Current Share Price Announcement

June 2008

Releasing the Hidden Value of With-Profits

As the decision on reattribution of surplus funds for Commercial Union and General Accident draws nearer it is worth taking a look at the longer term value of with-profits investments.

I am sure that you are aware that with traditional with-profits policies no longer being issued, we are entering the long slow run-off phase of the market. Many with-profits funds have large surpluses that have been built up through smoothing over many years that must be shared between the remaining Policyholders fairly soon in order to avoid the "tontine effect" of the last policyholder receiving everything.

EGF seeks to exploit these elements of hidden value.

Aviva's orphan assets fall into this category as do the assets being distributed by Pearl through enhanced bonus rates. In addition, Prudential are currently negotiating the distribution of their surplus assets.

Aviva have already announced enhanced bonuses for Commercial Union and General Accident policies over the next three years and the remaining distribution is likely to be a cash payment to Policyholders. Although EGF does not hold significant volumes of either of these funds, the Aviva decision is quite important in that coupled with the current regulatory pressure to distribute these surpluses, the other major with-profit funds will be watching the decision closely and are likely to follow suit.

Although the surpluses have been built up over many years, crucially it is the Policyholders who remain invested in with-profits that will benefit from these windfalls.

Alongside the potential windfalls, it is encouraging to see that the stronger with-profit funds continue to perform solidly in a particularly difficult investment climate. Prudential is a very good example of this. The recent WM Life Fund Survey has named Prudential as the top with-profits fund in 2007. It out-performed other top life funds and continues use its financial strength to produce better returns. This is great news for EGF investors as it is one of the top stock holdings in the fund.

Martin Brookes, head of Prudential's portfolio management group commented,

"The biggest driver for our fund is asset-allocation. Getting the big picture correct is very important in order to get the overall asset mix right."

Prudential and the top Life Offices such as Clerical Medical, Norwich Union and Standard Life use active management to enhance growth whilst still providing smoothed returns for investors. When coupled with the potential for future windfalls, this underlines the exceptional opportunities offered by EGF over the medium to long term.

Share Prices

The underlying EGF share price has improved further and continues to provide consistent growth. Alongside that, a slight strengthening of Sterling over the month has affected both the EUR and the USD prices positively.

The share prices as at 15th June 2008 are:

• Class A GBP £ 12.01
• Class B GBP £ 11.72
• Class B USD $ 22.90
• Class B EUR € 15.00

To contact the fund team call +44 1225 473124.

Martin Caplan
Investment Consultant

The value of shares may fall or rise each month, this means that your capital is at risk when investing in EGF. This investment should be regarded as medium to long term in nature. If you withdraw from this investment in the first 5 years, exit penalties may be applied. It is only suitable for professional investors who understand the risks involved and investment should not be made prior to reading the prospectus. If in doubt seek expert advice. Nothing contained within this document constitutes investment advice or an offer to subscribe.