Market Review
The UK FTSE 100 index rose 4.6% in the first quarter whilst mid and small cap companies comfortably outperformed. Defensive areas, such as health care lagged those most exposed to the health of the economy, such as financials, and industrials sectors. Elsewhere, the Emerging Markets MSCI EM index rose 10.9%, compared to Japan where the benchmark Topix index rose 7.8% all in sterling terms.Solid US data, mainly in the employment and retail sectors, were not reflected in macroeconomic numbers for the UK and the Euro zone. In Asia, the Chinese government lowered growth forecasts from 8% to 7.5%, whilst concerns for slowing growth in India also led to share price falls. A new package of support and a major restructuring of the Greek national debt relieved one of the bigger concerns of recent months for bond markets, which also welcomed the second round of the europaen central bank's long-term refinancing operation. These moves bolstered confidence and provided strong support for the corporate markets. The weaker outlook for growth in the UK may have been behind the fall in UK ten year gilts, versus a positive return for corporate bonds where spreads tightened over gilts.
Fund Performance
The Fund made a gain of 3.04% over the quarter which was a fourth quartile return in the IMA Mixed Investment 20-60% Shares sector.
Mark HarriesSimon Wood
31 March 2012