Fund Objective

To achieve capital growth.

View on Past Performance

During the month the Trust returned -17.8%, while the Index returned -13.2%. September was a remarkable month. Stock markets suffered the worst monthly performance since the October 1987 crash. Economic data continued to deteriorate and pressures within credit markets became more pronounced. The MSCI Europe (ex UK) index fell 13.2%, with European Growth underperforming the index.In a bid to correct the liquidity pressures, global central banks pumped an additional US$180 billion into funding markets early in the month. Later in September, Lehman Brothers collapsed and Merrill Lynch was bought by Bank of America. AIG, the American insurer, was bailed out by the US government and there were several rumours regarding other institutions. The US Federal Reserve proposed a US$700 billion bailout plan to clear up problem assets.The aim was to get market participants to lend to each other again and allow markets to function efficiently. After initial rejection, the plan went through, and we expect this to be followed by interest-rate cuts to get the global economy back on track. Defensive stocks such as food retailers, tobacco and pharmaceutical stocks performed well on the month, while industrials and materials issues sold off.Individual stock volatility was extremely high, and portfolio performance suffered from disappointing results from real estate company Immoeast, which lowered the value of their real estate portfolio. We sold the Fund's holdings, favouring more defensive areas of the market instead.

Future Expectations

After the declines we have seen in the market, we believe value is now emerging. Share prices factor in a deteriorating world economic outlook, trading at very low share price valuations compared to the long-term average. For the moment, share prices are not reflecting the fundamentals, but in time they will, providing investors with some very interesting investment opportunities. For the moment, however, uncertainty remains high, and investors should be prepared for further volatility.

Fund Details