Fund Objective

The fund aims to achieve long term capital growth.

View on Past Performance

European shares delivered the strongest regional performance over the fourth quarter of 2007, as the FTSE Europe ex-UK index climbed 3.0% in sterling, total return terms, despite suffering some late weakness as financial stocks were buffeted by the continued liquidity crisis. The region also posted robust gains over the year.Within the portfolio, we reduced our exposure to small-cap stocks in light of the recent volatility, selling out of Rheinmettal and Pfleiderer. We restructured our exposure to Banks, switching some holdings out of Banco Popolare and initiating a position in Banco Santander. Elsewhere, we reduced our exposure to Marfin Popular Bank but added to Anglo Irish Bank.We took new positions in the German automotive sector - notably in Porsche, Continental and Volkswagen. We also took new positions in fixed line telecoms providers France Telecom and Deutsche Telekom, as we expect the sector to perform well in the current climate.

Fund Details