Fund Objective

Specifically selecting companies in mainland Europe, excluding the UK, the fund aims to invest in undervalued companies offering the potential for capital growth over the medium to long term.

View on Past Performance

European markets continued to slide over the third quarter, falling by a further 12% in local currency terms, after the 10% drop in the second quarter. The market was undermined by the successive rescues of Fannie Mae and Freddie Mac, HBOS, AIG, Fortis, Bradford and Bingley, and Dexia. The collapse of Lehman Brothers, furthermore, created significant disruption in the financial system.The announcement of the proposed Troubled Asset Relief Program provided some temporary respite to markets, but share prices quickly fell back once again with Congress failing to ratify the bill. Markets present a challenging paradox at the moment.

Future Expectations

On the one hand, the immense stress to which the banking system is being subjected worldwide has created enormous uncertainty. On the other hand, however, the recent falls in commodity prices have started to ease inflationary pressures - as a consequence, worries have now largely evaporated that interest rates will have to be raised.The corporate sector, excluding bank is in relatively good shape: the average European company is now more profitable and carries less debt than for many years. Companies, lastly, are on almost all measures as attractively valued as they have been for many years.

Fund Details