The fund's investment objective is to give a balanced exposure to UK and overseas equities and fixed income securities through a range of underlying authorised unit trusts, recognised schemes and collective investment schemes. The proportionate percentage to be invested in each underlying scheme will be decided by the investment adviser in light of current economic and other circumstances and may include a proportion in cash. Efficient portfolio management techniques will be utilised when considered appropriate.
It has been a challenging environment for global markets in general over the past few months. The combination of mounting inflationary pressures and weak economic growth re-injected uncertainty into the markets. As volatility picked up, virtually all asset classes came under pressure with the exception of a narrow band of stocks, including energy and mining companies.Financials were dragged lower by continuing credit problems and even gilts (usually seen as a safe haven) sold off as investors began to focus on the prospect of rising inflation. During the first half of the period, stocks posted strong gains and the fund outperformed. However, mid-May, the prospect of spiralling inflation dampened investor confidence and markets experienced a sharp sell-off across asset classes, leaving the fund slightly trailing the broader market.Some of the underlying funds lagged their respective benchmarks during the increased volatility offsetting positive asset allocation from our overweight positions in Asia and emerging market equities. The combination of high oil prices and deteriorating economic growth has created a very difficult backdrop for most asset classes. Given this environment we have adopted a more cautious investment strategy.We have shifted our bias towards larger companies, which we think are likely to outperform smaller and mid-sized companies as the economy slows. We have increased our international equity exposure, particularly in Asian and emerging markets as we remain impressed by the growth and dynamism of these regions.Whilst we remain underweight in bonds, we have switched all our gilt exposure into high yield bond funds as we believe the indiscriminate market sell-off has presented some attractive opportunities to invest in companies with sustainable profits offering high yields at attractive prices.
213.20p
