This final update is extremely difficult for me to write. The excellent performance of the Fund over the last year has been eclipsed by the tragic news of Chris's death. The fund has now been fully liquidated and the process of winding-up the Fund and distributing the proceeds to investors has begun.

Following confirmation of the NAV for the 30th September I outline the performance history of the Fund from the start of the performance on 1st October 2005 to the month end NAV:

The total net return of the fund after all fees and expenses has been 42.4%, this compares favourably to the total return on the FTSE All-share of 10.8% over the same period. Lipper, Inc. have provided performance analysis showing that in the last 12 months the Fund was the best performing UK Equity fund from their universe of 1,907 funds and that since inception 4 years ago the Fund ranks 4th from 1,260 peers. The only reason for active fund managers to exist is to out-perform the market - the discipline of value-investing that we practised allowed us to do so.

In the 9 months of this year the fund has returned 97.4%. This excellent and unusually high rate of return is a function of the extreme market conditions we experienced in 2008. In the depths of the market in October and November we were resolutely positive because the market was offering so much value and we consistently said that solid companies were being priced ‘as if they were going out of business’. In the October update we said ‘we can confidently say that in our view, equities have not been this cheap for decades.’ In November we pointed out that ‘Buying market leading companies with low debt and for often less than their net tangible assets is an unusual situation which is rarely offered by the market.’

Just as important as recognition of a cheap market is recognising the symptoms of overvaluation and in May 2007 when we had 15% cash weighting, frustrated that we could not find many opportunities to invest we said ‘although we continue to search, we are finding more companies that are too expensive or “fair value” than we would like.’

Earlier than this in April 2006 I wrote a piece pointing out that ‘Increasingly highly leveraged deals are being discussed, with what appears to be little concern for the appropriate risk premium’ and ‘we have seen an increasing number of approaches to companies where we have felt there is insufficient upside to fair valuation for us to invest in’.

It has been a fascinating time to be investing in the market over the last 4 years and I hope that in a small way we have strengthened the case that focussed in-depth research generates rewards. Many of the ‘short-cut’ strategies pursued by money managers of a different ilk have suffered terribly from the volatility on which many claimed they would thrive.

Benjamin Graham described Mr. Market as a manic depressive over 50 years ago, and despite all the innovation of financial markets his underlying character remains just as skittish today. Investors who can separate themselves from being caught up in this behaviour significantly improve their odds of out-performing the market. Sceptre based its strategy on two premises which challenged convention investment wisdom: 'The market is not always efficient' and 'The secret to minimising risk is not diversification'. I wish everyone who has been involved with the company success in the future and hope that, together with the returns we have generated for our investors, we have done our part at chipping away the wall of ignorance that is conventional investment wisdom.

Please feel free to contact me if you have any questions,

Luke Howard Taylor