Profit warnings from global companies tested the faith of equity investors in global central bankers over the past quarter as the effects of a global economic slowdown became more evident. While confirmation will be some way in coming, the latest release of the OECD Leading Indicator does give an indication that economic prospects are likely to improve in the medium term. On the local front the financial markets was dominated by the recent Rand weakness. Rand-hedge stocks performed well over the last quarter and the fund manager foresees further outperformance from especially the Resource stocks, if and when and upturn in global economies becomes more certain. Between the different equity sectors the fund manager retains the overweight position in Financials (mainly Banks) due earnings visibility and quality. The fund manager has increased or Resources weighting due to early signals of improving global economic conditions. On Industrials the fund remains tilted towards service orientated stocks and companies which are under a lesser tread of margin pressure because of the globalisation of the local economy and lower inflation environment. The fund manager remains cautious on TMT globally, as the fund manager believes that the over capacity currently in the sector will take some time to dissipate. Being an enhanced index fund, the Gryphon Imperial SA Tracker fund is more exposed to the larger more liquid stocks on the JSE.