Fund Objective

Health Care

View on Past Performance

"European stock markets rose slightly over the quarter in sterling terms, although investor nervousness, which originated in the credit markets,,caused significant volatility. Risk aversion and some substantial financial investment losses caused European equity markets to sell off in July ad n August before bouncing back in SeptemberThe fund outperformed its benchmark, helped by its unconstrained portfolio construction and active approach to stock selection. An underweight position in the banks sector and stock selection in technology hardware and equipment boosted performance, while stock selection in food producers and support services detracted. Holding TomTom, the world's largest maker of car navigational devices, boosted relative returns.The Amsterdam based company launched new devices and agreed to buy digital mapping company Tele Atlas. An underweight position in Nestle detracted from performance. The world's largest food and bottled water company released better than expected first half results and announced share buyback plans, which led us to purchase the stock. Holding Wavin N.V. also negatively contributed.Shares in the company fell after their forecast for 2007 sales growth fell short of analyst expectations. However, a holding in Fugro, who specialise in geological data, contributed to performance. The company's share price increased when its first half results exceeded expectations.

Future Expectations

While risks remain, particularly from further potential credit market-related difficulties, the recent turbulence has resulted in valuations looking more attractive. Although the strength of economic growth going forward remains uncertain, corporate restructuring should continue to support company profits and efficiency.

Fund Details