Fund Objective

To achieve long term growth.

View on Past Performance

We added to Check Point Software after the company reported good results. We repurchased NDS Group, whose share price has now fallen to below the level it was trading before a bid was made for the company. We bought Tellabs, whose valuation had fallen to just slightly more than the cash on its balance sheet.The share price then recovered quite sharply, so we sold the entire position. We sold several holdings where our research has shown declines in company fundamentals, namely Research In Motion, THQ and Intersil. We also sold Adobe as we view that the company's valuation factored in a milder downturn that the one that is currently happening.The Fund outperformed the MSCI World Information Technology Index during the month. Most major equity markets declined quite significantly during October.

Future Expectations

The key events of the month were global interest rate cuts, further bank bail outs, a complete meltdown of the financial sector in Iceland, high levels of volatility in currency markets, and a mass exercise in risk aversion leading to unprecedented selling of equities.Technology companies reporting their third quarter results indicated that the global economic slowdown is impacting purchasing decisions (most notably in the consumer electronics area) and the tone of management guidance for the remainder of 2008 and for 2009 has taken a significant turn for the worse.Technology companies appear to be trading at historical lows, but with the risk that earnings forecasts continue to decline over the next couple of quarters, it is hard to forecast how much cheaper on a price to earnings basis the sector can get. The key principals in the current environment are strong balance sheets, management teams and product offerings, as these will be the first companies to recover when the economic outlook improves.

Fund Details