MLFG Merril.Ftse Gwt

    RNS Number : 0936I
  Merrill Lynch FTSE100 Stpd Gwth&Inc
  13 November 2008
   
    Merrill Lynch FTSE 100 Stepped Growth and Income Limited
    Investment Manager's Report
    Interim Management Statement
    For the period from 30th June, 2008 to 11th November, 2008
    Growth Shares
    The Growth Shares are designed to offer investors a capital growth amount of 70.00 pence per growth share and to return a capital amount
of 100.00 pence per growth share, as long as the Underlying Index has not fallen by more than 40.00% of the Initial Index Reference Level.
If the Index has fallen more than 40.00% an amount of 5.00% is reduced from 70.00% for each of the remaining six monthly periods (first six
month period ended on 16th December, 2002, and so on until 16th June, 2009) to the Final Reference Date.
    As of 11th November, 2008, the FTSE 100 Index closed at 4,246.69, a decrease of 34.27% from the level of the Index at the beginning of
the year and a 24.5% drop from 30th June 2008. The Net Asset Value of the Growth Shares was �1.50 as of 11th November, 2008, resulting in an
decrease of 4.45% for the period and a YTD decrease of 1.3% (relative to a Net Asset Value of �1.52 as at 31st December, 2007), and an
increase of 56% since inception (relative to the initial Net Asset Value of �0.96). 

    Income Shares
    The Income Shares pay a fixed dividend of 4.00 pence per Income Share, semi-annually in arrears as long as the Underlying Index has not
fallen by more than 40.00% of the Initial Index Reference Level at any time up to the close of trading on the Final Reference Date. If the
Underlying Index has fallen by more than 40.00% of the Initial Index Reference Level at any time up to the close of trading on the Final
Reference Date then all the subsequent coupons (4.00 pence) will cease after that date. 
    As of 11th November 2008, the FTSE 100 Index closed at 4,246.69, a decrease of 34.27% from the level of the Index at the beginning of
the year and a 24.5% drop from 30th June 2008. The Net Asset Value of the Income Shares was �0.90 as of 11th November, 2008, resulting in an
decrease of 9% for the period and a YTD decrease of 8.1% (relative to a Net Asset Value of �0.98 as at 31st December, 2007), and an decrease
of 6.25% since inception (relative to the initial Net Asset Value of �0.96). 



    Market Review

    The FTSE 100 Index followed the global decline in financial markets and closed at 4,246.69 at 11th November 2008. This represents a
decline of 24.5% from 30th June 2008 and at year to date decline of 34.2%.

    The FTSE saw little relief over the period with October being the worst performing month seeing a decline of 11.7% and the lowest level
of the FTSE in the period covered of 3,852.39

    The worst performing sectors within the index were, as expected, the Materials sector (-60%), Energy sector (-38%) and Financial sector
(-28%). A summary of the FTSE sectors is presented below

           Sector            % Movement
 Materials                      -60%
 Energy                         -38%
 Financials                     -28%
 Telecommunication Services     -23%
 Industrials                    -18%
 Consumer Discretionary         -17%
 Information Technology         -13%
 Consumer Staples               -7%
 Utilities                      -6%
 Health Care                     8%


    Within the Materials sector the biggest drops occurred in Kazakhmys plc down 82%, Eurasian Natural Resources down 80%, Xstrata Pls down
73% and Vedanta Resources Plc down 70%.

    The decline in the Energy sectors was led by Wood Group (John) down 52%, Tullow Oil down 50% and Amec Plc down 44%

    The financial sector did see some positive movements from stocks, Admiral Group (the largest gain for the period) up 32% RSA Insurance
up 11% and Standard Life up 9% however by far the majority of stocks were in decline, Royal Bank of Scotland down 73%, MAN Group down -64%
and HBOS down -63%

    Telecommunications recorded significant declines with BT dropping 44% and Inmarsat losing 25%.

    Consumer Discretionary was also heavily hit with Thomas Cook group recording a 30% decline. Consumer Staples were also not immune from
the decline with Sabmillier falling 22% and Imperial Tobacco dropping 13%. 

    Healthcare was the only sector to record positive growth for the period with Astrazeneca up 30% and Glaxosmithkline up 11%.


    All Enquiries:

    Fraser Hiddelston: +44 1481 745738
    Stuart Connor: Stewart_Connor@ml.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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