Fund Objective

To provide a sustainable level of income and the prospect of capital growth over the long term.

Future Expectations

The rate of infl ation in the UK is likely to peak in the fi nal quarter of the year as the shock of higher food and energy prices moves through the system. However, the recent retreat in oil and commodity prices could cause the infl ationary fears of the Bank of England to evaporate. This could pave the way for further cuts in interest rates.As the economy slows, lower interest rates ought to support companies, underpinning the prospects for corporate bonds. By contrast, we expect upward pressure to remain on real gilt yields because of the huge additional issuance which the market has to absorb.Nevertheless, the value in many corporate bonds looks extremely attractive, not just relative to government gilts but in absolute terms too. This provides what we believe is an excellent opportunity for long-term investors. For equities, we continue to look for companies with strong, sustainable cash fl ows. These should enable dividends to grow and provide shareholders with a rising income.

Fund Details