Fund Objective

The fund's investment objective is to achieve capital growth through investment in European countries, excluding the UK.

View on Past Performance

European markets fell during the second quarter on the back of continued concerns regarding the health of the global economy and due to mounting inflationary pressures in Europe. Hawkish remarks from the European Central Bank contributed to the decline as policymakers responded to eurozone data showing inflation had risen to new highs following commodity and food price hikes.First quarter eurozone GDP growth was ahead of expectations, but inflation remains a problem. We believe the inflationary pressures are likely to persist until the end of the year and the credit crunch continues to impact a number of banks across the sector which posted further write-downs of assets, with several turning to the market to recapitalise.After recent share price falls, valuations are looking attractive and despite the possibility that forward earnings forecasts may be subject to downward revisions, we believe much bad news has already been priced in.

Future Expectations

We remain overweight consumer services, health care and industrials, and underweight basic materials, consumer goods, and technology.

Fund Details