Fund Review
The third quarter of 2011 started relatively upbeat, however, ended being the worst quarter since 2009. Over the period, in US dollar terms, the S&P500 index fell -14.3%, the Eurostoxx index fell 29.1%, the FTSE index fell 16% and our JSE All Share index fell 21.7%.
The quarter was dominated by a slowing U.S. recovery and debt ceiling squabbles in Washington which all culminated in the S&P downgrade of US debt. At the same time, Europe's debt troubles deepened, and more recently troubling signs emerged about China raising new doubts about future demand for commodities and other goods.
Despite evidence of "green shoots", risk aversion continues to dominate investors' behaviour, with a high probability of a Greek default. Risk aversion can be seen in continued dollar strength and impressive US and German 10Y treasury yields. In fact U.S. Treasury debt had its best quarter since the first quarter of 2008. US 10-year yields have tumbled 123bps during the quarter.

During the quarter cash produced returns of 1.40%, inflation linked bonds 3.04%, nominal bonds 2.80% and equities -5.84% as measured by the JSE All Share Index. During this period the STANLIB Dynamic Return Fund preserved capital with a distribution of 2.69 cents per unit.

Looking Ahead
In the short-term the markets will be dealing with a number of issues including the debt situation in Europe as well as US growth concerns. As demonstrated by the table above our fund is protected against downside risk. We remain positive that the equity market will deliver positive performance for the year supported by high-levels of liquidity. We remain positioned to participate in any positive rally.

Fund Review
Investors are plagued by uncertainty: default concerns in Europe - more recently specifically Greece, US growth and job creation, China growth, rising oil prices, food prices, the US debt ceiling, the end of QE2, supply chains - the list continues. The potential stakes are high. The second quarter of 2011 saw uncertainty and fear in the markets continue.

Looking Ahead
In the short-term the markets will be dealing with a number of issues including the debt situation in Europe as well as US growth concerns. Our fund is protected against downside risk. We remain positive that the equity market will deliver positive performance for the year supported by high-levels of liquidity. We remain positioned to participate in any positive rally.

Fund Review
A revolution in Egypt, rising oil prices amidst Libyan war, rising food prices and inflation fears and a tragic earthquake and Tsunami in Japan were some of the events that sparked fears in the markets in the first quarter of 2011.
As an indication of the market uncertainty the FTSE/JSE TOP40 Index delivered -1.7%, 3.3% and -0.1% in January, February and March respectively. Over the quarter to end March 2011, the index has delivered positive performance of 1.4% having been down as much as 5.3% and up as much as 4.3% during the quarter.
The STANLIB Dynamic Return Fund has delivered returns of -0.4%, 1.3% and 1.5% for the respective months of January, February and March.

Looking Ahead
There are a number of risks weighing on investor's minds at the moment. At the top of the list we have inflation concerns amidst the rise of the oil price as well as the impact of the end of QE2 (Quantitative Easing 2). Another key event to watch for pertains to potential debt-defaults in the Euro-zone.
Our fund positioning reflects a positive expectation with continuous protective structures to ensure cover against exogenous event risks.

Fund Review
In the last quarter of 201 0 we saw continued positive momentum in equity retums - the total retum on the All Share index amounted to 9.5% for the quarter and 19% for the year. The Dynamic Retum fund gained 4.5% for the quarter and achieved total retum of 14.1 % for the year - measured against a target retum for the year of 9.4%.

The fund performance remains a function of equity market performance. Our current equity positioning remains conservative with exposure mainly to the SWIX index.

Looking Ahead
The global eoonomy is still in recovery mode. In nearly all major economies growth has reverted to pre-crisis levels. Momentous policy challenges, however, still remain with policies being addressed to pursue these. Key investor questions for 2011 will be whether the economic recovery remains on track, potential debt defaults in the euro-zone, inflationary expectations and the impact thereof on interest rates, especially in the US and China. Our fund positioning reflects a positive expectation with continuous protective structures to ensure oover against exogenous event risks