Our new blog will give you a flavour of our thoughts and how this is being reflected in the portfolios of the retail funds and also to give some food for thought.
The market’s 10%+ correction since its 2010 high on 15 April has been driven by the fear of sovereign debt contagion leading to concerns that the euro and the monetary union are not necessarily the indestructible bonds that we once thought.

While the market has been led down by the miners following a period of stellar returns and concerns over the eurozone’s problems having a know-on impact on the global growth picture.  However, some of our more specialist plays fared better than the industry heavyweights.  Long time favourite Petropavlovsk (formerly Russian gold miner Peter Hambro) outperformed the mining sector by over 10% as the gold price continues to benefit from its safe haven status in uncertain times.
We continue to avoid mega cap oil with the UK Equity Fund completely out of BP and Royal Dutch Shell, where meaningful volume growth is very difficult to achieve favouring BG, Cairn and Tullow instead.

With the problems facing BP this has clearly been the right call.  But when the market marked the shares down significantly after the rig explosion in the Gulf of Mexico we did look at it feeling the reaction may have been too severe but decided to hold fire for a bit more clarity.  The risk for BP now is not the financial cost of putting the mess right but rather the longer-term reputational risk and damage to its brand, which could be significant.