Fund Objective

To maximise long term growth of capital and income.

View on Past Performance

The Fund had a difficult quarter, returning -10.1%. The market suffered too, falling by 7.6%. There were three leading aspects which affected performance. In broad technology, sector and stock selection was disappointing across such as EMC, Cisco Systems, Qualcom, and Microsoft.Similarly, financials had a negative impact with the portfolio light in exposure to the better performing banks, while the holding in Nasdaq Stock Market, although a highly rated company, fell during the quarter on issues surrounding its bid for the London Stock Exchange.Finally, across the consumer sector, poor performance came from stocks exposed to the weakening of housing market data and the prospect of a more prolonged increase in interest rates - Pulte Homes, a specialist builder in the first home and retirement sector, being a notable example.Holdings which did well included utility companies TXU and Exelon; Kansas City Southern (industrial transportation); Wal- Mart (general retailers); and Peabody Energy (mining) which continued to build on its early year performance.

Future Expectations

Based on most traditional measures of value, the US market looks attractive - earnings growth looks good and earnings revisions remain positive. It is conditions like these, together with a stabilisation in growth, which will act as potential catalysts for further market strength.However, there are risks - a major one being that the Fed applies too much tightening to interest rates. While some slowing of economic activity is expected given previous interest rates rises still feeding through, any slowdown will not be dramatic

Fund Details