Suits investors looking for long-term capital growth from the Continental European region. Its small-to-medium company bias means that it suits more experienced investors who are looking to add a more dynamic risk/reward exposure.

The Trust finds exciting growth opportunities within small and medium sized companies and many of these companies trade internationally. In addition it has some exposure to emerging Europe.

• The Trust invests in smaller, less well known European companies from very well known Western European countries.
• The stock-picking skills of the manager are ideally suited to seeking growth opportunities which exist even in an uncertain environment.
• The Trust targets companies with a strong competitive position in niche markets.

• Investors need to be aware of exchange rates. Most of the investments in this portfolio are not made in Sterling, so exchange rates could affect the value of and income from your investment.
• Most of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies. Full details of risks.

The overriding theme in April was parliamentary elections, as the discontent of Europe’s voters became apparent at the polls. After seeing new governments in Ireland, Greece, Italy, and Spain it is now the turn of the French, where it looked increasingly likely that we will see a new socialist government, this became reality in May as François Hollande has become the first Socialist president since 1988. The main point of contention is how to generate growth while simultaneously pursuing austerity. Our view is that Germany may have to relax its dogmatic rhetoric and accept that a trade-off needs to be made to avoid prolonging recession. Merkel will be reluctant to upset her electorate but if they do it would be good for equities. Small caps performed largely in line with their large-cap peers.

During April the Trust performed broadly in line with its benchmark index. A notable negative was Inside Secure, a recent initial public offering (IPO) that specialises in near-field communication (NFC). The share price was hit following a poor trading statement . We believe its potentially large market share in an area that will see tremendous growth should see them win new contracts. Faiveley Transport was also a detractor as it had problems with a platform door project in China. On the positive side, Ferragamo responded well to the successful IPO of a peer. Delonghi won the rights to use the Braun brand name, which we expect to cause an increase in sales outside of its core coffee machine products.

Activity over the month included the purchase of Zumtobel which offers lighting solutions and trades at an attractive valuation.

Earnings season has been mixed so far in the Trust, with a general theme of US-exposed stocks doing well. The heavy political calendar will bring volatility, however we feel we are positioned correctly to make good gains.

Ollie Beckett
April 2012