Archived Monthly Report

REPORT TO THE UNIT HOLDERS IN THE ASPIRING FUND FOR THE MONTH ENDED 31/01/08

 

The Unit Price as at 1 February 2008 was 1.1143 after all expenses.

The performance for the month of January was  -7.4%  after all expenses.

At the beginning of February the fund's asset allocation was:



 

Cash   32%
NZ Equities    50%
Australian Equities                    18%

January 2008 proved to be one of the most testing months many investors have experienced. We have felt for some time that markets were due a correction but the speed and quantum of the January fall was a surprise.

The NZX50 fell by 9.2% and the Australian All Ords fell by 11.3%. Our return of negative 7.4% is disappointing to us but in the context of the worst single month for markets in 20 years it is not surprising. Our cash holding provided some protection but the large falls in many mid caps we own negatively affected our performance.

A number of our core long-term holdings in the mid/small cap area suffered from "the sell at any price" syndrome and we took the opportunity to buy shares in three of these companies from distressed or impatient sellers. Taking such opportunities is another advantage of being reasonably cashed up.

We obviously cannot be certain that the market weakness has run its course, but we believe that for those investors with medium term time horizons the current market will provide some rewarding opportunities. From a bottom-up perspective there is good value in many stocks, although from a macro economic view the problems of the US financial and consumer sectors suggest a cautious stance is still prudent.