Up to the beginning of the 4th quarter 2010 the market was driven by tremendous uncertainty created by fears of double dip recessions and sovereign debt contagion. All of these fears subsided during the last three months as economic news flows were showing signs of recovery taking hold in all the major economies around the word. This sparked a rally in equities yielding a total return of 10.92% for the ALL SHARE in the 4th quarter.

With the introduction of QE2 in the US by the chairman of the Federal Reserve (Ben Benanke) world markets gained further positive momentum. Currently the strong rand is both a function of a weak US$ due to the extension of the quantitative easing program in the US and strong demand for emerging market equities. A strong currency weighs on the SA export market but shields the economy from inflationary pressures. This allowed the SA Reserve Bank to cut lending rates further and stoke economic growth.

The Efficient prudential fund maintained a bias toward an overweight position in equities and this paid off handsomely in the 4th quarter. The fund returned 15.56% for 2010.