Fund Objective

The trust aims to achieve a growing income with some prospects for capital growth over the medium to long term.

View on Past Performance

In October the Fund made additions to a number of its existing equity holdings. October was characterised by sharp fluctuations in equity, bond, currency and commodity markets. Increased evidence emerged worldwide of slowing levels of economic activity. The IMF was called in to provide support to Hungary, Iceland, Ukraine and Pakistan. The Fed also provided extensive lines of dollars to a number of countries. Interest rates were reduced in the USA and UK.The UK government announced plans to inject £ 37bn of additional capital into the UK banks through the issue of ordinary and preference shares. Barclays Bank announced a £7bn funding package; and Centrica launched a £ 2.2bn rights issue. The FTSE All share Index returned -11.9%. The FTSE 100 returned -10.5%, outpacing the FTSE 250 and FTSE Small Cap indices which each fell approximately 20%. The best performing sectors were Oil & Gas and Healthcare.The bank, life insurance and mining sectors were among the weakest sectors. Bonds outperformed equities, with conventional gilts returning +0.3% and index-linked gilts returning -6.6%.

Future Expectations

The central asset mix of the portfolio is to have 55% in UK equities, 35% in index-linked gilts, 7% in conventional gilts and 3% in cash. The equity weighting is currently below 55% and within the bond portfolio, the Fund is well above its neutral weighting of 35% in index-linked gilts and at the 7% neutral weighting in conventional gilts.Within the equity portfolio, our approach remains to look for opportunities to buy into strong companies at attractive valuations, particularly in situations where we perceive short term market sentiment to be overly pessimistic.

Fund Details