Defensive equity positions proved successful in 2004

Funds allocated to this sector manage a portfolio that may invest in any proportion in any asset class. Unlike other asset allocation categories, which provide a restriction on the level of equity exposure, the full flexibility allows full exposure to the upside in bull markets. Of course, this also means that during bear markets these funds are able to shelter full in fixed income or cash, thus to some extent insulating the fund from losses. During the year to 1 November 2004, the average return in the sector was 10.7%, down from 22.4% the year earlier. Returns during the last year are b...