Fund Objective

To achieve capital growth.

View on Past Performance

There were no material changes to the portfolio over the month. The Fund remains focused on high margin, appropriately financed growth stocks and remains underweight in UK domestic, consumer facing stocks. Continued focus on reducing the number of holdings. The Fund performed similarly to an index that exhibited a significant decline in what was once again a very volatile month.Individual share price movements were, in many cases, extreme, driven by very thin volume and unrelated to underlying fundamentals. Evidence of distressed selling is creating further opportunity for the patient, long term investor. The liquidity crisis within the global banking system continued to plague investor sentiment as did an expectation of slowing global GDP growth.

Future Expectations

The UK Small Cap market remains volatile and illiquid, exacerbated by evidence of distressed selling. The 'banking crisis' together with deteriorating global GDP growth expectations are dominating investors minds and Government/central bankers are being forced to act. Deleveraging will be painful and is necessary. Elevated interbank rates, evidence of forced selling and an increased risk of recession have all contributed to a precipitous fall in the Smaller Companies Index.However, as we move into a period of reducing inflation, falling interest rates and assuming government intervention in the banking sector has a positive impact, equity investors are entering a period of significant opportunity - but over the short term the road will be bumpy. We remain optimistic for returns from undervalued smaller growth companies over the medium term.

Fund Details