Growth in Western economies remains under pressure and is slowing. This has reduced demand for oil and helped ease infl ationary pressures. As lenders of last resort, central banks in the US, UK and Europe continue with a range of measures to help restore confi dence to the fi nancial system. Even so, the problems in the credit markets remain and their economic effects continue to evolve.The Fund continues to be invested on a more cautious basis in these volatile and diffi cult conditions. It mostly contains geared trusts with a high degree of equity asset cover and bonds based on sovereign issuers and basic industry sectors as we think it is essential that asset and earnings cover is maintained at healthy levels and relative risk is kept under control.Cash fl ows from maturing assets will continue to be reinvested into high quality split capital trusts as well as into lower geared, conventional trusts which are almost entirely equity-oriented.We continue to believe that new portfolio investments should be managed to generate an attractive yet realistic return for the trusts and bond sectors in which we can invest, while also offering a reasonable prospect of future growth as part of the total return to investors.
115.87p
