Fund Objective

The Fund aims to provide capital growth over the long term.

View on Past Performance

European stocks fell heavily as a worsening banking crisis sparked concerns over the outlook for global economic growth and corporate profits.The fund underperformed as expensive stocks with poor growth characteristics outperformed, while our preferred stocks - those with strong value and/or growth characteristics - did not work well. Detractors included stock selection in the chemicals sector and overweight positions in the oil services and oil & gas producers sectors.Stock selection in the banks sector and stock selection and an overweight position in the pharmaceuticals sector were positive. At the stock level, the fund benefited from an overweight position in BNP Paribas, after earnings at the bank's securities unit beat analysts' estimates and it said it would not need to raise capital.Also positive in relative terms was an underweight position in Fortis, which was rescued by Benelux governments on mounting concern over its solvency. Stock-level detractors included an overweight position in fertiliser maker Yara International, which fell back heavily despite a strong earnings outlook and an extremely cheap valuation.An overweight position in Fugro was also detrimental after the oilfield surveyor's 2008 profit outlook fell short of analysts' expectations. However, the fund was boosted by an overweight position in Astrazeneca after the drugmaker received broker upgrades on its shortterm earnings and pipeline momentum.

Future Expectations

European stocks look attractively valued, but concerns over global economic growth may lead to further volatility.

Fund Details