nvestec Worldwide was an eclectic fund once, when it was run by Gail Boon (now Daniel): at a certain stage its largest holding was, of all shares, Tommy Hilfiger.

It is now a much more conventional institutional-style fund, run by the London team, with more predictable blue chips such as Credit Suisse, Deutsche Bank and Toyota. The fund works off the proprietary stock scoring tool called Sigma. Such tools are all the rage in London: Artemis, one of the most successful UK retail fund managers, has a similar tool it calls Smart Garp, which, like Sigma, puts the emphasis on earnings revisions and share momentum.

These black boxes are supposed to replace the armies of analysts that firms such as Fidelity and Capital Group employ. Investec Worldwide is now a feeder fund into the Investec Global Equity Fund, which is neutral at the macro-sector level (between resources, financials and industrials), but is otherwise run entirely on a bottom-up stockpicking basis which will lead to certain subsector biases. It had a strong third quarter with its underweight positions in banks and telecoms - which did badly - and overweight holding in oil and gas. October proved to be much tougher as these positions reversed.

Portfolio manager James Hand said certain special situations helped - for example, it held oil share Paladin, which did not fall in tandem with other oil shares as it was taken over by Talisman Energy. Hand says that even though markets have been under pressure, the underlying results from companies were solid and most companies continued to beat the market's earnings expectations.

The fund has a somewhat contrarian overweight position in insurance, as it believes there will be continued strong premium growth and better underweighting ratios - Hand assumes companies with exposure to the recent hurricanes are adequately reserved.

Recent purchases have been Nestlé and the Malaysian conglomerate Genting, while security company Group 4 and Japanese noodle company Toyo Suisan were sold. Pharmaceutical holdings are being increased.

Financial Mail - 09 December 2005

Global markets made impressive gains in the third quarter driven by strong company earnings, positive economic data form the US, corporate activity and a revaluation of the Renminbi. This strength was in spite of terrorist attacks in London amongst other places, and fears of the increasingly painful cost of record high energy prices. The MSCI Index rose 7.1% in US dollar terms, reflecting positive moves for most of the period, except for weakness in the second half of August. The Rand appreciated 5.0% against the dollar during the quarter, reducing the Rand MSCI World Index return to 1.9%.

During the quarter all geographies performed strongly, as did all sectors. Continuing the theme of the past year, the MSCI World Energy sector rose a substantial 19.6%. Other highlights were the MSCI World Materials sector which rose 15.6% and the worst performing sector was the MSCI World Telecoms which still rose 4.6% in US Dollar terms. Markets performed well in July, in spite of the terrorist attacks in London, continuing the rally that started in May. This performance was driven by a number of factors. Corporate earnings were especially strong in the US, where over 70% of companies reported ahead of expectations. Furthermore, economic data continued to surprise especially in the US with durable goods orders, the ISM index and retail sales all stronger than expected. The revaluation of the Renminbi by 2% was important from a symbolic respect, since it reduced speculation of a trade-war between China and the West, giving a boost to exporters to China.

Global markets weakened in August due to investor concerns of the impact of record high energy costs squeezing corporate profitability and dampening consumer demand. Poor economic data during August compounded these concerns leading to higher conviction that the earnings momentum cycle had peaked. Consequently there was a shift away from higher risk areas of the market. Fickle as the markets can be however, with resumption in positive corporate earnings and take-over activity, confidence soon returned to the markets in September as investors began to look to the longer-term and through the oil price rises.

The Investec Worldwide Equity Feeder Fund is a specialist equity fund invested in shares listed worldwide. Besides providing investors with a In US Dollar terms the Global Equity Fund rose 8.7% during the quarter, compared to its benchmark, the MSCI World Index which was up 7.1%.

This out-performance was due predominantly to the Fund's underweight in banks and telecom carriers which performed poorly during the period, and the over-representation in Oil & Gas which performed very strongly. The Fund's strategy is to focus on high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention. We have an overweight position in Insurance where a combination of a strong premium growth environment combined with improving combined loss ratios (lower cost of claims) is providing strong earnings enhancement opportunity. Our holdings such as Baloise, Zurich Financial Services and SAI-Fondiaria also have restructuring potential and holdings such as Allstate are benefiting from the secular strength in their niche markets, such as US auto insurance. These stocks are generating strong cash-flows due to the positive environment, and are as such undervalued. Our largest underweights are, as always, in sectors where there are relatively few stocks exhibiting these attractive characteristics, being in particular the Diverse Industrials and Banks

The fund takes a purely bottom-up approach, using Investec's proprietary Sigma stock-screening tool. The style is a curious blend of share momentum and a more traditional value approach. It has benefited from a high exposure to oil and gas shares, such as Exxon Mobil and Burren Energy, and pharmaceuticals, such as J&J and Pfizer, as these were the two best-performing global equity sectors.

Financial Mail - 12 August 2005

Global markets ended the quarter relatively flat with the MSCI World Index up 0.6% in US Dollar terms, although this masks the volatility during the period with the Index down as much as 3.2% in US Dollars at the end of April. The Rand depreciated 6.9% during the quarter versus the US Dollar, giving a Rand return of 7.5% in the MSCI World Index.

Overall in the quarter the Oil & Gas, Pharmaceuticals and Utilities sectors performed strongly with the MSCI World Energy, Health Care and Utilities sectors up 4.1%, 4.2%, and 6.2% in US Dollar terms respectively whilst nearly all other sectors saw declines. Of particular note was the weakness in the MSCI World Materials sector (-5.4%) as investors became cautious on many economically cyclical areas. Key macro developments during the period were the continued appreciation of the US Dollar, many commodities including Oil reaching all time highs, political uncertainty in Europe and conflicting signals as to the health of the global economy.

The US Dollar strengthened as the carry trade unwound (investors repaying low cost US Dollar deposits) and the deceleration in the economies of Europe was set against the resilience of the US economy. Furthermore, the euro has suffered from political uncertainty in Europe following the resounding 'non' and 'nee' votes in France and the Netherlands in the referenda on adopting the EU constitution. There has been a noteworthy shift in global macro-economic focus, from the unsustainable structural imbalances in the US economy (the record deficit in the balance of payments and dangerously over-extended consumer) to the apparent slowdown in the Eurozone.

The Fund's strategy is to focus on high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention. We have an overweight position in Insurance where a combination of a strong premium growth environment combined with improving combined loss ratios (lower cost of claims) is providing strong earnings enhancement opportunity. Our holdings such as Baloise, Zurich Financial Services and SAI-Fondiaria also have restructuring potential, and holdings such as Allstate are benefiting from the secular strength in their niche markets, such as US auto insurance. These stocks are generating strong cash-flows due to the positive environment, and are as such undervalued. Our largest underweights are, as always, in sectors where there are relatively few stocks exhibiting these attractive characteristics, being in particular the Diverse Industrials and Banks.

The Investec Worldwide Equity Feeder Fund fell -6.5% in Rand terms over the month, compared to a -4.3% fall in its benchmark, the MSCI World Index. The relatively poor performance was due largely to the shift in the market risk profile detailed above. Specifically, the out-performance of larger stocks, underperformance of less liquid emerging markets, and sectoral shift toward defensive earnings were costly. The impact was most acute in Banks (focus on smaller banks), and Pharmaceuticals (underweight large capitalization). Furthermore, performance was negatively impacted by the shift away from the cyclical Construction and Steel sectors, and toward Utilities, the latter being an area where the Fund is underrepresented.

Global equity markets were this month strained by a deteriorating economic outlook in most geographies, and several earnings disappointments from bell-weathers IBM, Ford and General Motors. Cutting through the noise of several adverse headlines, the earnings season has once again been stronger than expected leading to continued upward revisions in aggregate global earnings forecasts. Furthermore, whilst recent share price weakness has driven down all regional equity indices, the long-term technical trends as measured by moving averages are still in place. Valuation remains attractive in many segments of the market, and near all time cash-flow return levels confirm the current strategic strength of global corporates. In summary therefore, with earnings continuing to be revised upwards, reasonable valuations and long-term share-price momentum still in an uptrend, we remain positive overall on global equities.

The Fund's strategy is to focus on high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention. Recent sectoral moves include a shift to overweight pharmaceuticals for the first time in many years. This is due to signs of fundamental improvement at many of the majors due to a combination of strong cost cutting and a more favourable regulatory environment.

The largest sector bet is in Specialty Finance due to holdings in investment banks Goldman Sachs, Lehman Brothers and Bear Stearns as well as Deutsche Bourse, the German stock exchange. These holdings all exhibit strong earnings dynamics, good value, and can make impressive cash flow returns due to their market positioning. Our largest underweights are, as always, in sectors where there are relatively few stocks exhibiting these attractive characteristics, being in particular the Banks and Diverse Industrials sector.

March was a difficult month for world equity markets in local currency terms, with all regions making losses. The MSCI World declined -1.9% in USD Dollar terms, however due to the 7.3% depreciation of the Rand during the month, the Index was up 5.4% in Rand terms. Returns were relatively concentrated across geographical regions in US Dollar terms with the S&P500, MSCI Europe, FTSE 100 and TOPIX indices down -1.8%, -2.5%, -2.7%, and -1.5% respectively. In Rand terms these markets posted positive returns of 5.5%, 4.8%, 4.6%, and 5.8% respectively.

Oil prices rose strongly during the month with Brent crude rising from $49 to $53, raising inflationary fears. The US economy continues to be strong fuelled primarily by the ever credit hungry consumer, confirmed by February's US retail sales figures, which contributed to the Fed's seventh consecutive monthly rate rise by 25bp to 2.75% The structural imbalances continue to grow with the current account deficit rising to 6.3% of GDP from 5.6% the previous quarter, and high government and consumer borrowing deficits. In Europe, confidence indicators remain weak with the purchasing managers index remaining low, and the recent rise in the Euro and oil price rises suggesting a renewed deterioration in the short-term.

The Investec Worldwide Fund rose 3.2% in Rand terms over the month, compared to a 5.4% performance from its benchmark, the MSCI World Index. The relatively poor performance was partly due to a retrenchment in several areas that had contributed to the very strong February 3.1% outperformance (Construction and Steel), and also due to the poor performance of our emerging markets holdings, and poor stock selection in Banks, Construction, Diverse Industrials and Pharmaceuticals.

The Fund's strategy is to focus on high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention.

We have an overweight position in Specialty Finance. These holdings all exhibit strong earnings dynamics, good value, and can make impressive cash flow returns due to their market positioning. Our largest underweights are, in the Diverse Industrials and Electricity sectors.

Effective from 1 April 2005, the Investec Worldwide Fund has changed its name to Investec Worldwide Equity Feeder Fund.

The Investec Worldwide Fund underperformed its benchmark, the MSCI World Index over the month of December, with a return of -0.3% versus +0.9% respectively in Rand Terms. This was due primarily to the weakness in the Oil & Gas sector, where the Fund has a large overweight (Chesapeake Energy, Petrokazakhstan, Apache Corp, Petrochina, XTO Energy), and weakness in one particular holding in Transport (Teekay shipping).

The economic outlook is uncertain with a host of major factors overlapping from last year including the US budgetary and trade deficits and the subsequent pressures on the US Dollar, the inflationary developments through the major economies and the corresponding monetary response of central banks, and the influence of a weakening in commodity prices. Early signs are for a reduction in global GDP forecasts, and the earnings season will give an early indication on the extent to which this feeds through to earnings. This being said, global markets remain strong from a technical perspective, with many indices making recent highs.

The Fund's strategy is to focus on high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention. The Fund has an overweight position in construction where strong earnings dynamics are associated with excellent value, and in health stocks where valuation combined with very strong cash flow returns continue to be attractive. The overweight in Oil and Gas remains, but is subject to review, as the fundamental outlook is showing signs of weakening as a result of the decline in the oil price, and this reflected in the share price technicals. Our largest underweights are, as always, in sectors where there are relatively few stocks exhibiting these attractive characteristics, including diverse industrials, food producers, electric utilities, media and chemicals.