The Fund experienced a difficult month and delivered negative performance primarily due to the negative impact of the US securitised sector where technical pressures, along with continuing negative headline news caused these securities to perform poorly. The US securitised sector in general is still under significant pressure and liquidity is low compared to historic norms.During the month near flat interest rates positively influenced the Fund through our duration strategy. Spread management was negatively impacted by wider spreads over the month. Despite the ongoing deterioration in the US housing market and disappointing GDP figures, investors interpreted communications from policy makers as signalling a period of unchanged rates.At the end of the month, we held a positive overall duration exposure. Negative allocation can be found in the US. We hold a positive duration allocation in Euroland, Japan and local emerging markets.Currency management was a positive contributor to performance. Towards the end of the month we closed our short CHF position as the Swiss currency weakened with the resurgence in risk appetite, taking advantage of the strength in the USD to establish a short position in anticipation of predefined range holding.
