Fund Objective

The investment objective of the Fund is to seek to maximise total return.

View on Past Performance

The distressed fi nancial environment continued throughout August as concerns over losses in US mortgage related debt instruments mounted. In response to the seizing up of the money market, the US central bank reduced the discount rate to provide assistance to the fi nancial system in an attempt to stabilise the situation.It was a very good month for global sovereign bond investment as the fi nancial chaos resulted in a fl ight to quality which saw US, UK and European government bond prices soar to levels not seen since 2004. As a result, the fund had a strong performance during the month.In addition, the currency exposure of the fund added signifi cant value as the decline in sterling and the weakness in high beta currencies was taken advantage of through appropriate currency overlay exposures.

Future Expectations

Looking ahead, the critical question is whether the recent fi nancial turmoil has a direct and negative impact on the global economy or whether it escapes relatively unscathed. Indeed, there are historical precedents for both outcomes. Our base case is that the latter is more likely given the strong economic situation prevailing before this fi nancial crisis but we will be monitoring events closely to assess the risk around this outlook.Suffi ce it to say, that we anticipate signifi cant potential for healthy returns in the fund going forward with the added comfort of investing in an asset class which is a watchword for safety and where repayment is government guaranteed.

Fund Details