Data released during the month confirmed that the US economy is slowing. US inflation data is however yet to turn down and this remains a looming risk. Across the rest of the globe, economies continue to grow strongly with inflation rising - spurring central banks to hike interest rates further. The balance of these factors is expected to slow global growth into 2007, generally a negative factor for equity markets and commodities. Although equity markets preferred to concentrate on the "no more interest rate hikes in the US" factor, commodity prices felt the pressure of future slower growth and therefore future lower demand. The oil price specifically took a vicious knock, falling by 12.6% during the month. The oil price is now 4.7% lower than the level of September 2005. Platinum and Gold also felt the pressure, dropping by 8.4% and 4.5% respectively. Emerging markets lagged the rally in developed markets. The MSCI Emerging market $ index rose by 0.7%. A slower global economy and falling commodity prices are large negatives for emerging markets.

The Select Manager Global Growth FoF returned 8.66% for the month. Approximately two thirds of this return was driven by currency depreciation during the month.

The outlook for global growth remains uncertain against the backdrop of further interest rate hikes by the majority of developed markets. During times of uncertainty, global risk appetite falls, leaving emerging markets like South Africa vulnerable. We would therefore expect volatility to remain elevated and a cautious approach is therefore still prudent. At the beginning of June we reduced the equity exposure within the fund by 10%. This was implemented to increase the protection component within the fund against the backdrop of global uncertainty. During July we reduced the exposure by a further 5%. The equity exposure of the fund is therefore currently 61% with 16% in short term fixed interest instruments.

The Select Manager Flexible Growth FoF returned -0.33% for the month of July. The BlueBay Visio Actinio portfolio returned a very solid 1.09% for the month. The Stanlib Income fund was a valuable contributor, returning 0.63%.

Global equity markets ended the quarter with strong positive returns, posting the best quarterly result for many years. In fact a large number of global equity markets are at or near 5 year highs. Again it was the European and Asian markets which outperformed the US market. The Dow Jones Euro Stoxx 50 index returned in excess of 10% for the quarter. Japan posted a strong return of 5.3% for March after a sharp correction in February. The MSCI AC World $ Index has returned 20.3% for the 12 months to the end of March. Earnings reports released during the quarter and a large number of sizeable merger and acquisition deals have supported the move in equity markets.

During the month a strategic asset allocation change was implemented to the Select Manager Global Growth FoF. Based on our outlook for positive relative returns from international equity markets versus international bond markets over the next 3 years, we decided to increase the equity component of the fund to 60%. The bond and absolute components were reduced to 20% each. The revised Model Portfolio for the fund is displayed above.

The new asset allocation made a positive contribution to the fund during March. The underlying funds performed well with the strongest returns coming from the Odey Pan European fund. The fund returned in excess of 3.4% for the month. The Select Manager Global Growth FoF’s returned 0.45% in Rand terms for March.

December was another good month for equity markets. European markets posted strong returns in excess of 3% whilst Japan shot the lights out with an 8.3% return. Against this backdrop the US market delivered a disappointing flat (0.03%) return. The JPM Global Government Bond index returned 1% for the month. Throughout the year the high liquidity levels present globally supported markets. The S&P 500 returned 4.9% for the year (a rise of 20.2% in euros) whilst MSCI Europe returned 25.5%. The Japanese equity market was the best performing developed market as the Nikkei returned 40% for the year. The MSCI Asia Pacific ex Japan reflected the strong performance of the Asian economies, returning 38.6%. Other emerging markets also performed exceptionally well, with the MSCI Emerging Markets index returning 56.4% in euros for the year, as equity investors' continued risk appetite fed through to less exploited opportunities in developing markets.

The underlying funds' positive returns on the month were negated by the strength of the Rand over the month. The Rand gained by 1.8%, 2.2% and 2.5% against the US Dollar, Euro and Pound respectively.

The Select Manager Global Growth FoF's returned 9.1% for 2005.