Fund Objective

The aim of the Fund is to achieve a total return primarily by way of income with some capital growth.

View on Past Performance

September was a tumultuous time for financial markets as the credit crisis returned to centre stage. Initial relief following the move by US authorities to take control of Freddie Mac and Fannie Mae was replaced by shock over the collapse of Lehman Brothers, the takeover of Merrill Lynch and the government bail-out of AIG.In Europe, Bradford & Bingley was bought by the UK government and the Benelux countries moved to bail out Fortis. In this very volatile environment, risk aversion rose sharply and liquidity dried up. European government bonds outperformed corporate securities as investors sought safer assets and government yields fell.We maintained a long duration position, as the realities of recession became clearer. The fund's long duration position towards the ten-year sector contributed to performance. However, the long end of the curve underperformed, so the positioning in this sector in the UK detracted from returns.Elsewhere, the fund's underweight holding in corporate bonds benefited performance, as these suffered from investors' flight to quality.In FX, we maintained a long Swiss franc/short British pound holding, which proved neutral for performance.

Fund Details