The fund performed well over the month driven by strong equity markets both in SA and globally. SA Bonds also rallied strongly and the R153 long bond yields closed the month below 9%. The rand appreciated marginally against the US dollar and ended October at under R7/US$.

International economic data has become incrementally more positive, driven by low interest rates and signs of a recovery in business and consumer confidence.

The fund has increased its South African exposure and the volatility of the fund is expected to decline substantially due to fund construction activities. The fund has an absolute return focus and will aim to deliver positive returns over any rolling 12 month period.

Two major factors contributed to the performance of this Fund over the Quarter. Global Equity markets appreciated more than 5% in Dollar terms and the Rand strengthened by more than 6% against the US Dollar (resulting in lower Rand returns).

Economic data has become incrementally more positive, driven by low interest rates and signs of a recovery in business and consumer confidence. The Japanese market was very strong over the quarter and Technology stocks continued to perform well on a global basis.

The fund is increasing its South African exposure and the volatility of the fund is expected to decline substantially due to
fund construction activities.

Global markets rose again in June as the MSCI World Index rose by 1.72% for the month. Global liquidity remained robust as both the US Federal Reserve Bank and the European Central Bank lowered interest rates in June. The strength in the rand resulted in negative rand returns.

The Pacific Rim rose by 6% in June as money flowed into the region following months of relative underperformance. The technology and energy sectors each rose by 10%, followed by the materials and financial sectors, each rising by 9% for the month. Japan has risen by 19% from its 2003 nadir in late April through the end of June, and many of the Japanese financials, battered earlier in the year, rose by between 20%-50% in June alone.

The rand's strength again supported the fund's performance over the month as a substantial portion of the fund's assets is invested in the local market.

World Equity Markets remained very volatile during March but recovered from their lows after the successes of coalition forces in Iraq. Markets reacted positively on the fact that the war would end soon. The strong recovery from mid month resulted in equity markets ending flat to marginally up over the month. The Rand continued to strengthen and this resulted in negative Rand returns for investors with international exposure in whatever form.

The Fund continuous to hold around 20% in "non equity" investments i.e. cash. It also holds an marginal overweight position in South African currency and South African investments. Both these positions served the Fund well year to date as the Rand continues to strengthen and international markets continue to fall.

During March the international equity exposure has been increased by around 5%.

The Fund offers a portfolio of local and international investments and is mainly invested in Equity markets. The investor in this Fund gets a diversified portfolio of SA and international equity securities and has exposure to the main regions and sectors in the world.

Throughout 2002, global market declines was driven by various macro factors such as weak economic data, overvalued prices, tension in the Middle East, corporate accounting/governance issues, a lack of business confidence and spending, and fundamental deterioration at the company level.

A relatively weak dollar boosted international returns across virtually all regions. For 2002, euro, yen, sterling and SA Rand rose 18%, 11%, 10% and 28% versus the dollar. The slow economic recovery, deficit concerns, the stock market slump and bond yields at four-decade lows, crimped demand for US dollars. The deficit in the U.S. current account, the broadest measure of trade, held near a record high of $127 billion, equal to 4.8 percent of the country's gross domestic product.

On the other hand, the South African Equity market was one of the best performing Equity markets in the world and returned a positive 20% in Dollar terms. This was mainly driven by the very strong Rand, although the SA Equity market also showed a good relative performance.

The Fund out performed its benchmark index, by more than 7% in 2002. Global equity markets fell by 19% in US Dollar terms and the Rand strengthened by around 28% over the period. This affected the 45% international portion of the Fund.

The following actions drove the out performance:

The Fund's underweight position in Global equity markets (vs its benchmark) was beneficial to performance. Not only did a strengthening rand support local returns but the SA market declined much less that the US and European markets.

Furthermore, the large cash position (in excess of 10%) throughout the year supported the fund during times of falling markets. The international bond position added to fund performance and this position was closed down after a good run in bond prices. The money has been reinvested into equity funds.

The Fund offers a portfolio of local and international investments and is mainly invested in Equity markets. The investor in this Fund gets a diversified portfolio of SA and international companies and has exposure to the main regions and sectors in the world.

Rand strength or weakness will have an impact on the performance of this Fund over short term periods but the Fund is being managed with a longer term horizon.

Buys & Sells
No major Fund buys or sells occurred over the month. The sale of foreign fixed interest in October has been invested in international equity markets.

Performance & Reason
The higher than normal equity exposure helped fund performance over November as global equity markets performed well. The very strong Rand Dollar exchange rate affected the Fund's Rand performance negatively as 45% of the Fund is invested in foreign markets.

Outlook
The Fund offers a portfolio of local and international investments and is mainly invested in Equity markets at this stage. Rand strength or weakness will have an impact on the performance of this Fund over short term periods but the Fund is being managed with a longer term horizon.