Fund Objective

To achieve capital growth.

View on Past Performance

Having adopted a cautious approach to UK equities since the 3rd quarter of 2007, the Manager has now moved towards a more balanced portfolio. Whilst acknowledging the concerns of the banking crisis, economic slowdown and falling corporate profits, an opportunity is now presented to long-term investors wishing to exploit the significant negative sentiment and extreme market valuations which currently prevail.Exposure to the Financials was further increased with the introduction of Aviva and Standard Chartered. Meanwhile additions to 'Consistent' stocks included British American Tobacco and AstraZeneca. Positions in De La Rue, Smith & Nephew, Reed Elsevier and Ultra Electronics were sold.The FTSE All-Share fell by almost 12% in October, with the market now down over 31% on the year-to-date. The strongest performing sectors (on a relative basis) included the Oil & Gas and Pharmaceutical sectors, whilst Industrial Metals & Mining were the worst.The Fund performed poorly during the one month period as relatively robust performance by Rolls-Royce, Serco, Royal Dutch Shell, Imperial Tobacco and Centrica were more than offset by losses at International Power, Wellstream, Prudential, Ashtead and Xstrata.

Future Expectations

With deteriorating fundamentals - both economic and corporate - volatility looks set to remain at elevated levels for some time. The global banking crisis has arguably tipped economies from slowdown into recession. However the Manager believes that the market valuation is now at extreme levels even adjusting for potential earnings downgrades and dividend reductions.With the positive prospect of peaking inflation, co-ordinated global interest rate cuts, and the biggest bank rescue packages ever seen, the Manager is keen to exploit the current market capitulation.

Fund Details