Fund Objective

To provide an above average and subsequently increasing level of income with the potential for some capital growth.

View on Past Performance

During March, the unit bid price of the Marlborough Cautious Fund declined by 3.15%, against the Morningstar Cautious Managed Sector average fall of 1.75%.March saw a resumption of the decline in equity markets, on this occasion however, markets became so technically oversold that it is likely that they formed a more durable bottom. Of the main markets, Europe led with an increase of 1.63% (FTSE World Europe ex-UK). All other main markets ended the month down, the US (S&P 500 Composite Index) ended down 0.38%.This was followed by the UK, Japan and Far East, with the FTSE 100, Nikkei 225, and FTSE Pacific ex- Japan indices down 3.10%, 3.61% and 3.84% respectively. Finally the MSCI Emerging Markets Index closed the month down 4.13%. Of the BRIC economies, only the Russian Trading System closed the month up, with a return of 2.06%.High Yield bonds finally began to bounce when spreads reached levels where they offered compelling valuations. Our holding in the Baillie Gifford High Yield Bond Fund had a strong month with an increase of 2.49%. Moving to equities, our holding in the Digital Stars Europe ex UK Fund produced the largest gain with an increase of 1.37%. Finally, the only other holding which ended the month up was the SG Sterling Bond Fund which increased 0.68%.

Future Expectations

Markets do not move up, or down for that matter, in straight lines. Short term however, they do seem to have broken out of their downtrend from December last year. To maintain this view, markets will have to hold the 17th March intraday lows. Negative news reports continue to highlight a high level of fear and uncertainty in markets, but don't bull markets climb a wall of worry?

Fund Details