Fund manager commentary
The UK stock market continued its upward trend with the FTSE All-Share index gaining 4.8% during October. Although the FTSE 100 is still below its all time high, set on 31 December 1999, the All-Share index has surpassed all previous peaks and is at twice the level of the most recent trough recorded in March 2009 during the financial crisis.
Although there are some encouraging signs that the UK economy may at last be starting to perform a little better, the corporate reporting season for the quarter to the end of September has been mixed. There were disappointing figures from a wide range of companies, including Unilever and Tesco. More positively, the IMF upgraded its growth expectations for the UK to 1.4% in 2013 and 1.9% in 2014. Both of these are well ahead of official forecasts. Further afield, China reported GDP growth of 7.8%, which is the fastest rate of growth it has seen so far this year.
Inflation in the UK at 2.7% for the CPI remains stubbornly above the target rate, but monetary policy with unchanged interest rates is firmly directed at stimulating growth. The start of the month saw considerable manoeuvring in the US as it approached a self-imposed debt ceiling, but unsurprisingly a compromise was reached that avoided any real disaster. No long-term solution was found, but the whole issue has been pushed back for review.
As at 31 October 2013
The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market movements. Past performance is not a guide to future performance. When you sell your shares, you might get back less than you originally invested. If markets fall, gearing can magnify the negative impact on performance. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Emerging Markets, Unquoted Companies and Smaller companies carry a higher degree of risk and their value can be more sensitive to market movement; their shares may be less liquid and performance may be more volatile. The fund may invest in hedge funds or private equity funds which are not normally available to individual investors, exposing the fund to the performance, liquidity and valuation issues of these funds. Such funds typically have high minimum investment levels and may restrict or suspend redemptions or repayment to investors. The asset value of these shares and its prospects may be more difficult to assess.