Fund Objective

To achieve capital growth.

View on Past Performance

Despite extreme volatility we were very active buyers over the month. We initiated new positions in Intuitive Surgical, Mylan Generics and Qiagen Diagnostics. We also added to Cardinal Health and Genentech. We sold Gedeon Richter, and also Nippon Chemiphar on recent poor results.Many high quality growth companies were on extremely attractive discounts and we cautiously worked strict purchase limits on very bad equity market days. We outperformed nicely in the last week of the month as markets exhibited a sharp recovery.Most investors would have been pleased to see October come to a close. While September was no picnic, October wiped out the entire bull market of the last five years with the S&P was down 16.9% in USD terms. Volatility reached record levels and currencies experienced dramatic swings.Risk aversion was extreme and as expected smaller companies and biotechnology companies were worst affected, especially those requiring cash to shore up balance sheets. Thankfully the Fund has a much more limited exposure to not yet profitable companies than in the past, but even so we struggled against all the relevant healthcare indices although the stronger dollar took the edge off.

Future Expectations

While the world's banking crisis seemed to find some floor after numerous bank bail-outs, global interest rate cuts and IMF-led sovereign bail-outs, it became clear that the financial crisis on Wall Street had moved on to main street.We are in the midst of the third quarter earnings season but despite the historical results, investors are eager to determine how the consumer slowdown will impact forward looking guidance. Healthcare should continue to be an attractive growth area in the current market backdrop but a stock picking approach will be key.

Fund Details