If you looked at equity indices at the start and end of the month only you could be forgiven for believing that it had been a relatively quiet month. How wrong would that assumption be. At the beginning of the month, we saw volatility return at a level which had not been seen for some time. Indeed, in that first week we saw major indices fall anywhere between 4% and 20%.

The debate as to reason why may rumble on for some time. However, one of the key catalysts appears to be the divergence in monetary policy direction between the Bank of Japan and other major central banks. Whilst the Bank of England and European Central Bank have already cut, and the US Federal Reserve expected to do so imminently, the Bank of Japan caught the market somewhat off guard with a rate hike. Whilst the move was small, it was the hawkish statement which followed which unsettled investors. This induced an unwind of the carry trade, whereby investors had been selling yen and buying other currencies to invest in higher yielding asset classes. The central bank was quick to dampen fears and equity markets recovered. Many ended the month in positive territory, with only a few underwater.

August was a positive month for UK fixed income returns, relatively unflustered by equity market price action. No real change in credit fundamentals, along with an interest rate cut in the UK and expectations of more to come, meant markets were relatively calm in comparison.

The Fund outperformed the IA Flexible Investment sector average during the month, returning 0.23% and 0.20% respectively.

Further information about the fund can be found on the Fund's website MIDSF.com

This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.

The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.

The Fund is suitable for investors who are seeking to achieve long term capital growth.

The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.

Past performance is not a guide to future performance.