Fund manager commentary
Smaller companies advanced in March with the Russell 2000 Index rising 4.4%. The Dow Jones Industrials and Standard & Poor’s 500 indices moved up 3.7% and 3.6% respectively. The technology oriented NASDAQ Composite Index appreciated by 3.4%. The US dollar weakened 1.2% against sterling.
The best performing sectors in the Russell 2000 were producer durables, consumer discretionary and consumer staples. The laggards utilities, technology and financial services. The portfolio outperformed in March. Willbros Group (contracting services for energy infrastructure) delivered good results and received a broker upgrade, Universal Truckload Services (an asset light transportation services company) benefitted from positive broker comments and Rex Energy (oil and gas exploration and production) announced encouraging well test results. On the negative side, Spectrum Pharmaceuticals (a pharmaceuticals company focussed on oncology) lowered its sales guidance and Allied Nevada Gold (gold producer) suffered as the company forecast lower gold recoveries.
US economic activity has shown improvement this year, as indicated by the usually reliable Institute of Supply Management manufacturing survey and weekly initial jobless claims, although the latest readings softened somewhat. All figures are in US dollars unless otherwise stated. Source: Bloomberg
As at 31 March 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.
