Fund Objective

To provide capital growth.

View on Past Performance

The New Star Pacific Growth Unit Trust fell 17.8%* in September, underperforming the IMA Asia Pacific excluding Japan sector, which lost 15.4%* as the credit crisis intensified. September began with the nationalisation of Fannie Mae and Freddie Mac and the rescue of AIG in the US, Asian markets weakened as the month wore on.Concerns about an economic growth slowdown in China caused investors to flee commodities, pulling Indonesia and Australia down 18% and 16% respectively. China cut interest rates for the first time in six years but this did not counteract the bad news from the credit crunch.In a difficult month, Taiwanese stock selection contributed positively, with outperformance from two defensive stocks, President Chain Store and Chunghwa Telecom. Such gains were insufficient, however, to counter weakness from two Australian energy stocks, Paladin and Silex, as commodities retreated.

Future Expectations

The outlook for Hong Kong-listed Chinese property has deteriorated; land prices had risen substantially and highly-geared developers had held back on reducing prices. This situation should, however, favour well-financed developers such as Hang Lung Properties, which refrained from expanding its land bank during the boom and should benefit from reduced competition.Asian equities are likely to remain volatile. The region's authorities have room, however, to cushion the effects of the global slowdown while falling energy prices should ease inflation. Asia's relative financial health leaves it well positioned to weather the storm and it may even benefit from having an underleveraged banking system as global monetary policy is loosened.

Fund Details