Fund Objective

The Fund's investment objective is to provide capital growth and income.

View on Past Performance

The recent safe-haven demand for gilts has been focused on the short end of the yield curve, and long dated gilts have underperformed. However, the fund outperformed its index, producing a positive return.We began the period with an overweight duration (interest rate) exposure, in anticipation of lower interest rates from the Bank of England, which we closed at the end of January, locking in performance from UK gilts.With the perceived security of government bonds continuing, a yield curve steepening position (a bias towards short maturity bonds versus long dated bonds) contributed to performance, as did yield curve steepening positions in European and US bonds.

Future Expectations

Tighter credit conditions will continue to make it more difficult and expensive for companies and consumers to get finance. Although higher food and energy prices are putting upward pressure on inflation in the near term, we believe that slowing growth will ease inflationary pressures later in the year, making it easier for the Bank of England to cut rates further.Downside risks to the economy and financial markets continue, and therefore we remain biased to being overweight duration, and towards the short end of the yield curve in the UK, Europe and US markets.

Fund Details