Fund manager commentary
Financial markets across the globe moved lower during September, after a period of relative calm over the summer months. This was most pronounced in Asia Pacific and emerging markets which had experienced a strong rally over the past six months however concerns regarding Chinese demand led to a sharp pull back. The UK also was affected, particularly by the uncertainty over the Scottish Referendum, while global growth concerns preyed on investor sentiment and led to a sharp pull back. Sterling weakened against the dollar but strengthened relative to the euro. The latter continues to be undermined by poor economic data from the eurozone whilst in contrast the dollar gained ground against most currencies reflecting the strong performance of the US economy and the likelihood that interest rates may well rise in the US sooner rather than later.
Against this background the FTSE All Share Index fell by 2.8% over the month whilst the FTSE Equity Investment Instruments Index declined by only 0.5% (both figures are total return). The Net Asset Value of the Income Portfolio fell by 1.1% whilst that of the Growth Portfolio declined by only 0.3% ( again both in total return terms).
As at 30 September 2014
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.