Fund Objective

The Fund's investment objective is to provide capital growth and income.

View on Past Performance

The second quarter saw a surge in volatility in government bonds, particularly in the UK, as investors switched attention from slowing growth to fears that an oil price shock, like that of the 1970s, would cause inflation to accelerate and force central banks to raise interest rates.The government bond market had moved from pricing in interest rate cuts to anticipating interest rate rises. Government bonds were subsequently subjected to an aggressive sell-off and our strategy had a negative impact on performanceAs market volatility increased, we reduced the fund's exposure as part of our strict risk management procedures, bringing duration (interest rate exposure) to neutral and closing yield curve strategies (which favour short-dated bonds over long-dated bonds).

Future Expectations

We believe that the Bank of England will remain vigilant towards inflation, but will be reluctant to raise interest rates while the economy remains under pressure. We remain neutral duration and keep a careful eye for evidence of a shift in the balance between growth and inflation.

Fund Details