The fund returned 2. 6% for the month, with the strongest performance coming from the Industrial sector.

The Resource component continues to be affected by the strong rand. Our largest holdings are concentrated in Billiton and Sasol, where the performance was -3.0% and -4.6% for the month. Currently, the Fund has no Gold holdings as we dislike the valuations of the Gold equities.

Our preferred rand-hedge exposure is Iscor, which returned 11.0% for the month. Our best performing Industrial sector has been Construction and Building, which returned 9.2% for the month. The macro backdrop of low interest rates, government spending and large potential infrastructure projects continue to support this sector.

The Retail sector where we have our largest Industrial exposure is also benefiting from the positive macro economic backdrop and returned 7.8% for the month. The companies continue to report positive trading conditions. Other stocks that performed well were Altron at 8.6% and Astral with 9.3%

The most positive contribution to the performance of the Fund has come from Capital Alliance, which returned 11.4%. The company recently reported good results and has a healthy dividend yield of 8%. Other financials that performed well were ABSA at 8.9% and Abil 4.8%.

Although short-term interest rates have probably bottomed we are encouraged by the healthy economy. Valuations also look attractive for companies exposed to the SA economy. So, for now, we will stick to our sector weightings.

This small fund has been a solid performer, rarely found outside the top quartile for the past three years. And it's one of only a handful of general equity funds to have shown positive returns during the past three months. There are no gold holdings, as the managers dislike the valuations of gold equities. The relatively low exposure to resources, coupled with some clever bets on banking shares, have helped it to out perform.

The Fund returned 0.6% for the month, with the strongest performance coming from the Financial sector.

The Resource component continues to be negatively affected by the concerns about global economic growth and the persistence of the strong rand. Our largest holdings are concentrated in Billiton and Anglo American, where their combined contribution was flat for the month. The Fund currently has no Gold holdings as we still dislike the valuations of the Gold equities.

Our preferred rand-hedge exposure is Iscor where the valuation is favourable on a plus 5% dividend yield and the possibility of a special dividend near the end of the year. Our best performing Industrial sector has been Construction and Building which returned 3.9% for the month. Construction demand is still buoyant in SA and, with government's drive to spend more on infrastructure, we still favour this sector. The Telecommunications sector also did well, returning 3.8%, but this was off a relatively lower base.

The most positive contribution to the performance of the Fund has come from the Bank sector where we have some 20% of the Fund invested. Good returns were achieved all around with ABSA returning 6.8% and Nedcor 14.4%, owing to the discounted rights issue at R45, which s beneficial for existing Nedcor shareholders. The other big performer was Abil which returned 9.4%.

The Fund had an excellent month, returning 2.06% versus the All Share return of -1.4%. The Resource holdings performed in line with its Index. The Fund's Industrial and Financial holdings performed strongly, contributing to the good outperformance. The Fund is positioned to take advantage of the increase in domestic demand brought about by a strong rand environment and low inflation and interest rates and this is reflected in the returns of the Industrial and Financial holdings.

The Fund's Industrial holdings returned 4.9% for the month. The strong rand, consistently low CPI and PPI figures (despite the slight increase in the February CPI numbers) and the relatively low interest rate has boosted consumer spending and domestic demand. This has reflected particularly strongly in the Construction, Food and General Ret ai ler holdings , as wel l as in the Telecommunications and IT sectors. Individual stocks that outperformed their sector indices were Omhold with 3.1%, Group 5 with 7.7%, Astral Foods with 16.8%, Tongaat with 11.8%, and Massmart Holdings and Truworths with 11.7% and 11.1% respectively. Spur performed very strongly for the month with a return of 9.6%, as did Astrapak with 7.9%. Telkom had another excellent month, returning 17.2% for the month against the sector return of 13.9% and in the Information Technology sector Mustek returned 8.7%, while Datatec was flat for the month, against its sector return of -11.7%.

In the Fund's Financial holdings Firstrand, in the Bank sector, and Abil, in the Specialty Finance sector, both returned 10.1%, against sector index returns of 4.9% and -2.4%. Overall the Fund's Financial holdings returned 3.1%.

The Prudential Optimiser's performance was sapped by its relatively low exposure to resources during January, when the rand depreciated by nearly 6% and gave the sector an unexpected boost. But fund manager Gary Quinn is optimistic about the outlook for the banking sector because it is cheap compared with other emerging markets.

The Fund returned 7.2% for December with good performance from all three sectors. The Resource and Industrial holdings returned 8.0%, while the Financial holdings returned 4.9%. The Fund remains underweight Resources, and overweight Industrials and Financials.

Billiton, which is our biggest holding in Resources, was our best performer returning 18.5%, followed by Sasol with 17.2%. Billiton benefited from strong commodity prices in copper, nickel, coal and oil, which remain strong. In addition, Billiton has one of the lowest exposures to rand strength, which has a negative impact for domestic-based commodity companies. With commodity prices strong, a weak US dollar and positive interest differentials, we think that it's too early to start buying rand hedges, especially given that valuations have not yet fully reflected the damaging effects of a strong rand.

Within Industrials the best returns have come from Datatec, which returned 36.2% for the month. Datatec was helped by the strong performance of global TMT shares and this was also the reason behind MTN's return of 9.5% and Telkom's 7.9%. The other Industrial sector that featured strongly was Basic Industries where Construction returned 14.3%, Iscor 23.3% and Omnia Holdings 13.5%. We are very positive about the Construction sector given low valuations and a domestic economy that remains buoyant. We feel that the short-term negatives from project delays are overstated.

The best performance in Financials has come from ABIL which returned 14.6%, followed by Standard Bank at 6.3%. We continue to expect good returns from the banking sector given the low bad debts, strong private sector credit expansion and cheap valuations.