Fund Objective

The Fund seeks to maximise the total return.

View on Past Performance

The month of May saw further weakening of global economic growth. The month was also characterised by various banks raising capital coupled with ongoing hits to profits from write-offs arising from subprime exposure.Despite these negative developments the market rose by just over 1.5%.The fund was positively impacted by its high weighting in Oil stocks and by being underweight in Banks. Within the banking sector no holding in Credit Agricole, UBS and Societe Generale helped performance as they all are under performed due to planned capital raising. Despite the Banking sector having a high dividend yield, in some cases, the cash dividend is at risk and thus I continue to be very selective in stock picking.Throughout the month the yield on the fund was raised and is now 4% vs. a market average of approximately 3.5%. This was achieved by adding a number of stocks with high secure dividend yield. For example, Sampo was added to the portfolio and the existing holding in Vivendi was raised.

Future Expectations

The outlook for the growth of corporate profits is difficult with the headwinds of a strong Euro currency, growing wage inflation and falling top line growth.I feel this will squeeze corporate margins and that market forecasts remain too optimistic.

Fund Details