Diversified Absolute Return Fund

The investment objective of the fund is to generate an absolute return in all

market conditions.

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  • Please note: From 2 July 2009 this fund will not be listed in the Financial Times

as at 31 October 2009

Key points

  • A truly MultiAsset portfolio
  • A diversified portfolio of uncorrelated asset classes reduces volatility and provides opportunity to access returns in a variety of market conditions
  • The objective is to offer investors consistent, positive returns in excess of LIBOR +2% over a three-year rolling period
  • Investment management responsibility for the fund was taken over by John Husselbee of North Investment Partners on 13 September 2006
  • Sector: IMA Global Growth

Current views

Global markets have, almost without exception, staged a dramatic recovery since their February lows. Investors have driven rebounds in a myriad of asset classes. So far this year your fund has returned 19.35%. October, however, proved to be the crescendo with markets generally finishing the month near where they began.

To strategically reposition the fund we have removed some ETF exposure in exchange for positions in more actively managed funds. For instance, as stock selection has become more important than ever in the commodities sector, we have rotated from quant-driven holdings to those involving more active management, as in the case of the Investec Enhanced Natural Resources Fund.

With interest rates and gilt yields low, investors are being driven to look for premium income and capital growth in higher risk assets. Given this environment, we continue to favour equities over bonds, looking to managers focused on larger, defensive, and income-producing stocks, such as Adrian Frost at the Artemis Income Fund.

We believe that a correction in both developed and emerging markets could be at hand and, if so, would provide an opportune entry point for investors ready to deploy cash.

Holdings and asset class

M&G Optimal Income Fixed interest
Cazenove Absolute Equity Alternative
Legal & General Dyn Bond Fixed interest
Schroder Income Maximiser Equity
First State Asia Pacific Equity
MedicX Property
Lyxor Gold Bullion Securities Commodities
Merrill Lynch World Mining Commodities
G/Sachs Emerging Markets Currency
First State Greater China Equity

Financial information

Nav Class A Acc 37.56p
Total net assets £3.52m

Asset allocation

Equities by region (exposure as % of equities)

Performance of the fund vs benchmark

Five-year performance

Year- Calendar year
to-date 2008 2007 2006 2005 2004
Fund 19.35% -30.65% 11.17% n/a n/a n/a
IMA Global Growth sector 15.42% -24.28% 8.81% n/a n/a n/a
IMA Global Growth sector ranking 38/191 153/181 66/162 n/a n/a n/a
Quartile 1 4 2 n/a n/a n/a

Fund facts

ISIN Class A Acc GB0030565054
Distribution Semi annual
31 May & 30 November
Dealing/valuation frequency Daily
Accounting year-end 30 September
Settlement T+4
EU Savings Directive In scope
Currency GBP
Annual charge Class A 1.50%
Minimum initial Class A £1,000
Initial charge 5.00%
ISA wrapper Yes
ISA transfer Yes
Savings plan Yes
Sector IMA Global Growth
Depositary
BNY Mellon Trust and Depositary (UK) Limited
Registrar
Capita Financial Administrators