Fund Objective

The fund aims to provide capital growth over the long term.

View on Past Performance

The market began the quarter on a weak note due to concern over foreign stock markets and a stronger yen. We saw a brief rally following the bail-out by the US government of Fannie Mae and Freddie Mac in September and again after the rescue of AIG following the collapse of Lehman Brothers.However, the market fell sharply towards end of September as the US House of Representatives rejected the USD 700 billion support package reigniting fear of financial crisis. Only the rubber product and pulp & paper sectors managed to record positive performance. Marine transportation, wholesale trade, mining and iron & steel performed poorly.

Future Expectations

We anticipate that the real economy will continue to be troubled by weakening consumer trends and an associated slowdown in corporate investment. Under such circumstances, we will maintain our basic strategy, aiming to enhance portfolio returns with stocks that have a clear strategy of improving returns.The valuation of Japanese equities is cheap in relative and historical terms; hence we believe there is the distinct possibility of a sharp re-rating of the market once the fundamental outlook stabilises.The valuation of Japanese equities is cheap in relative and historical terms; hence we believe there is the distinct possibility of a sharp re-rating of the market once the fundamental outlook stabilises.

Fund Details