Yes Tom, the UK's had a couple of good years now. Personally I've seen around 28% gain in 05 and around 14% so far this year.
Interest rates look a cert to rise this Thursday to 5% from 4.75, but overall the markets not too hot, I estimate only around 6% to 7% above fair price levels.
There is some talk about dequity however. Pension funds moving out of the bond/equity typical balance into a wider spread of asset classes, so 2007 could turn out to be a good year to be holding a large cash holding.
On further reading through SGAM I wasn't too impressed. Looks like they hold back 50% of the fund value at the start of each month and use derrivatives to leverage up to an overall 200%, which means something like 400% scaling. Whilst they effectively guarantee that 50% of the fund will remain intact in any one month, it wouldn't take too much to knock the fund into an unrecoverable condition.
Regards. Clive.
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