Fund Objective

To achieve maximum capital growth mainly through investment in ordinary shares and/or fixed interest securities in Europe.

View on Past Performance

Directionless markets saw the majority of performance in August delivered by weakness in sterling versus euro. The continued decline in commodity prices also had a positive effect as it tempers inflation expectations and eases the margin squeeze that many companies had been suffering. The fund returned 3.9% which was comfortably ahead of its sector average. The key to outperformance was strong returns from a few smaller or off-index companies such as Draka, Arysta and Parmalat.

Future Expectations

After a relatively uneventful Q2 reporting season, valuations remain attractive and dividend yields for 2008 and 2009 exceed 4%. With this in mind we think that markets can continue to drift up for a few more weeks. Thereafter, greater clarity on the length and depth of the global macroeconomic slowdown and tempering of high expectations for earnings growth in 2009 will make further market upside difficult. The fund continues to reflect a strategy of identifying undervalued growth.

Fund Details