Fund Objective

The Fund's aim is to achieve capital growth through investing primarily in the equity of smaller companies domiciled in Continental Europe (ex UK) or with significant Continental European operations.

View on Past Performance

January saw Smaller Companies perform in line with large caps as the HSBC Small Companies Europe ex UK Index fell by 11.8% over the month. Towards the end of the month, the market showed signs of stabilising having been substantially de-rated over the past six months.The fund returned -10.6%; ahead of its sector average.* Defensive holdings such as Austrian Post, Mobistar and Elekta all performed well. On the flip side, Bang & Olufssen failed to match earnings expectations on the back of a consumer slowdown.

Future Expectations

Now that Smaller Companies markets have been de-rated and with earnings estimations fairly stable we remain optimistic about positive returns for 2008. We will continue to identify companies with sustainable self-funding growth opportunities and strong positions in niche markets

Fund Details