Fund Objective

The investment objective of the PRU Pan European Fund is to maximise long-term total return by investing in equity and equity-related securities of companies, which are incorporated, or have their area of primary activity, in Europe (including United Kingdom). The Fund may also invest in depository receipts, including American Depository Receipts (ADRs) and Global Depository Receipts(GDRs), debt securities convertible into common shares, preference shares and warrants. The Manager intends to achieve this investment objective by investing all or substantially all of the assets of the PRU Pan European Fund into the Luxembourg-domiciled International Opportunities Funds - Pan European which shares the same investment objective.

Market Overview	As of 01-Aug-2010
July saw a return of risk appetites as a mix of generally better-than-expected quarterly results and a more upbeat report from the International Monetary Fund lifted sentiment. Data from Europe were broadly positive and the bank stress outcome boosted confidence in the continent’s banking system. Against this environment, the Fund rose 8.1% (bid-to-bid basis) versus a hike of 8.9% from its benchmark, the FTSE World Europe (including UK) Index in Singapore dollar terms. The Fund’s good performance was attributed to UK-based PartyGaming and Austrian bwin Interactive Entertainment which received a boost after the two companies announced a merger agreement. The news also benefited their UK rival Sportingbet as investors believe there is further potential for consolidation in the industry. Elsewhere, a position in Bank of Cyprus contributed to performance as concerns over the Greek sovereign default partly subsided. The largest detractor from performance was Dutch diagnostic kit maker Qiagen. The company’s stock suffered following profit warnings by some competitors. Positions in German dialysis care provider Fresenius Medical Care, chemicals giant Bayer and Swiss pharmaceutical firm Roche also disappointed as these companies did not participate in the rally as much as more cyclical stocks. In July, the fund manager of the Underlying Fund initiated a holding in Edenred, which was split from Accor during the same month. The fund manager of the Underlying Fund sold Dutch-Belgian insurance group Ageas. The sales proceeds were reinvested in UK-based Intertek which is involved in testing and inspection of goods. Another entrant was French auto part manufacturer, Valeo.

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