Markets continue to be extremely volatile in the second quarter as they have been for much of the last year. This is understandable as the general optimism of early 2007 gave way to extreme pessimism. Undoubtedly, the investment climate has changed but not as much as market commentators or indeed the markets would indicate. The benchmark index, FTSE AIM Index, rose and subsequently retraced more than 10% in the quarter. The Fund proved to be much less volatile. Both the Fund and the Index ended the quarter slightly higher than the start. For the first time in ages, smaller companies performed in a similar way to larger caps.
The portfolio continues to have a number of resource companies which should have been material beneficiaries of both the recent US dollar weakness and rise in commodity prices, principally oil and gold. However, to date, their shares have not reacted. In fact, on occasion, some prices have been savagely marked down for little apparent reason.
During the quarter, one of our investments, Alltracel Pharmaceuticals, received and agreed to a cash bid and we took the opportunity to top slice oil explorer, Borders & Southern, following a sharp share price rise. It was a quiet quarter in terms additions to the portfolio with only a small addition being made to unquoted oil explorer, GB Petroleum, at 20% valuation uplift.
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|
%
|
|
AIM
|
82.7
|
|
OFEX
|
7.5
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Unquoted
|
9.9
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