Fund Objective

The objective of the Fund is to provide an attractive rate of return through investment primarily in sterling corporate and other sterling non-gilt fixed interest securities. A proportion of the Fund may also invest in non-sterling fixed interest securities as well as UK gilts.

View on Past Performance

September was an extremely challenging month in the fixed income markets, during which the fund outperformed its index. Credit spreads widened massively as investors fled the perceived risk of private financial institutions. However, the fund has held an underweight credit position through the deepening credit crisis, resulting in positive returns relative to the index. In spite of the volatility in global financial markets, the fund's strategy remained unchanged.

Future Expectations

Whilst the fundamental outlook for the corporate sector looks to be deteriorating, this does appear to be more than priced into current markets. Current spreads are sufficient to compensate investors for cumulative default rates approaching 20% over the next five years.For value orientated investors with a medium term investment horizon, and who are willing and able to bear near term price volatility, we believe that the current market offers an unprecedented opportunity to invest in high quality credit at extraordinary spread levels.

Fund Details