Fund Objective

The investment objective of the PRU Global Basics Fund is to invest wholly or mainly in companies operating in basic industries (‘primary’ and ‘secondary’ industries) and also in companies that service these industries. The PRU Global Basics Fund may also invest in other global equities. The sole aim of the Fund is long-term capital growth.The Manager intends to achieve this investment objective by investing all or substantially all of the assets of the PRU Global Basics Fund into the M&G Global Basics Fund which shares the same investment objective.

Market Overview	As of 01-Aug-2010
Global equities reversed a two-month trend of negative returns during a generally positive July characterised by renewed risk appetite. Investors took heart from an encouraging flow of corporate results and the European Union’s successful, although somewhat lenient, banking stress tests. This helped to counteract concerns over mixed economic data from China and the US, as well as the uncertain outlook for the latter. At a sector level, financials rallied sharply, while investors’ renewed risk appetite supported demand for more cyclical basic materials and oil & gas stocks. The Fund rose 5.4% (bid-to-bid basis), in line with its benchmark. Good stock selection in the basic materials and oil & gas sectors added value during a positive month for the Underlying Fund. A holding in Anglo-Irish oil & gas exploration group Tullow Oil, the second-largest position in the Underlying Fund, was the leading contributor. Platinum, copper and nickel were amongst those raw materials that saw their prices rebound from their most recent lows in June. During the month, some of the more defensive names in the portfolio, such as Colgate-Palmolive, UK-based security services provider G4S and luxury hotel group Hong Kong & Shanghai Hotels came under selling pressure. The fund manager of the Underlying Fund, Graham French, took advantage of recent share price weakness and initiated a new position in US agricultural producer Monsanto. Existing positions in K&S, Yum! Brands and G4S were added. To provide funds for these investments, the holding in French chemicals producer Arkema was closed. Graham French took some profits from the holdings in Johnson Matthey, Aggreko and Sims Metal Management following a period of very strong share price performance.

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