Fund Objective

This Fund aims to provide a monthly income rising over time together with capital growth by investing predominantly in a combination of UK equities and fixed income securities. The Authorised Corporate Director may also invest at its discretion in other transferable securities, money market instruments, deposits, cash and near cash and collective investment schemes.

View on Past Performance

September was by any standards an atrocious month for equities as they plummeted 13%. Corporate bonds didn't fare much better, falling by 7%: only gilts managed to keep their head above water, returning 0.1%. Fears over the solvency of financial institutions dominated the investing landscape in September, as Lehman Bros became the highest profile casualty of the financial crisis. Nonlife Insurance was the best performing sector in September, whilst Industrial Metals remained the worst performing sector.The portfolio holds stocks that are considered good value and have a strong earnings outlook. The portfolio has extended its underweight position in gilts and maintains its overweight position in good quality credits. An overweight position in Amlin PLC contributed +0.13 % to performance. An underweight position in British Airways PLC contributed +0.05% to performance.

Future Expectations

We expect economic growth to continue its trend downward as the credit crisis persists. We have brought forward our expectation of rate cuts as inflation slows due to the fall in commodity prices. The current conditions would normally provide a negative backdrop for equities and corporate bonds, and a positive one for government bonds.However we feel the market has oversold and we will take short term tactical long positions in equities and quality corporate bonds in order to take advantage of the prevailing conditions.

Fund Details