During the month the Trust returned -19.6%, while the Index returned -15.7%. In October, the performance of the German equity market and the Trust was heavily impacted and distorted by the share price movements of Volkswagen. Due to a massive technical squeeze, shares in Volkswagen increased by over 200% for a short period at month end and it briefly became the largest company in the world by market capitalisation.The Trust underperformed its comparative index over the month with this underperformance attributable to our lack of exposure to Volkswagen at a time when its share price moved up sharply. Aside from this, the Trust was reasonably well positioned. At the sector level, our emphasis on the information technology and healthcare sector and reduced emphasis on industrials were beneficial.At the stock level, our holdings of Actelion and Fresenius in the healthcare sector and Deutsche Telekom and Software AG also performed relatively well. The period under review has been one of the most volatile on record, with corporate failures, governmental and financial market interventions and rapidly deteriorating economic data.At the end of October, doubts remain over whether the US Federal Reserve's rescue plan will effectively ease the ability of banks, companies and individuals to access credit. Evidence of a slowdown was seen first in the US economy, but European and German economic indicators have quickly followed suit. While inflation concerns persist, pressure has increased on central banks to cut interest rates in order to stimulate the economy.
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