Fund Objective

To achieve long-term capital growth by exploiting special situations principally in Europe.

View on Past Performance

In the past few months we have witnessed a period of great volatility and turbulence in fi nancial markets as investors remained focused on measures to restore normal functioning to the inter-bank money markets and confi dence to equity markets.This has made it a very testing environment for stock pickers. The Fund's underlying companies continue to deliver good, often very good, results. Our approach, to back companies with strong balance sheets and little debt while largely avoiding fi nancial stocks, has helped us weather the storm better than the wider market.The credit crunch had been initially slow to affect Europe but has since gathered pace. We expect further writedowns from European fi nancial institutions. We remain vigilant in monitoring the results from of our portfolio of companies and continue to be highly selective about any new purchases.

Future Expectations

In an environment where economic growth will be slower than in recent years, we think that companies with visible profi tability, strong cash fl ows, robust balance sheets and operations in strongly growing markets will become an increasingly attractive place for investors to be. The portfolio should benefi t from its defensive growth positions. Selective stock-picking remains crucial.

Fund Details