Fund commentary

Steven Maxwell

A strong rally over the festive period ensured European equities rounded off the year in a sprightly fashion. Surprisingly good economic data, particularly consumer confidence numbers in the US, were the main drivers of performance, though trading volumes were thin over the holidays. Overall, the FTSE Europe ex-UK index was up 5.1% in local currency terms.

We remain bullish about the outlook for European equities, with earnings numbers expected to pick up over the coming quarters. We will continue to look for robust companies, such as recent addition Vallourec, that will benefit most from the ongoing recovery.

The Fund outperformed the index in December. Arcellor Mittal provided the key impact, benefitting from higher rising metal prices and analyst upgrade. Tenaris also impacted positively as crude oil prices rose above $80 a barrel while other notable risers included CRH and Kone Corporation.

Steven Maxwell
31 December 2009

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