The third quarter of 2002 was characterised by a crisis of confidence in Corporate America, declining economic and profit growth prospects, poor investment sentiment and war talk. This resulted in global equity markets having their worst quarterly performances in 15 years with the US and European markets crashing 18% and the MSCI World Index loosing $2.7trillion of its value.

The fund declined in line with global markets but managed to out perform its benchmark MSCI World Equity Index by approximately 6% over the quarter. A higher than normal cash position, overweight in Asian Pacific markets and Consumer Staples and underweight positions in Medical stocks added to out performance.

Research suggests that industry-leading companies across many sectors are undervalued against their normalised earnings power and currently offer good opportunities for long term investing. The fund will continue to identify quality opportunities in global equity markets and aim to deliver above average returns over the long term.

The international markets continued to plunge in February as concerns over US technology related valuations spread into global concern as to whether the US can avoid a recession.

Negative sentiment in the US leaves no region unaffected, however the fund managerfs believe that European growth will prove to be more resilient leading to a gradual convergence in growth rates between Europe and the US.

The Asia Pacific region, traditionally harder hit in times of a US led economic downturn, has also been hit with a rapidly deteriorating Japanese economy.

Continued negative earnings announcements will prevent the market from starting its road to recovery however, once sentiment turns the fund managers believe a re-rating of quality growth opportunities will follow.

The fund underperformed the MSCI World benchmark index over the month but remains in line with the index on a year-to-date basis.

Global financial markets and companies are only beginning to come to terms with the new environment in which they must operate following the tragic events in the United States on 11 September 2001. Early economist forecasts have significantly downgraded world growth estimates and corporations are already realising that to continue to prosper, or even survive, they will have to radically adjust their structures to accommodate more difficult trading conditions ahead.

The SA rand and Namibian currency position hurt the fund over the period as both these currencies depreciated strongly.