Fremont Global Fund

Third Quarter 2008

During the third quarter of 2008, the credit crisis reached a boiling point as a contagion spread through global capital markets and rattled investors worldwide. Both equity and fixed income markets were negatively affected in the U.S. and abroad, as lending came to a virtual standstill by the end of the quarter despite a host of unprecedented fiscal and monetary responses to the burgeoning crisis. Investors sought the safety of higher-quality assets, but even many previously unquestioned areas of the market drew concern after the Reserve Primary Fund, a retail money market mutual fund, "broke the buck" towards the end of the quarter. Oil prices began to slide rapidly from the all-time highs posted earlier this year, as the market anticipated a slowdown in global demand as the potential increased for a long-term global recession. As a result, commodity sectors (energy and materials) were the worst performers globally during the third quarter, after being the strongest performers through the first six months of the year. The more defensive areas of the global equity markets, primarily consumer staples and health care stocks, achieved the best performance as investors sought their perceived safety rather than more cyclically sensitive equity securities.

The equity portion of the Portfolio struggled on both an absolute and relative return basis during the third quarter, and all three equity subadvisors, First Quadrant, AllianceBernstein, and Wellington, underperformed their respective benchmarks. Generally speaking, weak stock selection was the driver of the underperformance, particularly within the more economically sensitive areas of the market such as consumer discretionary and financial stocks.

The fixed income portion of the Portfolio, managed by Loomis Sayles, struggled on both an absolute and relative return basis during the third quarter. Performance was primarily hampered by the overweight to corporate positions in the U.S., U.K., and European bond markets. The majority of the relative underperfomance was realized in September, as an unprecedented number of developments in the financial sector negatively impacted bond markets globally. These events include the U.S. government takeover of AIG, Fannie Mae, and Freddie Mac; the Lehman bankruptcy; the closing of the oldest money market fund; and Bank of America's acquisition of Merrill Lynch. With respect to currencies, overweight positions in the Singapore dollar, Indonesian rupiah, and Malaysian ringgit also detracted from performance, as these currencies weakened relative to the U.S. Dollar. An overweight to the Icelandic Krona also dampened returns, as increased risk aversion drove selloffs in the high-yielding currency

Sector allocations within the equity portion of the Fund remained largely the same despite the overall volatility in global equity markets over the past several months. On the fixed income portion of the Fund, Loomis continues to search for opportunities at substantial discounts that offer solid long-term value. Their outlook on currencies from commodity-related countries is generally negative, and the dollar/euro trade is likely to be range-bound, as both regions are facing similar problems. While duration was reduced within the fixed income portion of the Portfolio over the past year, it remains approximately one year longer than the benchmark. For now, weak domestic and global economic conditions will likely take precedence over inflation concerns, keeping a lid on interest rate increases for the next several quarters.

Investors should carefully consider the fund's investment objectives, risks, charges, and expenses before investing. For this and other information, please call 800.835.3879 or download a free prospectus. Read it carefully before investing or sending money.

The performance shown represents past performance and is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. From time to time the advisor has waived fees or reimbursed expenses, which may have resulted in higher returns. The listed returns and yields on the Fund are net of expenses and the returns and yields on the indices exclude expenses. Current performance of the Fund may be lower or higher than the performance quoted.

Investments in foreign securities, even though publicly traded in the United States, may involve risks which are in addition to those inherent in domestic investments.

The Fund is subject to the risks associated with investments in debt securities, such as default risk and fluctuations in the perception of the debtor's ability to pay its creditors.

Any sectors, industries, or securities discussed should not be perceived as investment recommendations. The views expressed represent the opinions of Managers Investment Group and are not intended as a forecast or guarantee of future results. Any securities discussed may no longer be held in an account’s portfolio. It should not be assumed that any of the securities transactions discussed were or will prove to be profitable, or that the investment recommendations we make in the future will be profitable.

Unlike the Fund, the Index is unmanaged, is not available for investment and does not incur expenses. Please see Index Definitions for all our funds' benchmarks.