Fund Objective

The Fund aims to achieve capital growth.

View on Past Performance

Smaller caps fell sharply in September but outperformed their larger counterparts. The crisis in the banking system had a severe effect on investor confidence.Sector allocation had a positive impact, due to our zero weighting in materials and an overweight position in consumer staples. Contributors at the stock level included bakery products maker Flowers Foods and healthcare and toiletries supplier Chattem. However, the business software and services provider HIS and telecom stock SBA Communications proved less positive.We are overweight in consumer staples and underweight in materials, financials and consumer discretionary stocks. We bought stock in the reinsurance firm Everest Re, which is well capitalised and offers good value, and the life-science company Millipore, which is cutting costs. We sold railroad operator Kansas City Southern, which had outperformed, and financial services firm Synovus Financial.

Future Expectations

We remain cautious about the market's prospects in the near term. We are now focused on the impact that the problems in financial markets will have on economic growth and unemployment and are less concerned about inflation, which may already have peaked.

Fund Details