Fund Objective

The investment objective of the Fund is to provide medium to long term capital and income growth.

View on Past Performance

I believe much of the bad news has now been reflected in the prices of shares and am pleased to report that the decline seems to have been generally halted. Further volatility in the FTSE 100 Index is still likely but this should not majorly affect the value of MFM CFS Balanced Opportunities Fund (OEIC). Nevertheless, all the economic data is still negative and the economy is more likely to decline than grow in the current debt driven climate.We have nearly completed the assignment of the Greyhound's lease to Innventive Pubs, which has great refurbishment plans. The Greyhound is already valued at a price much higher than we paid for it and rent continues to be collected. I am now considering a further acquisition once the first one is running smoothly. Pubs are not currently regarded as good investments in the current climate, but this is why they can be bought at very low prices.The price of Firestone Diamond shares continues to languish although the recent news flow has all been positive. I retain my optimism for this company and look forward to a re-rating of the shares to reflect the current level of mining and also the exceptional potential of the exploration currently well underway. Casa Oil is also heavily under-valued and expected to increase sharply as news flow reflects the potential from the current projects that are planned for the current year and beyond.FDM's share price has recently improved as has IDOX plc and Dillistone following trading updates that confirm the quality of these smaller companies. I expect the fund's performance to improve as results flow through. Although the companies are still being valued cheaply on low multiples to their respective profits (known as the PE) the increased earnings and enhanced prospects both get reflected in the prices following positive news flow and trading updates.New acquisitions BlackRock Worldwide Mining and City Natural Resources are both performing well. Poor perception towards commodities has caused the share prices of these two stocks to drift lower and they are now trading at considerable discounts to their NAVs. I have also increased our holding in FDM.

Future Expectations

I am still avoiding banks and construction companies as I believe there to be further bad news to come.However, I am watching these sectors carefully and expect to invest at some point in the future. Media is also a sector that concerns me as advertising takes a back seat when the economy is in trouble.I half expect a profits tax by the current Government on oil companies that have made huge profits and do not intend investing in the likes of Royal Dutch Shell and BP for several months. However, if the share prices fall from their current levels, then I will consider investing.

Fund Details