Fund Objective

To achieve maximum overall growth of income and capital in the medium to long term, while aiming to achieve a yield above that of the FTSE All Share Index.

View on Past Performance

The Fund made additions to a number of its existing equity holdings. October was characterised by sharp fluctuations in all equity, bond, currency and commodity markets. Increased evidence emerged across the world of slowing levels of economic activity, and stress arising from the fallout of the credit crisis. The IMF was called in to provide support and advice to Hungary, Iceland, The Ukraine and Pakistan.The US Federal Reserve also provided extensive lines of dollars to a number of countries. Interest rates were reduced in the USA and UK. Expectations are high for a further reduction in short term interest rates. The UK Government announced plans to inject £37bn of additional capital into the UK banks through the issue of ordinary and preference shares. Towards the month end Barclays Bank announced a £7bn funding package and Centrica launched a £2.2bn rights issue.The month was also characterised by companies cutting dividends or downgrading expectations for future payments. During October, the FTSE All share Index returned -11.9%. The FTSE 100 returned -10.5%, outpacing both the FTSE 250 and FTSE Small Cap indices which each fell approximately 20%. The best performing sectors were Oil & Gas and Healthcare. The Bank, Life Insurance and Mining sectors were among the weakest sectors, reflecting the global macro trends.The Funds overweight position in both BP and GlaxoSmithkline added positively to performance.

Future Expectations

Within the equity portfolio, our approach remains to look for opportunities to buy into strong companies at attractive valuations, particularly in situations where we perceive short term market sentiment to be overly pessimistic.

Fund Details