Lincoln Far East Trust positioned to deal with inflation

With oil prices at elevated levels and food prices soaring, inflation is a key issue for global markets and in the Far East developed markets such as China and India in particular are suffering from inflationary pressures.

Mondrian Investment Partners comments: "Inflation is an increasing global problem now affecting countries including China and India who are seeing a challenging investment environment because of their link to the US dollar. Where these markets are linked to US monetary policy their interest rates are artificially low. This loose monetary policy promotes money supply growth which fuels excess demand and boosts inflation.

"However, we are starting to see some developments that may ease the impact of inflation in the Far East in particular the fact that the US dollar is already undervalued against the Euro and other major currencies means it is unlikely to fall significantly which should offer some stability to commodities that are priced in dollars such as oil and metals. We should also see food price inflation decrease as bumper harvests will release some of the pressures in agricultural commodity markets. The US Department of Agriculture for instance states that this years wheat crop with be at a record high.

"Our investment strategy is to continue a strong value stock orientation where we are underweight in the relatively overvalued markets such as China and India and overweight in some of the smaller Asian markets such as Malaysia and Thailand.

"We are feeling positive about the fund although there may be more volatility in the market going forward. The defensive characteristics of the fund have come through and we focus on identifying the right fundamentals and good value companies."

Stuart Tyler, Senior Investment Analyst at Lincoln Financial Group comments: "The Lincoln Far East Trust offers investors the potential upside of investing in the dynamic markets in the Asia Pacific region whilst at the same time protecting their capital. Considering the recent market conditions and increasing inflation, the defensive qualities of the fund are really adding value for investors at the moment. The trust has significantly outperformed its peers over the last six months since markets became more volatile and Mondrian's consistent and highly disciplined investment process is ideal in the current economic environment."