Was the overall European equity market environment supportive of the funds performance?
The European equity markets outperformed the US markets on a relative basis. Still, there was extreme volatility during the fiscal year, as market sentiment swung from buoyant optimism to fears of a profitless recovery. As expectations of an imminent global economic recovery gained ground, most of the European equity markets rallied in the last months of 2001. During the first half of 2002, the markets were generally flat, as an uneasy truce was kept between dashed expectations of the economic recovery and some corporate earnings upgrades. The last four months of the fiscal year reflected a roller coaster of bear market declines and rallies. Geopolitical risks, corporate governance worries, sluggish global economic activity and a lack of stimulus from the European Central Bank all weighed heavily on European equities. The United Kingdom was the best-performing equity market within the MSCI Europe Index, primarily due to its strong representation in the health care and oil sectors. The
