Fuelled by additional doses of quantitative easing, the first two months of calendar 2012 proved to be a complete reversal of the latter half of 2011 (especially the July through October 2011 period). The euphoria waned in March, however, as investors rotated out of cyclical stocks to more economically-defensive holdings. Despite these shifts, and due primarily to superior stock selection, the Fund outperformed the MSCI World Index this quarter. The top performing markets in the World Index included Germany, Singapore, Belgium, Denmark, and Finland. Japan delivered the best performance measured in yen, but translated into US dollars, the returns nearly halved. The biggest laggards included Spain, Portugal, the United Kingdom, and Israel. Top performing sectors in the World Index included the following economically cyclical sectors: information technology, financials, consumer discretionary, industrials, and materials, while four of the five biggest laggards were traditional defensives: telecommunication services, utilities, consumer staples, and health care as well as energy. Relative performance was strengthened by fund holdings in the transportation, energy, healthcare equipment & services, capital goods, and insurance industry groups. Meanwhile, holdings in the consumer services, pharmaceuticals & biotechnology, and software & services industry groups as well as underweights to the diversified financials and technology hardware & equipment industry groups detracted from relative performance. *

*The securities identified and described above do not represent all of the securities purchased, sold or recommended for client accounts. The reader should not assume that an investment in the securities identified was or will be profitable. Past performance does not guarantee future results. For a description of our performance attribution methodology, or to obtain a list showing every holding's contribution to the overall account's performance during the quarter, please contact our product manager, Kevin Moutes, at 310-231-6116 or moutes@causewaycap.com.