Fund Objective

To achieve primarily a high level of income and in addition capital appreciation.

View on Past Performance

In january, the PALLMALL High Yield Europe Plus Fund had a 1.34% return, net of all fees and expenses. The Fund's NAV at the end of the month stood at 80.86.

Future Expectations

The market outlook remains one of spread widening potential from our point of view. Last month we re-iterated our view that we expect spreads in high yeild to widen approximately 100-150 basis points over the next six months primarily on rising interest rate expectations driven by higher commodity prices and an up-tick in inflation, increased LBO activity and expectations of rising default rates from very low levels towards year end.On the positive side the market has absorbed recent new issuance without material indigestion and the short term pipeline is more subdued. The portfolio has reduced some risks and with underlying credit fundamentals remaining good on balance, we would expect to take advantage of any market weakness to pick up attractive risk at higher spreads.

Fund Details