Fund Objective

To invest for capital growth with no distribution target.The Fund aims to provide a consistent performance at low risk by investing in UK equities from the FTSE 350 Net Index.

View on Past Performance

The UK stock market ended the quarter lower, along with global markets. The volatile period was dominated by worries about rising inflation, risks of weaker growth, volatile commodity prices, falling house prices and the ongoing financial market turmoil.The fund underperformed its benchmark. Overweights in nonlife insurance, real estate and pharmaceuticals & biotechnology positively contributed, but an overweight and stock selection in mining, an underweight in food & drug retailers and stock selection in travel & leisure detracted.At the stock level, an overweight in AstraZeneca benefited performance as the drugmaker received broker upgrades on its short-term earnings and pipeline momentum. Underweights in miners Anglo American and Vedanta Resources boosted relative performance, while overweights in Kazakhmys, Xstrata, BHP Billiton and Eurasian Natural Resources detracted, as falling commodity prices and fears of a global economic slowdown weighed on the sector.An underweight in Man Group positively contributed in relative terms. The hedge fund manager said first-half earnings would be lower than a year earlier due to lower performance fees for its largest fund. However, an underweight in Standard Life detracted after the asset manager said first-half profit more than doubled, helped by a one time gain from a reinsurance deal.

Future Expectations

UK equities are at historically attractive levels. However, the outlook for corporate profits appears weak until the problems of faltering economic growth, ongoing financial sector difficulties, high borrowing costs, falling house prices and reduced consumption are resolved.

Fund Details