Fund Objective

To provide above average long term capital growth.

View on Past Performance

The global technology sector fell by 15.5% during September, dragged down by growing fears that the increasingly severe credit crisis would cause a global recession. The underlying characteristics and prospects of companies were ignored as concerns about tight credit availability, deteriorating economic conditions and the insolvency of Lehman Brothers dominated investor sentiment.The New Star Technology Unit Trust fell 16.4%* while the IMA Technology and Telecommunications sector lost 14.9%*. Performance within the sector was widely dispersed, with information technology hardware falling 19.7% against a loss of less than 7.0% in computer software and services.The fund continued to increase its weighting in US-based equities in the face of declining economic growth in Europe and Asia. In September's conference season, leading technology companies announced that their immediate trading prospects were worse than expected. The main issues were limited visibility about sales prospects, deteriorating consumer spending and concerns about holiday season demand.Research in Motion, maker of the Blackberry, lost 45% of its value after earnings and gross margin guidance disappointed. By contrast, Hewlett Packard, one of the fund's holdings, was one of the sector's strongest performers after an upbeat day for analysts at which it presented a multi-year integration plan for its recent acquisition, EDS, and outlined meaningful earnings accretion.

Future Expectations

The third quarter earnings season opens in October, with investors focusing on the outlook for the remainder of 2008. Amid signs of global economic slowdown, the attention is likely to be on the speed at which companies' profits are declining.

Fund Details