Global Titans Fund Update

March Quarter 2007

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The performance shown in the Fund Update is the gross performance of the fund. To view the net performance of the fund or of the different unit classes of the fund download the Fund Performance Report or visit Fund Performance.

Gross performance returns and benchmark performance shown do not include expenses, fees or tax. Net performance returns are prepared on an exit-to-exit fee basis which includes all ongoing fees and expenses.

Market outlook

We believe that the global economy is in a mid-cycle slowdown with growth likely to slow close to long term trend levels.
Growth in Europe, Asia and Emerging Markets remains relatively robust and should continue to drive the global economy.
Central banks are unlikely to raise interest rates aggressively as core inflation should remain stable and at relatively low levels which should support sustained corporate profit growth, albeit at a slower pace than in recent years.
Reasonable aggregate valuations appear to support a constructive outlook for equities but returns are likely to be lower and more volatile than in recent years.
As aggregate market earnings growth slows, companies with sustainable above market earnings growth should command a premium. This is reflected in our stock selection.
The Fund is overweight Telecommunications, Information Technology, Food, Beverage & Tobacco and Oil Services.
We continue to underweight Industrials, Utilities and Western Retail Companies as valuations remain unattractive for the degree of earnings growth.

Composition may not total 100% due to rounding.

Performance review

Global Titans Fund

	Gross returns	Benchmark returns*	Out-performance^
3 Months	-0.70%	-0.18%	-0.52%
6 Months	2.99%	2.23%	0.76%
1 year	-0.94%	1.47%	-2.41%
3 years (pa)	12.08%	12.21%	-0.13%
5 years (pa)	1.33%	1.37%	-0.04%

*MSCI World ex Australia Index

Hedged Global Titans Fund

	Gross returns	Benchmark returns*	Out-performance^
3 Months	2.01%	2.51%	-0.50%
6 Months	10.77%	10.03%	0.74%
1 year	9.59%	13.04%	-3.45%
3 years (pa)	16.19%	16.74%	-0.55%
5 years (pa)	9.60%	9.92%	-0.32%

*MSCI World ex Australia Index (hedged in Australian dollars)

Past performance is not necessarily a guide to future performance.
^Shows the difference between Gross return and Benchmark return.
Gross performance figures quoted are calculated with no allowance for management fees, operating expenses or tax on income. Long-term performance shows the potential volatility of returns over time.

Performance review

Positive contributions for the quarter:

The Health Care sector contributed strongly to performance, where our holding in US pharmaceutical company Abbott Laboratories rose after announcing positive clinical trial results on key products. We believe that much of the good news is already priced into the shares and sold our holding accordingly.
Within the Telecommunications sector, our holding in the Japanese mobile phone operator KDDI performed well as subscriber numbers continued to indicate attractive market share gains in the domestic market.
Within the Energy and Materials sectors our holding in the Brazilian mining company Cio Vale Rio Doce benefited from the rise in metals prices. We sold our holdings in the stock to realise gains.

Detractors for the quarter:

Our holdings in the US homebuilder DR Horton performed poorly following a number of negative data releases that fuelled concerns about an extended downturn in the housing market. We retain our holdings as valuations appear very cheap and industry fundamentals are starting to bottom out.
Our holding in International Game Technology detracted after failing to raise full year guidance as investors had hoped. We remain confident that the gaming replacement cycle will drive attractive earnings growth over the medium-term.

Global Titans Fund Portfolio as at 31/3/2007*


Top 10 International shares
British American Tobacco	Consumer Staples	Great Britain
UBS	Financials – Ex Listed Property	Switzerland
Novartis	Health Care	Switzerland
Cisco Systems	Information Technology	United States
KBC Bancassuranc	Financials – Ex Listed Property	Belgium
TNT Post Group	Industrials	Netherlands
Yell Group	Consumer Discretionary	Great Britain
Rio Tinto	Materials	Great Britain
Amdocs Ltd	Telecommunication Services	United States
Allied Irish Bank	Financials – Ex Listed Property	Ireland

*These compositions are representative of the asset pool. Slight variations do occur between the unit classes.

Investment objective

The primary aim of the Global Titans Fund is to seek to maximise capital growth over the medium to long term by investing in a select portfolio of international assets. The Fund aims to outperform the MSCI World Index, ex-Australia (unhedged/hedged in $A).

Fund strategy

The Fund’s investment strategy emphasises bottom-up stock research which is conducted along global lines to identify undervalued companies. The strategy focuses on mid to large capitalisation stocks. The Fund is available on a hedged and unhedged basis.

Designed for investors who…

Seek an international share portfolio.
Accept the risk of fluctuations in global share markets and currencies.
Have a longer-term investment horizon.
For the hedged version, seek to reduce the impact on A$ returns on those investments that result from currency exposure.

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