Global Equity Class

Global Equity Class Commentary

Portfolio Sub-Advisor: OppenheimerFunds, Inc.

Fund Commentary - December 31, 2011

The Fund's thematic approach focused on four major global investment growth themes: Mass Affluence, New Technologies, Restructuring, and Aging. Throughout the year, the Fund maintained an overweight position relative to its benchmark in traditional growth-oriented sectors such as Information Technology and Consumer Discretionary, funded via underweighting of the more value-oriented sectors such as Financials, Materials, and Utilities. The Fund saw only marginal relative changes in sector over- and underweights, but it had no secular shifts during the period.

During the first half of 2011 the Fund's stock selection proved highly positive. However, concerns over the fiscal situation in Europe and the U.S. re-emerged in the second half of 2011. These concerns as well as the lingering possibility of a double dip recession caused equity markets to decline and bond yields in the U.S. to drop. As a result, the Fund underperformed its benchmark index, the MSCI World Index, for the period ending December 31, 2011.

Underperformance occurred in multiple sectors due primarily to stock selection. Energy and Information Technology, which are the Fund's most overweight sectors, were the primary detractors to the Fund's performance. Top detractors from performance in Information Technology included holdings for Juniper Networks, Inc., Infosys Technologies Ltd., Nintendo Co. Ltd., and MediaTek Inc. Worries about consumer demand in a weakening economy put significant pressure on these companies. A number of holdings in the Financials sector also hurt performance during the period. An uncertain regulatory environment and much lower projected earnings growth for banks in a recessionary global economy resulted in financial stocks performing poorly. In particular, the Fund's investments in The Goldman Sachs Group, Inc. and Credit Suisse Group AG were most negatively impacted by market events during the period.

The Fund outperformed primarily in the Materials sector largely due to being underweight in the sector. Overall top contributors to performance included fast-food retailer McDonald's Corp., Health Care companies Aetna Inc. and WellPoint, Inc. and Industrials holding European Aeronautic Defense and Space Co. These companies were able to find opportunities to grow their businesses despite a difficult economic and market environment.

Over the period, the global equity market declined, leading to a flight to safety into government bonds and other asset classes considered low risk by investors. Growth stocks tend not to perform well in this type of environment, and the Fund was primarily invested in growth stocks. Furthermore, the Fund was overweight in Europe and emerging markets compared to the benchmark. This contributed to the Fund's underperformance as worries about the sovereign debt crisis in the European region and emerging market growth dominated the headlines. The Fund had an overdraft greater than 5% of the Net Asset Value over the period of September 26, 2011 to September 28, 2011 as a result of a timing difference between unitholder and investment activity.