The UK All-Share index fell 12% during the month.The move would have been considerably worse had there not been a sharp rally into the end of the month. Mid and small cap stocks performed significantly worse that their larger peers.The beginning of the month was characterised by bank collapses and governments guaranteeing deposits.This in itself didn't help stem the tide and the banks were forced to announce massive government underwritten rights issue to increase capital and boost confidence.Furthermore, evidence that the credit crunch was impacting the real economy more sharply than expected also fuelled selling pressure. Sectors that performed particularly badly included the bank sector (due to the forced dilution of shareholders), the life insurance sector (as confidence about their capitaladequacy dissipated) and the oil service companies (as the oil price fell). Mining companies also sold off in conjunction with falling commodity prices as the credit crunch went global.The Fund is currently exposed to consumer defensive companies which should benefit from consumers trading down (eg. Arriva & Firstgroup), companies where earnings are relatively immune to the economic cycle(eg. AstraZeneca and Severn Trent)and also capital intensive companies that operate in oligopolistic markets where end demand should not fluctuate too meaningfully but raw material and energy costs are falling dramatically which should feed through to improved margins(eg. Michelin & Rexam).
355.90p
