Fund Objective

To provide capital growth.

View on Past Performance

We increased our weighting in the financial sector and reduced holdings in the consumer discretionary sector following a strong run up.The Fund benefited from its underweight position in the energy, industrials and basic materials sectors.Events are currently moving at such a pace that any comment made today will inevitably be rendered irrelevant tomorrow. The credit crisis has obviously continued to deepen despite the pro-active efforts of the authorities.It seems a weekend cannot pass without another challenge (i.e. financial company failure) emerging. While visibility on resolution of the crisis is obviously minimal we are hopeful that much of the worst is behind us. Settlement of the outstanding insurance contracts on the GSE's and Lehman's are progressing while the TARP rescue package could soon kick in.

Future Expectations

Real economic fallout is now unavoidable and given the timing of the recent turmoil, the upcoming earnings season will inevitably not be pretty but the larger and more significant issue remains whether liquidity can be restored to the banking system. If this is achieved growth will return.With an economic slowdown unfolding we believe earnings growth will be a scarcer commodity going forward and this should support the relative performance of growth stocks once fears of a collapse in corporate earnings dissipate. Low interest rates should also enable the earnings multiples awarded to high quality companies to expand resulting in outperformance for the growth style.

Fund Details