Fund Objective

To maximise long-term capital growth.The fund is also suitable for investors looking for aggressive exposure to the UK stock market.

View on Past Performance

The UK stock market ended the quarter lower, along with global markets. The volatile period was dominated by worries about rising inflation, risks of weaker growth, volatile commodity prices, falling house prices and the ongoing financial market turmoil.The fund underperformed its benchmark. Overweights in nonlife insurance and tobacco, and stock selection in general retailers, positively contributed, while stock selection and an underweight in banks and an overweight and stock selection in oil and gas producers detracted. At the stock level, the strongest positive contribution came from an overweight position in drugmaker Astrazeneca, which received broker upgrades on its short-term earnings and pipeline momentum.Underweights in mining companies Rio Tinto and Xstrata also boosted performance in relative terms as falling commodity prices and fears over slowing global economic growth weighed on the sector. In contrast, an overweight in HBOS detracted as concerns mounted over its exposure to the weakening UK housing market.Overweights in oil companies Dana Petroleum and Dragon Oil also negatively contributed as the oil price fell towards the end of the period on global economic worries and on concerns they may struggle to maintain credit lines.

Future Expectations

UK equities are at historically attractive levels. However, with economic growth faltering, ongoing financial sector difficulties, high borrowing costs, falling house prices and reduced consumption, the outlook for corporate profits appears weak.Markets are unlikely to normalise until borrowing rates normalise, banks recapitalise themselves, property prices stabilise and private sector credit demand begins to recover. Furthermore, earnings momentum needs to improve.

Fund Details