Investment FundsLibero Strategic Fund

In volatile directionless markets the Strategic Fund April return was -1.09%. For the year as a whole, the unit price remains in positive territory, but as we saw last year, New Year optimism is being tempered by reality as we move into the middle part of the year.

Asset allocation remained broadly unchanged with equities continuing to represent over 50% of the total. No markets were immune from the set-back, but UK and US markets delivered better returns than elsewhere. These two markets account for nearly 80% of equity exposure.

Volatile markets did present opportunities to take profits in Whitbread and Johnson Matthey, balanced by an additional investment in BP. Although few clear trends were discernible, companies less sensitive to economic growth such as Severn Trent performed well after an indifferent start to the year.

Alternative asset classes, which last year insulated the portfolio from equity volatility had a relatively poor month with hedge funds, private equity and commodity investments all declining in value. This section of the portfolio accounts for approximately 15% of the total at present and remains an important component of our diversified approach to investment.

As evidence of economic growth accumulated during the first few months of the year, central banks indicated that financial markets should not expect further monetary help. However, in recent weeks the news flow has deteriorated, particularly in Europe. If it becomes clear that economic growth in the UK is likely to remain anaemic and that inflation remains on a declining trend, then central banks on both sides of the Atlantic have the mandate and the capacity to provide further help. At present, Strategic is defensively positioned with cash of 14% available for investment as opportunities occur.