Market Review
As fears of a financial crisis in Europe receded and the US economy showed signs of improvement, money flowed out of safe-haven investments, such as government bonds and into equities and higher-yielding corporate bonds. There were particularly impressive gains for emerging markets equities.
Fund Performance
The Fund ended the quarter slightly behind the sector average. The main negative impacts came from the holdings in commodities while the key positive impacts came from UK equities and real estate.
Fund Positioning
There were few significant changes to asset allocation during the quarter. We have maintained a small pro-risk stance, although we are still looking for opportunities to re-invest in equities when valuations become more attractive, as macro-economic momentum remains supportive.