The core holdings in the Fund make up 27.8% of the portfolio. These are holdings in shares which we believe have strong and defendable franchises and understandable business models. These shares should create consistent shareholder return in the future. We've added SAB Miller to the core holdings recently. SAB Miller, the second largest brewing company in the world by volume, is currently the leading emerging market brewer with a strong focus on local brands within each individual market. SAB Miller believes that in the beer world, the real power brands with the bulk of the profit pools are the local champions rather than the international premium brands. In addition, SAB Miller's joint venture with Millers Coors will give them the ability to increase their margins through cost savings over the next few years. Other shares in this category include Afrox, British American Tobacco, Famous Brands, Hudaco and Richemont. The 'discount to intrinsic value' category comprises shares that trade at a reasonable discount to their intrinsic values. Currently 42% of the portfolio is invested in this category. The special opportunities category consists out of shares which trade at a discount to their fair values over the short term. 7.7% of the Fund's assets are invested in this category. The Fund has international exposure via its 20.9% investment in the Imalivest Worldwide Flexible Fund. This investment also gives the Fund a 0.7% exposure to foreign cash. In total the Fund has a 2.3% cash holding.

The core holdings in the Fund make up 25.8% of the portfolio. These are holdings in shares which we believe have strong and defendable franchises and understandable business models. These shares should create consistent shareholder return in the future. Shares in this category include Afrox, British American Tobacco, Famous Brands, Reinet and Richemont. The 'discount to intrinsic value' category consists out of shares whose share prices and intrinsic values are detached from one another in the short term. We believe that the discounts are due to current conditions and will rectify in the future. Currently 41.2% of the portfolio is invested in this category after adding Anglo American in the past month. The special opportunities category consists out of shares where we cannot necessarily justify valuation on historic performances. Vox Telecoms' is an example where the shares of the company, after the collapse of Dealstream, were sold down without any regard of the underlying fundamental value. 5.3% of the Fund's assets are invested in this category. The Fund has international exposure via its 20.9% investment in the Imalivest Worldwide Flexible Fund. This investment also gives the Fund a 2.5% exposure to foreign cash. In total the Fund has a 9.5% cash holding.

The core holdings in the Fund make up 20.5% of the portfolio. These are holdings in shares which we believe have focused and competent management, are conservatively financed and have understandable business models. These shares should create consistent shareholder return in the future. Shares in this category include British American Tobacco, Reinet, Richemont and Afrox.

The 'discount to intrinsic value' category consists out of shares whose share prices and intrinsic values are detached from one another in the short term. We believe that the discounts are due to current situations and will rectify in the future. Currently 33.8% of the portfolio is invested in this category.

The special opportunities category consists out of shares where we cannot necessarily justify valuation on historic performances. Famous Brands for example is exploiting a new market by setting up their successful SA Wimpy brand in the UK. This could lead to potential profits in the future of the company. Vox Telecoms' is another example where the shares of the company, after the collapse of Dealstream, were sold down without any regard of the underlying fundamental value. 8.3% of the Fund's assets are invested in this category.

The Fund has international exposure via its 17.4% investment in the Imalivest Worldwide Flexible Fund. This investment also gives the Fund a 6.1% exposure to foreign cash. In total the Fund has a 19.9% cash holding.

Despite the global credit crisis, SA's finance sector still contributed positively to GDP growth. However, a reduction in activities in the broader finance sector is expected as reflected in the slowing pace of private sector credit extension. Banks will be faced with balance sheet deleveraging and this may lead to some short term pressures. The Fund has 17.6% of its assets invested in the financial sector.

Digicor, a leading provider of innovative vehicle tracking and fleet management globally, has seen its share price halved in the past year. The reduction in share price does not reflect the underlying fundamental value of Digicor. Digicor's international footprint is expanding fast and the growing interest in vehicle tracking systems will create ongoing business opportunities in both the short and long term. The Fund invested 1.7% in Digicor. Reinet offers a discount exposure to British American Tobacco (BAT) and at the same time is trading at a substantial discount to its net asset value. We believe that this material discount is unjustified and hence increased our investment in Reinet. Currently the Fund has a 15.1% exposure to the consumer goods sector via Compagnie Financiere Richemont SA, BAT and Reinet.

The big unbundling of BAT from Remgro was treated as a dividend to give shareholders the tax advantage and hence the Fund rewarded unit holders with an extraordinary distribution of 9.61 cent per unit at the end of December.

I n South Africa the 2009 elections will frame the year ahead, but it will be under a cloud of economic anxiety and political turmoil. The improvement in the inflation outlook coupled with the general decrease in economic activity has allowed most central banks around the world, including South Africa, to cut interest rates. At the same time most countries including South Africa are embarking on a programme of increased government spending especially in the form of infrastructural development. The combination of further rate cuts and increased fiscal stimulus should provide the basis for a solid economic recovery. The Fund remains cautious with 26.9% in domestic and foreign cash holdings.