Copy of the Fund Manager’s Report from the Interim Report 30 June 2010 (unaudited)

Continuing their rally from March 2009, global stock markets retreated modestly from mid-January to early February. However, they regained their uptrend, and the FTSE All Share index registered a multi-month high in mid-April as economic indicators rebounded strongly in response to the unprecedented fiscal and monetary stimuli by governments around the world. Corporate earnings and balance sheets generally continued to improve amid aggressive cost reductions.

Despite the sustained rise in the market we expected uncertainty and volatility to return, based on our analysis of the developing macro and technical picture. Since April we have experienced the first significant pull back in stocks to the end of June over concerns about the fading effects of government stimuli, high government and personal debt, large fiscal deficits, weak labour markets, hung parliament in the UK and European sovereign debt problems.
Against such uncertain macroeconomic environment, we believe that individual stock selection will matter the

most in generating relative outperformance. We have generally avoided sectors which we considered would remain under pressure, including financials, house builders, property and retail. The Fund retained its exposure to technology, oil and oil related and increased its weighting in utilities and pharmaceuticals. Many of our stocks have performed well and we continued to maintain an overall defensive bias through the use of index futures to lessen the impact of a downward move in the overall market. This is reflected in the Fund’s strong absolute returns over the six month period.

Performance

For the six months to 30 June 2010, the value of the Fund increased by 19.6%* compared with a decline of 4.3%* for the average fund in the UK All Companies sector. This performance ranked the Fund 2nd* out of 258 funds in the UK All Companies sector. The FTSE All Share index fell 6.1%* during the same period.

Portfolio

At 30 June 2010, the portfolio consisted of 27 companies. Utilities made up 21.2% of the portfolio followed by Oil & Gas Producers 12.7% and Software & Computer Services 10.2%. The Fund’s overseas exposure was 1.9% of the portfolio. The cash position at the period end was 14.8%.

Outlook

Whilst the strength of the global economy is encouraging, it has largely been driven by strong government stimulus and businesses rebuilding depleted inventories. More recently, the feared macro concerns have returned to the fore. The prospect of government spending cuts, higher taxes and sovereign debt problems in Europe spreading elsewhere has led to renewed uncertainty. Weakening economic data from the US and China, persistently high US unemployment and a fragile housing market have revived fears of a double-dip recession. To fund the current UK, US and European deficits, these countries will have to borrow on an unprecedented scale. Whilst the likelihood of an interest rate rise has been delayed for the time being, it will no doubt dominate investors’ minds at some point.

Despite the uncertainty and a fall in the FTSE All Share index during the period the Fund has delivered strong absolute growth. Whilst the market has recovered somewhat since the end of June, we remain cautious and will continue to maintain an overall defensive bias whilst focusing on stocks we consider have company-specific drivers and can succeed regardless of the macroeconomic environment. We believe that the Fund is appropriately positioned for a challenging and a potentially volatile period ahead. Although it may underperform over short periods, we remain confident that in such uncertain situation our balanced approach provides some protection on the downside with the best opportunity for a better relative performance over the longer term.

I thank you for your investment in the Manek Growth Fund and your continued support.