Fund Objective

To prioritise capital growth.

View on Past Performance

The Fund's unit price rose slightly during the month We are in the midst of exceptional events occurring within the financial markets. There are very real fears for the global banking system. At the time of writing, political wrangling risks undermining a $700 billion lifeboat which is being launched to prevent a meltdown of the US system.It is sobering to be told by respected elder statesmen who managed portfolios through the 1973 bear market that the challenges on this occasion are more severe than they were then. Global capital markets have literally imploded and century old institutions have been reduced to rubble in just a few weeks. The process of deleveraging has become savage; it is inherently difficult for all finance houses to liquidate assets simultaneously.Therefore we are in a situation where the ownership of an asset drives valuations rather than its fundamental attraction. Within the closed ended sector this can lead to a complete dislocation of share prices and net asset values.

Future Expectations

Looking to the future, our immediate concern is the probability of further shocks. Counterparty risk is extremely high. Until we know where the bodies are buried, the world remains a dangerous place. It is far from certain that the latest bailout will succeed. However it is clear that the global authorities are very aware of the need to provide whatever support is necessary to the financial system.On a more positive note, extreme pessimism is already baked into share prices and many commentators are reminding us that it is "always darkest before the dawn".

Fund Details