. The BlackRock Global Capital Securities fund also ended lower.Among the positive contributors to returns was the Fund's Asian currency exposure as the Japanese yen strengthened. Our US equity hedging instruments also helped returns, cushioning the impact of falling equity markets.In terms of activity, we scaled back our exposure to natural gas during the month. We also increased our exposure to Asian equities, topping up the JPMorgan Asia fund and Aberdeen International Asia Pacific Fund.

Future Expectations

However, we remain comfortable with our financial credit exposure, given that banks have already begun to repair their balance sheets, with concerted global governmental support. The asset class will also be less hampered byeconomic headwinds which may continue to act as a drag on equities, property and commodities.

Fund Details