"Over the above period the markets have been particularly unstable with thevolatility shooting up above 30%. The market decline originated from subprimefears after the decline in the housing market that caused a lot of subprimeloans to default causing large damages to the companies dealing in such loansand the hedgefunds that bought securities backed by such loans. The swiftreaction of the central banks together with the good macro data and resultshelped ease these fears for the time being and we have had some recovery.

I am still positive on the market but expect volatility to continue (atlower levels though). Regarding the fund it recorded a maximum draw down of 9,6%from the high in the above period (and 11,8% from all time high recorded on the20th of July). This was better performance compared to the developed marketsincluding a much faster rebound. The fund is at the moment trading at 3,6% lowerthan the start of the period examined. The above was achieved despite the betterperformance of the fund since the year start.

Eventhough the banking sector in Cyprus and Greece do not have any exposurein these kind of instruments we expect the markets to continue to be affected byany variations in the rest of the world (but at a lower level). Having said thatand excluding any other major correction we expect the markets to be higher thancurrent levels (and all time high) by the year end.

Portfolio Manager Marios Demetriades, Laiki EDAK and AssetManagement Ltd"