The Fund reduced exposure to equities slightly during the month, largely due to concerns regarding current valuations of global equities. This reduction has resulted in a larger exposure to the Orbis Optimal SA (US$) Fund. Nevertheless, the Fund remains considerably overweight Japanese equities relative to the benchmark. This overweight position comes mostly in the form of companies that are oriented to the domestic economy at the expense of the big exporters. Furthermore, strong performance in the Asia ex-Japan region has contributed to returns for the year. Orbis continues to find Greater China and Korean shares which offer superior investment opportunity when compared to the valuation and fundamental growth prospects of their global alternatives.

The Optimal SA Funds' strategy involves investing in equities and hedging out stock market exposure using futures. This results in a cash return plus any outperformance from Orbis' stock selections. The returns for the Optimal SA Funds are thus dependent on cash returns: the higher the rate, the higher returns tend to be. In the past 10 years, the US Dollar Bank Deposit rate has been as high as 6.7%; it now sits very close to zero. In this environment, the expectations for Optimal SA (US$) returns should be lower.

In terms of currency exposure, the Fund remains overweight the yen relative to the benchmark, despite having slightly reduced yen exposure over the month. The Fund is also overweight Asia ex-Japan currencies relative to the benchmark. The Fund is underweight the dollar and the euro.

The return for the 12 months to the end of September 2009 was 23.7% in US dollars versus the benchmark's 6.8%.

The performance of the Fund during the last three months has benefited from Orbis stock selection in the underlying Funds, as well as the higher overall exposure to equities.

The Optimal SA Funds have produced good returns in the second quarter, with the Orbis Optimal SA (US$) Fund returning 12.2% in dollars for the period. These returns can be attributed to Orbis' stock picking, and unhedged stock market exposure in Asia ex-Japan. Orbis' investment research continues to identify attractive opportunities relative to the market, which should in time reflect in the performance of the Optimal SA Funds.

In terms of currency exposure, the Fund remains overweight the yen relative to the benchmark, despite having reduced yen exposure over the quarter. The Fund is also overweight Asia ex-Japan currencies relative to the benchmark. The Fund is underweight the dollar and the euro.

The return for the 12 months leading up to the end of June was 2.7% US dollars versus the benchmark's -15.7%.

Despite a reduction in the exposure to Japanese equities, the Fund remains overweight Japanese equities relative to the World Index, and underweight US and European equities. The Fund is also slightly overweight Asian (ex-Japan) equities. The slight reduction in Japanese equities has resulted from the emergence of a number of excellent investment opportunities outside of Japan.

The Optimal SA Funds produced a positive return in March, helped by the long stock market exposure in Japan and Taiwan. Orbis have reduced the net long exposure of the Optimal SA Funds to Japanese equities to 6% following one of the strongest months on record for the Japanese stock market.

In terms of currency exposure, the Fund remains overweight the yen relative to the benchmark and underweight the dollar and the euro. The Fund is also overweight Asian (ex-Japan) currencies relative to the benchmark.

The return for the 12 months leading up to the end of March was -23.4% US dollars versus the benchmark's -28%.

The Fund remains overweight in selected Japanese companies, specifically domestically oriented companies which have of late benefited the Fund on a relative basis. The Fund has avoided the Japanese exporters and international conglomerates, which have not only been hurt by the global slowdown but also the strengthening yen.

The Fund remains overweight the yen and underweight the US dollar, pound and euro. The yen position has contributed significantly to performance over the year and while we remain overweight the yen in the Fund, the position has been reduced given the recent strength of the yen versus Western currencies.