Ashburton retains faith in equities for 2008

* Equities to outperform bonds

* Asian growth story remains intact

* Key investment themes for 2008: Infrastructure, agriculture and energy

* Outstanding performance of Ashburton Equity and Sterling Asset Management Funds

The consensus view for the year ahead and what it may hold for the financial markets is largely negative, with many expecting the USA to enter recession in the next few months, if not already. Ashburton, the Jersey based active investment manager, recognises that the current market concerns, but generally is less pessimistic and believes that when the consensus becomes this gloomy it can often make sense to adopt a contrarian position.

Ashburton views equity valuations to be at an attractive level, relative to government bond yields, and if profits were to come under pressure, it believes the equity market would have a firm underpinning from these valuations - particularly given that bond yields would fall further in a recession-type outcome. Furthermore, if the economy were to exceed expectations, equity markets will have plenty of scope to recover.

Building on existing expertise and an active, thematic investment strategy, Ashburton identifies infrastructure, agriculture, energy as key investment themes for 2008. Successful active management within these sectors has proved integral to the impressive performance of Ashburton’s Equity and Sterling Asset Management Funds over the last year, and further opportunities are foreseen going into 2008.

Source: Lipper as at 31 December 2007**

Commenting on the year ahead and Ashburton’s investment capabilities, Peter Bourne, (pictured right) managing director, said: “The reality of the sub-prime collapse and the ensuing credit crunch is inevitably taking toll on investor sentiment, and the fallout is likely to remain with us for some time. Indeed, 2007 may yet prove to have been a watershed as the excesses within the global economy and financial markets are increasingly purged by slowing economic growth and restrained consumer behaviour.

“But with this uncertainty, there also comes opportunity. Building on Ashburton’s impressive performance in 2007, we remain committed to equities as asset class of choice but retain a pragmatic view from a top down approach, recognising that there are major risks out there.

“The last year has been a successful one for Ashburton, with three of our regional equity funds receiving Standards & Poor ‘A’ ratings, and the signing of an exclusive partnership with Nordea, the leading financial services in the Nordic and Baltic Sea region, to advise and manage its European Alpha Fund. 2007 was also a good year for the Ashburton Chindia Equity Fund, a unique fund capturing the tremendous potential of China and India, which celebrated its first anniversary in December, the Fund has returned an impressive 51.77% by the end of 2007. Such achievements are testament to the investment expertise and skill of the investment team, and we look ahead to 2008 with optimism and promise, albeit through choppier waters.”