Fund Objective

The aim of the Fund is to achieve capital growth.

View on Past Performance

The Mid 250 Index fell 15.6% in September, as volatility remained very high. The main driver was the uncertainty surrounding solvency and liquidity across the global financial system. Hedge funds closing out long and short positions exacerbated the situation.The fund's underweight in financials subtracted value, with the FSA's surprise move to ban short positions in the sector, which subsequently rallied. However, we had begun to increase the fund's weighting in financials through buying Investec.Positions in industrials such as Charter and Laird were also damaging, as the market sold down any stock with exposure to slowing global growth. Steady growth/defensives began to outperform, though, so positions in stocks such as De La Rue, Xchanging and SSL added value.

Future Expectations

During the month, we took small positions in interest rate sensitive stocks, for example Travis Perkins and Bellway, and also added to water utility Pennon. We trimmed the fund's oil positions in view of the deteriorating outlook. Overall, the fund remains positioned cautiously; we believe a high quality bias will continue to work as the market looks for relatively safe havens as global growth slows.

Fund Details