Fund Objective

The Investment Objective of the Ecclesiastical Higher Income Fund is to provide an above average and growing level of income together with capital growth over the longer term.

View on Past Performance

The macroeconomic environment has deteriorated significantly over the last month with the US, UK and continental European countries all now likely to be in, or close to recession. Banks continue to suffer losses from investments in asset backed securities and remain dependent on the Central Banks for liquidity and even solvency.The difficulties faced by the financial sector are spreading into the real economy with property companies, house builders, retailers are all suffering from a sharp drop in demand. We have recently reduced the Fund's exposure to commodities and allowed cash and fixed interest holdings to rise.

Future Expectations

We believe the next 12 months will be better for those who took precautions to preserve their capital before worse trouble strikes. At some stage, perhaps when the outlook seems bleakest, it will be right to buy and we will then have deep pockets. However, for the moment, we intend to batten down the hatches and see little risk in maintaining above average cash and fixed interest exposure. Our UK equity banking sector exposure remains minimal.

Fund Details