Fund Objective

The Fund aims to achieve long-term capital growth.

View on Past Performance

The global financial crisis dominated investor sentiment in September and the FTSE All Share Index declined by 13% in highly volatile conditions.The fund performed relatively well. Not owning HBOS was the biggest contributor to outperformance - the stock fell by 61% over the month. Other positive contributions came from relatively defensive stocks such as Capita and Reckitt Benckiser. Large overweight positions in Rio and Xstrata were unhelpful, given the impact of falling commodity prices.However, the effect was mitigated by a reduction in our exposure to mining during the month - we sold shares in Anglo American and Rio Tinto. We also sold Tesco (due to concern over cost pressures), British Land and Diageo (the latter following a profits warning from Pernod).The support services company Serco was sold on account of its high valuation. We invested in the insurers Legal & General, which appeared to offer good value, and telephone network operator Cable & Wireless, which is enjoying big earnings upgrades.

Future Expectations

The market will experience further volatility in the short term, given the continuing impact of the credit crunch. However, falling interest rates should encourage investors.

Fund Details