Fund Objective

The Fund's investment objective is to achieve a high yield.

View on Past Performance

The start of the fourth quarter marked a slight respite from the volatility seen during the summer months and money market rates moved lower. Data releases, whilst softer, were not dramatically so and the market began to push back expectations for the Monetary Policy Committee (MPC) to cut interest rates until early 2008.This period of calm proved short lived as announcements and profit warnings from corporate and financial sectors, reignited concerns of asset write-down's and year end funding pressures. Increased borrowing costs and reduced liquidity, saw the Bank of England (BoE) inject short term funds into the market in a co-ordinated effort with global central banks and as signs of slowing activity in the UK mounted, the MPC cut the base rate by 0.25%, to 5.50% at its December meeting.

Future Expectations

Our outlook for 2008 is for lower interest rates in the UK, with the first cut likely to come in February alongside the BoE quarterly inflation report. The market is currently pricing for close to 100 basis points of easing by year end.

Fund Details