Fund Objective

To achieve capital growth.

View on Past Performance

We increased our financials weightings in our long term holding, Bluebay Asset Management and added to our Middle Eastern banks, which continue to benefit from the economic strength in the region. At present we are reluctant to add to western banks simply to play the sector rotation game and prefer to focus on our thematic process to drive our key financial holdings.The month saw a period of extreme sector rotation as a pull-back in the oil price and global commodity prices led to profit taking in the areas where profits still existed - oil, mining and agriculture. We had reduced our exposure here, but still suffered as the movements proved to be severe on a stock basis. Our stock winners were New Oriental Education, following strong earnings numbers, and Richemont, highlighting that in fact global and especially emerging market demand remains intact."We added to our luxury goods holdings at the beginning of the month in anticipation of strong earnings and our ""Guns and Butter"" theme contributed positively to performance over the month."

Future Expectations

We believe that oil is increasingly being traded as a curve, like bonds where in effect you are trading the spread and this is causing the current volatility. Increasing signs of demand destruction also acted as a catalyst for the pull-back in July. Going forward we are firm believers in increased performance divergence between and within sectors on the basis of fundamentals.This is where our process will help us to identify who can deliver in an environment where many companies are warning of increasing cost pressures and a growing proportion are unable to grow margins.

Fund Details