Fund commentary

Fund Commentary
Global growth concerns continued to plague corporate bond markets. Investors' aversion to anything risk-related meant that corporate bonds once again underperformed their government equivalents.
Within the portfolio, there were few significant transactions, as market liquidity remains lacking. However, there were some signs of the new issues market spluttering back to life and we took part in new issues from Scottish & Southern Energy and France Telecom.
The impact of the hedging we put in the Fund during late August/early September had a reasonable impact in reducing the hit to the Fund of continuing concerns about sovereign/financial risk in Europe. Other cyclical sectors such as basic materials, industrials and consumer related areas also cost the Fund performance in an absolute sense due to the building concern that continued delays in solving the liquidity crisis in Europe will heavily impact confidence and growth going forward.



30 September 2011


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