
Ordinary Shares

Price (p)	149.00
Published NAV	170.30
Yield	3.89
Discount	-13.91

Prices correct as of close 2010-09-06. Last Published NAV is as at the previous business day. Source: Trustnet

Sigma Shares

Price (p)	66.70
Published NAV	88.10
Yield	3.00
Discount	-24.69

Prices correct as of close 2010-09-06. Last Published NAV is as at the previous business day. Source: Trustnet

For Sigma Shares

December 2008
Pan European real estate finished a dismal year with a positive month when returns are viewed in local currency. EPRA Europe ex UK rose +5.5% (in EUR) and the UK +0.71% (in GBP). However, the month was dominated by unprecedented currency movements with Sterling’s weakness against all European currencies accelerating dramatically in the month. As a consequence the fund’s benchmark, FTSE EPRA/NAREIT Europe (in GBP) rose +14.88% with Europe ex UK up +22.04%, a record breaking month. This end of year recovery sadly doesn’t cover the industry’s blushes. The calendar year return of the benchmark totalled a fall of -32.34%. In Euro terms it was -48.59%. Sigma’s portfolio remained highly defensive through December. Although December saw a relief rally across many sectors, which touched on real estate, we view such optimism as premature. Central banks must continue to do all they can to encourage the banking sector to once again lend to each other and to corporates. This credit drought headwind has been with us for some time and much commented on. It is now joined by the self-fulfilling recessionary spiral of declining consumer confidence, reduced spending and deflationary pressure. Further sales of £1.9m lifted net cash close to 18.3% of NAV at the year end. The fund outperformed the benchmark during December by 100bps reflecting the fact that virtually all of Sigma’s cash was held in Euros. The fund is underweight Continental European stocks and holding cash in Euros effectively enabled the fund to have a Euro overweight. This long Euro position was neutralised during the month. The general pattern over the last 18 months of this bear market has been for smaller caps to underperform larger caps. This was not the case in December. Indeed 17 companies (of which 16 had a market cap of less than £1bn – our definition of small cap) made intra-month gains of over 20%. Any acquisitions have been focused on stocks which have little or no refinancing in 2009 as well as debt structuring which we view as appropriate.

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