Fund commentary

Market Review
It was a tumultuous, but ultimately prosperous, quarter for European equities. The debt crisis remained centre stage, with European Union leaders announcing a new pact aimed at saving the euro. Markets remained underwhelmed. But relief soon followed after the European Central Bank announced measures to prop up the region’s banks.

Fund Performance
The Fund once again outperformed its sector average over the latest quarter, with overweight holdings in the materials, retailing and capital goods sectors being the main contributors to performance. Food, beverages and tobacco stocks were a negative contributor, largely due to the impact of our holding in Barry Callebaut.

Fund Positioning
Due to our bottom-up investment process, we have an overweight stance in industrials. This, though, is a play on individual stocks, rather than the sector as a whole. The portfolio also has a bigger precence in the consumer goods space than the benchmark. In contrast, we are underweight financials.