Fund Objective

To achieve capital growth.

View on Past Performance

This month the Trust returned -11.4%, while the Index returned -9.0%. September was another volatile month in the Korean market. Although the Korean KOSPI Index fell only slightly (-1.8%) in local currency terms, the market lost 9.3% in Sterling terms in line with a weak Korean Won. Continued risk aversion and uncertainty regarding the prospects for US and global economic growth saw sharp movements in the market during the month.The Korean financial authorities, in line with other international financial regulatory bodies, moved to limit the short selling of Korean stocks by hedge funds late in the month. Against this backdrop, the performance of the Fund was slightly weaker than the market. Key detractors from relative performance included stock selection in the consumer discretionary sector and an underweight position in the energy sector. Strong areas of the market included brokerage, machinery and construction.The Korean Won has continued to slide in recent weeks. Although this improves the price competitiveness of Korean exporters, the rapid pace of the depreciation has raised concerns. With exports slowing, and raw materials prices remaining high, Korea's current account deficit has widened.

Future Expectations

Like other global markets, the Korean stock market is waiting for a clearing of credit market issues in the US and other developed markets. Valuations remain constructive and earnings estimates have become more realistic. Barring all but the most dire of global economic scenarios, we believe Korea remains well positioned to benefit from a gradual recovery of financial market confidence and the global economy in the long-term.

Fund Details