Despite the worst quarter for equities since the bear market of 2002, RCBIM believes the UK stock market offers reasonable value at current levels, which we would expect to produce solid returns over the longer term.

The performance of our three largest clients is as follows. Our two largest ethically managed charities have outperformed their benchmarks during the total period of RCBIM's management: WM calculates Charity No 1 to the end of 2007 returned 275% against its benchmark of 189% since 1994. WM calculates Charity No 2 to the end of 2007 returned 82% against its benchmark of 62% since 1999.

Global growth has seen further consensus downgrades in the first quarter of 2008 as the US economy enters a recession and the ongoing reverberations of the credit crunch continue to impact the financial system. The UK consumer remains under severe pressure with rising energy and food prices. Many homeowners coming off fixed mortgage deals are likely to see a significant jump in interest rate payments as banks look to lend more prudently than in recent years. Particularly affected will be those who took out loans equal to or in excess of the value of their property. Coupled with an expectation of some selling by buy to let investors (some distressed sellers, others selling as a result of the changes in capital gains), house prices are likely to continue falling. Hence, in the short term, we anticipate consumer related stocks to find trading conditions tough. The impact of $100 oil on global growth should also not be underestimated.