In dollars the MSCI World Index produced a 9.6% return for the year and a -2.3% return for the quarter. The dollar washowever an underperforming currency during 2007, depreciating by 10.5% relative to the Euro. The Rand strengthened by 2.3% relative to the dollar for the year, and as a result the MSCI was only up 6.2% for South African investors. The dominant theme in the global equity market was the continued rally in emerging markets, particularly China and thegenerally subdued returns from the developed equity markets like the US and Japan. This dynamic shifted toward theend of the year as the possibility of a recession in the US loomed and tight liquidity in the credit markets threatened tocreate financial market havoc, resulting in a reduction in risk appetite. The US bond market was a major beneficiary ofthis in anticipation of further rate cuts to stimulate the US economy. As was the price of gold, which rose 31% during theyear on the back of inflationary fears. The Fund was ranked in the top half for the quarter and the year.

The Fund under performed the MSCI for the year after fees due to poor relative performance in the Funds Asian Pacific portfolio where it was under exposed to the good returns in Asia and over exposed to the poor performing Japanese market. All the other portfolios outperformed their respective benchmarks and were ranked in the top half of their peers,most notably the North American portfolio which was ranked in the top quartile for the year.

Currently global equities are capitulating and potentially for valid reason, but in this environment investors are generally rewarded with a good long term buying opportunity, the timing of which generally coincides with the point at which thenews flow is the worst. We suspect that this may be in the first quarter of this year.