The STANLIB Flexible Income Fund returned 4.89% for the year ending 30 September 2006. The Fund is classified in the Fixed Interest Varied Specialist category. Trades for the third quarter ending 30 September 2006, included the purchase of longer dated money market assets at higher yields. Exposure to parastatals was switched through the sale of short dated Telkom paper and the purchase of short dated Eskom paper. Purchases of corporate paper consisted of MTN. Sales in corporate paper included Standard Bank, Absa, Firstrand, African Bank, Liberty and Momentum. The exposure to floating rate notes was also increased, mainly through various vehicle and mortgage securitisations transactions from the major financial institutions. Exposure to property was increased as valuations became attractive against long bond yields.

The exposure to preference shares was slightly reduced during the quarter. During the quarter the SARB MPC increased the Repo rate by 50 basis points to 8.00%, with a negative stance towards future monetary policy. The SARB maintained their negative outlook on inflation and consumer spending. The rising current account deficit was highlighted as one of the major risks to the currency and inflation outlook. The money market reacted negatively to the news, with the 12 month NCD rate rising from 8.50% to 9.35% during the quarter. The bond market remained more subdued with the RSA 2015 moving sideways from 8.65% at the end of June to 8.63% at the end of September. There is a big divergence between the short and long dated fixed interest markets, with the money market curve steepening and the bond yield curve flattening. Oil prices receded during the quarter, but it was offset by further Rand weakness. The SARB will be monitoring all these effects closely, especially consumer spending and credit growth. Monetary policy is expected to remain hawkish for the moment, with a high probability ofmore interest rate increases to follow.

Modified Duration: 1.2 years

The Stanlib Flexible Income Fund returned 5.0% for the year ending 30 June 2006. The Fund is classified in the Fixed Interest Varied Specialist category. The Fund attracted good inflows of R94m during the quarter. Trades for the second quarter ending 30 June 2006, included the purchase of longer dated money market assets at higher yields. Exposure to parastatals were decreased through the sale of Eskom paper in the long end of the yield curve. Purchases in corporate paper included Standard Bank, Nedbank, Firstrand and Momentum. The exposure to floating rate notes were also increased, mainly through various vehicle and mortgage securitisations transactions from the major banks. Exposure to property was decreased as valuations became expensive and reduce risk to the Fund. No additional exposure to preference shares were added during the quarter. During the quarter the SARBMPCincreased the Repo rate by 0.5% to 7.5%, with a tightening bias towards monetary policy. The SARB also increased their outlook for inflation to above the inflation target band for early 2007. The money and bond markets immediately reacted, pricing for more rate increases this year. The 12 month NCD rate increasing from 7.3% to a high of 8.7%, closing the quarter at 8.5%. The R153 RSA 2010 bond, trading from 7.3% to a high of 8.9%, closing the quarter at 8.55%. The yield curve flattened substantially as the short end of the curve priced for rate increases in the short term. With the continued high oil prices and the sudden weakness in the Rand, the risks to inflation remain to the upside. The SARB will be monitoring all these effects closely, especially the second round effects of inflation on major items in the inflation basket like food. Monetary policy is expected to remain hawkish for the moment, with a high probability of more interest rate increases to follow. Modified Duration: 1.5 years

The STANLIB Flexible Income Fund returned 9.2% for the year ending 31 March 2006. The Fund is classified in the Fixed Interest Varied Specialist category.

The Fund attracted good inflows of R51m during the quarter. Trades for the first quarter ending 31 March 2006, included the purchase of Eskom paper in the long end of the yield curve. Purchases in corporate paper included Standard Bank, ABSA and Imperial Bank. The exposure to floating rate notes were also increased, mainly through the vehicle loan securitisations of Standard Bank and Wesbank. Exposure to property was added through a placement of Apex properties. The exposure to preference shares was diversified through purchases of Grinrod and Steinhoff preference shares.

During the quarter the SARB MPC kept the Repo rate unchanged at 7.0%, maintaining a neutral monetary stance. The high private credit numbers as well as continued high oil prices were cited as risks to inflation. During the quarter the current account deficit also emerged as a potential threat to currency stability. High commodity prices continued to support the Rand. The money market curve normalised over the quarter as the SARB Governor once again signalled a negative outlook for interest rates. The 12 month NCD rate opened the year at 7.20%, ending the quarter at 7.30%. While the outlook for inflation remains benign, the SARB seems to be more cautious in their outlook for interest rates.

The STANLIB Flexible Income Fund returned 7.6% for the year ending 31 December 2005. The Fund is classified in the Fixed Interest Varied Specialist category.

The Fund attracted good inflows of R63m over the quarter. Trades for the third quarter ending 31 December 2005, included the purchase of government paper in the long end of the yield curve. The exposure to parastatals were maintained. Purchases in corporate paper included Firstrand and Liberty Group. The exposure to floating rate notes were also increased, mainly through the home loan securitisations of Standard Bank and Vukile. Exposure to the money market was increased through the purchase of 12 month NCD's. The exposure to Standard Bank and Firstrand preference shares were reduced.

During the quarter the SARB MPC kept the Repo rate unchanged at seven percent, changing from a hawkish policy stance to a moderate policy stance. The MPC still cited oil prices as the major risk to inflation, but acknowledged the risks to inflation are more balanced. Oil prices have remained high over the quarter, but the Rand strengthened considerably on high commodity prices and Dollar weakness, dampening the expectations of higher inflation in 2006. Sentiment in the money market and bond market changed rapidly, expecting a sideways to downward move in interest rates instead of higher rates. The 12 month NCD rate opened the quarter at 7.30%, traded to a high of 7.75%, before ending the year at 7.25%. The yield curve flattened, with short dated bonds trading at money market levels. The money market is pricing for sideways to lower interest rates as inflation is expected to peak at lower levels. The SARB will monitor this situation carefully before moving official rates.

The STANLIB Aggressive Income Fund was launched in July 2005. The Fund attracted good inflows of R312m over the quarter, ending the year at R481 million. Fixed interest trades for the fourth quarter ending 31 December 2005 included, the purchase of 12 month NCD's at 7.75% when negative sentiment in the money market peaked. During the quarter the SARB MPC kept the Repo rate unchanged at seven percent, changing from a hawkish policy stance to a moderate policy stance. The MPCstill cited oil prices as the major risk to inflation, but acknowledged the risks to inflation are more balanced. Oil prices have remained high over the quarter, but the Rand strengthened considerably on high commodity prices and Dollar weakness, dampening the expectations of higher inflation in 2006. Sentiment in the money market and bond market changed rapidly, expecting a sideways to downward move in interest rates instead of higher rates. The 12 month NCD rate opened the quarter at 7.30%, traded to a high of 7.75%, before ending the year at 7.25%. The yield curve flattened, with short dated bonds trading at money market levels. The money market is pricing for sideways to lower interest rates as inflation is expected to peak at lower levels. The SARB will monitor this situation carefully before moving official rates. Listed property performed very well during the year with continued strong fundamentals in the underlying physical property market generating good earnings growth from the listed property companies. This has also caused significant increases in net asset values as a result of rising rentals and falling vacancies. Because of benign inflationary pressures in the economy, interest rates are unlikely to move up during the first half of 2006. This, coupled with continued growth in listed property earnings, should result in stable capital values in listed property.