The funds equity component (-9.9%) was marginally better than the All Share Index (-10.1%). Positive relative contributors to this performance are: The funds slightly under-weight position in the Resources sector, which had a better relative performance(-5.0%). The fund was however overweight in Resources relative to its peers. The funds resources component performed better as a result of its lower weighting in mining finance. The overweight position in Financials, with a return of -10. 3% was marginally better than the index return of -10.5%. There were weak performances from Information Technology , Cyclical Consumer Goods and Non Cyclical Services.

The bond exposure was maintained at an underweight position, to reflect the expectation of high inflation.

Foreign exposure was maintained at maximum levels. Within this exposure the fund was and remained materially underweight foreign equity resulting in a reduced exposure to the weak international equity performance of the quarter. The main objective of this exposure is to diversifying currency and country risk. No funds had to be repatriated to comply with AUT rules.

The focus of the fund would remain on the local equity market, where we expect superior returns for the next twelve months. The equity portfolio is overweight in the Financials and slightly underweight Industrial and Resources sectors in line with risk return expectations.

The funds equity component (-0.48%) out-performed the All Share Index (-2.7%). Positive relative contributors to this performance are: The funds underweight position in the Resources sector, with its strong gearing to Rand strength and concerns over the sustainability of a recovery in commodity prices. The fund was however overweight in Resources relative to its peers. The funds resources component under-performed as a result of its underweight position in gold. The overweight position in Financials, with a return of 12.9% against the index return of 7.9%, made a valuable positive contribution. This especially came from a recovery in Life Assurance. Industrials out-performed the Index with positive contributions from Diversified Industrials, Cyclical Services and Non Cyclical consumers. Weak TMT share prices resulted in a negative contribution.

With bond rates remaining at low historic levels, our bond exposure was maintained at an underweight position, to reflect our expectation of limited remaining returns.

Foreign exposure was maintained at maximum levels. Within this exposure the fund was and remained materially underweight foreign equity resulting in a reduced exposure to the weak international equity performance of the quarter. The main objective of this exposure is to diversifying currency and country risk. No Funds had to be repatriated to comply with AUT rules.

With limited returns expected from the fixed interest assets, the focus of the fund would remain on the local equity market, where the fund managers expect superior returns for the next twelve months. The equity portfolio is overweight in the financial and slightly underweight industrial and Resources sectors inline with our risk return expectations.

The fourth quarter 2002 characterised by doom and gloom with high uncertainty has turned into a quarter of an expectation of recovery with less uncertainty. The world economic slowdown is expected to bottom out during the second quarter 2002 supporting the start of a recovery in commodity prices.

Despite the 11.4% strengthening in the Rand, the Resources Index continued it’s out-performance of last year against the Financials and Industrials Indexes. Expected returns for equities edged up during the quarter while bond returns came under pressure with increased local inflation fears. Our overweight position in equity was maintained based on this relative return expectation.

The funds equity component (0.83%) under-performed the All Share Index (5.6%). The main reasons for these are: The funds underweight position in the Resources sector, with its strong gearing to Rand strength or weakness and the recovery in commodity prices. The fund was however overweight in Resources relative to its pears. The funds resources component under-performed as a result of its underweight position in gold. The overweight position in financials, especially Banks and Life Assurance contributed negatively. Industrials under-performed the Index as a result of weak relative TMT, Beverage, Transport and Diversified Industrials performance. With bond rates remaining at low historic levels, our bond exposure was maintained at an underweight position, to reflect our expectation of limited remaining returns.

Foreign exposure was maintained at maximum levels, enabling the fund to benefit from the recovery in the world equity markets and weaker Rand exchange rates, while diversifying currency and country risk. Funds had to be repatriated to comply with AUT rules.

With limited returns expected from the fixed interest assets, the focus of the fund would remain on the local equity market, where the fund manager expects superior returns for the next twelve months. The equity portfolio is overweight in the financial and slightly underweight Industrial and Resources sectors in line with our risk return expectations.

The Metropolitan Prudential Managed Fund maintained its foreign exposure at maximum levels which enabled the fund to benefit from a recovery in world equity markets and weaker Rand exchange rates. The fund will remain focused on the local equity markets in light of the limited returns expected from the fixed interest sector. Financial and industrial sectors is were the largest part of the performance is expected and so the equity portfolio will be overweight in these sectors.