Fund Objective

Capital appreciation.

View on Past Performance

The fund gained 12.5% in August versus the S&P 500 rise of 10.1% in sterling terms, bringing its gains for the first eight months of 2008 to 11.5% compared with the benchmark index fall of -3.3%. The US market strengthened in August in response to the fall in energy and commodity prices, while the fund returns received a strong additional boost from currency moves as the sterling weakened against other currencies including the dollar.

Future Expectations

The US market has proved surprisingly resilient in the face of continued bad news. Recent macro data indicates that the housing situation continues to deteriorate while unemployment claims have risen. Moreover, consumers continue to struggle with high food and energy costs. We believe that there is a clear risk of a protracted economic slowdown that is not fully factored into markets.The fund's performance has benefited from the recent recovery in consumer discretionary stocks. We have used the strength to take some profits in both Conn's and Fred's, while we continue to look for other attractive stock-level opportunities. Our focus is on well-run companies with robust balance sheets.

Fund Details