Fund Objective

To invest primarily for long term capital growth from a portfolio of investments.

View on Past Performance

UK equities outperformed their US counterparts in October as interest rate optimism (both at home and in the US) combined with a sudden burst of M&A speculation. Shares in London climbed towards the start of the month to hit a 10-week high as optimism spread from Wall Street. At the same time, Northern Rock rebounded sharply on hopes of a rescue package, whilst mining stocks flourished as the price of gold and platinum hit a series of highs.Whilst news that the MPC had decided to keep interest rates at 5.75% caused some disappointment amongst investors, it was the reappearance of takeover activity, admittedly most of it speculation, that provided the biggest lift to equities during the month. Sentiment was buoyed by a joint bid for Scottish & Newcastle by Carlsbery and Heineken, talk of an Asian gaming company building a stake in Rank Group and rumours of a bid from the US for Smith & Nephew.Wall Street's sharp correction on the 20th anniversary of the crash threatened to send shares in London lower as well, but strong gains by Vodafone in the wake of positive results from France Telecom and an upgrade (from hold to buy) from ABN AMRO provided a powerful offset. Consequently the FTSE-100 index ended the month up a net 3.9%, whilst the FTSE All Share index was 4.1% higher.Within the portfolio the holding in ICI was sold following further progress with the agreed bid from Akzo Nobel and receipt of the final dividend. Part of the proceeds were used to add to the position in Charter, which has weakened from recent highs on concerns over the global economic outlook.The group increasingly sells it's welding and gas-handling equipment to manufacturers in the Far East and other emerging markets where demand has remained more robust than established markets. Notwithstanding the risks to these markets from a slowdown in the US, the outlook for these markets does not appear to be correctly reflected in the share price of Charter and we carried out a modest addition to the holding.

Fund Details