Fund Objective

To achieve capital growth.

View on Past Performance

During the month the Trust returned -12.3%, while the Index returned -15.0%. UK smaller companies performed broadly in-line with the rest of the market in September, which is to say that share prices generally moved quite sharply lower on concerns about the stability of the financial system. Although the fund ended the month lower, it did outperform the broader smaller companies market in very volatile and illiquid markets.The fund benefited from overweight positions in healthcare, technology and medical technology. We favour companies with strong balance sheets and low levels of borrowing in the fund, and this helped performance over the month. We continue to seek out companies with potential to deliver earnings growth in relatively "defensive" areas such as healthcare and defence.

Future Expectations

We sold almost all consumer and constructionrelated companies in the fund in September. We believe the economic outlook for the next 12 months has deteriorated, but the market is not yet pricing this in. No new holdings were purchased for the portfolio although we did add to a number of existing holdings where performance had been weak.

Fund Details