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| Fund Overview | |
| Manager Comments | Regional performance in global equities was relatively mixed, with positive returns in the US and Japan offset by falls in S. Korea, China and Hong Kong. In the US data continues to be consistent with a moderate economic recovery. In stark contrast, Europe remains in its own world of pain. Inconclusive Italian elections and a banking “bail-in” in Cyprus are uncomfortable reminders of a crisis which is far from over. It is no surprise that March PMI’s for the Eurozone fell further and reflect ongoing recessionary conditions in the region. While the data in China remains broadly consistent with moderate economic recovery, the market focus was firmly on the reform agenda of the new administration. There seems to be an increasing acceptance by key policymakers of a further moderation in medium term growth while urgently needed reforms in the financial system are implemented. The fund chose to actively reduce exposure to equity markets during the month of March to just below 90% for the first time since September the 6th 2012. While not calling for an imminent correction the manager is conscious that markets have moved a long way in a short period, and having captured most of that upside felt it was prudent to lower exposure. Regionally performance during the month was broad based for the fund, with the main negative coming from the strengthening AUD where the fund is currently only 50% hedged. A correction in the short term certainly can’t be discounted, especially as investors approach the traditional “sell in May” seasonal weakness. The risks are well known, high sovereign debt levels lead to increasingly difficult fiscal decisions ahead for most developed nations, where welfare budgets in particular are running at unsustainable levels. Nevertheless in spite of these risks, it is important to keep focused on the medium term fundamentals for equities, which remain compelling in the manager's opinion. |
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