Fund Objective

The investment objective of the Company is to achieve growth in capital and income by investing in any country and in any economic sector of the world through a spread of assets and investment policies.

View on Past Performance

The value of the Fund at 31st March 2005 was £65.2 million. The return from inception (30th June 2003) to the end of March 2005 was 27.34% which was 7.77% better than World equities generally. The return on the Forest Fund was +9.37% over the half year compared to a benchmark performance of +6.22% over the same period. During this time the fund paid a dividend of 0.72p in October 2004 to its income shareholders.

Future Expectations

The market is likely to continue to focus on US macro economic indicators. The Fed indicated in Q1 that it would keep to its tightening policy at a 'measured pace' after it increased rates by 25bps in early February and in late March to 2.75%. Accordingly, Lehman Brothers expects rates to rise steadily to 3.75% by December.However the Fed has cautioned against neglecting inflation so rates could rise further. Many commentators believe that the US housing market looks increasingly frothy and vulnerable to increases in interest rates. The high oil pirce continues to be a concern as to its effects on inflation and dampening global growth.Due to the above uncertainty over US economic growth, the equity and credit markets remain vulnerable to stock specific shocks such as AIG and General Motors. It is also likely that the end of Alan GreenspanÂ’s tenure as Chairman of the Fed will add to this general increase in risk aversion over the next two quarters.

Fund Details