Was the overall international equity market environment supportive of the funds performance?
The international equity markets outperformed US markets. 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 world 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 and accounting worries, combined with sluggish global economic activity and a poor outlook for corporate earnings, all continued to weigh on sentiment. However dollar-based investors benefited from a euro that rallied substantially against a weakening US dollar. Europe was affected by a lack of stimulus from the European Central
