Fund Objective

The aim is to seek a balance between income and growth with a medium risk profile.

View on Past Performance

Renewed vigour in the US economy and increasing confidence in the global economy led to a reassessment of the outlook for inflation. As a result, global bond yields rose sharply. Long dated Gilts were particularly weak and whilst the price of short dated Gilts rose, they still significantly under-performed Sterling cash.Equity markets extended their recovery from the correction suffered in Q1. Global equities were universally strong with the Pacific Basin and Emerging Markets leading the way. Amongst developed economies, Europe was the clear leader and Japan the laggard. Relative interest rate expectations exerted a strong influence over currency movements, however, which in turn reduced returns for Sterling based investors.In the US, improving manufacturing data, capital expenditure and consumer confidence supported the belief that the economy was recovering from the mid cycle slowdown. The US consumer has remained remarkably resilient in the face of house market weakness.

Future Expectations

Whilst equities remain cheap vs. bonds, the situation where bond prices have been falling whilst equities have been rising is not sustainable and usually ends with some form of correction in equities.Markets are likely to remain volatile and range bound during the summer. The continuous feed through from the US housing slowdown into financial markets, rising geo-political tensions, rising terrorism, higher oil prices and more European protectionism could weigh on investor risk appetite.

Fund Details