The World Energy Fund seeks to maximise total return. The Fund invests globally at least 70% of its total assets in the equity securities of companies whose predominant economic activity is in the exploration, development, production and distribution of energy. Additionally, the Fund may invest in companies seeking to develop and exploit new energy technologies.

The Fund underperformed its benchmark over the month*.

Occidental, an Exploration and Production company with significant exposure in the US, disappointed as their quarterly results missed their earnings targets. This caused the stock to underperform over the period which weighed on the performance of the Fund. EOG Resources also detracted, following a blow-out of a well in Pennsylvania. On the positive side, Anadarko was a strong contributor to relative performance this month, on improving news from Macondo and news of a discovery in off-shore Ghana. Strong results from a number of oil services companies also contributed to the performance of the Fund.

The Fund instigated a position in a small exploration and production company, operating in off-shore Western Australia.

Most emerging economies have continued to recover firmly and, despite pockets of uncertainty, the picture is improving for OECD nations as well. The driving force of rising oil demand will continue to be the developing countries, particularly China, but we are becoming less concerned about the developed world. High inventories and OPEC spare capacity still remain a potential restraining factor on oil prices, but as demand continues to improve, we expect these both to be eroded to normal levels and markets to tighten accordingly.
*Reported Fund performance relative to its benchmark over the month was negatively affected by the timing differential between pricing of the Fund and its benchmark.