F&C Portfolios Fund S o c i M d 'Investissement a Capital Variable

Report & Accounts (Unaudited) for the period ended 31st March 2007

e

F&C Portfolios Fund SICAV Contents

'I'hc Ibr t fo lm and their Ohjectives

Board of Directors

Comparative 'I'ablc

F&C VS Srnill(:ap

F&C t.,uropcan High Yicld Hond

F&C Europcin Equity

F&C North hmcrican Equity

FWC Japanese Equity

FikC Pxific Equity

F&C Global Emerging Markets Portfolio

FSlC European Corponte Bond

F b C Biol'harma

F&C Global Real Estate Securities

F&C Global Convertible Bond

F b C Emerging Markcts Bond

F&C Euro Inflation Linkcd I3ond

F&C European SrnallCap

F&C Far East Equity

F&C Stewardship Intcrnitional

F&C GTAA Alpha Fund

Combined Statemcnt of Net Assets

Combined Stxtrrnent of Operations and Changes in Net Assets

Notes to the Financial Statements

Administration

2

5

6

7

1 1

16

22

28

32

37

44

52

56

62

72

77

80

84

89

96

100

104

108

117

Copies of the report and accounts to 31 st March 2007 may be obtained from the registered office of the Company at 2-8, avenue Charles de Gaulle, Luxembourg. Notices to shareholders are published in the Memorial Recueil, d'wort. Bundesanzeiger and Bulletin des Annonces Legales Obligatores (B.A.L.O.) The Articles of Incorporation of the Company have been lodged at the offices of the Chief Registrar of the District Court of Luxembourg ('Greffier en chef du Tribunal d'Arrondissement de et a Luxembourg') where they are available for inspection and copies can be obtained upon request. The net asset value of each of the Company's shares is quoted in the Financial Times and Bloomberg. The issue and redemption prices are available from F&C Management Limited, Exchange House, Primrose Street, London EC2A 2NY, U.K.

No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the basis of the current prospectus and the latest annual and the most recent semi-annual report, if published thereafter.

The information contained in this report is historical and not necessarily indicative of future performance. Statements contained in this report concerning future performance are the opinions of management and there can be no guarantee that such opinions will prove to be correct.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 1

FBC Portfolios Fund SICAV The Portfolios and their Objectives

F&C US SmallCap The ohjective of this Portfolio is to allow investors to participate in a portfolio consisting principally of securities traded on

United Stdtcs Stock E x C h J n g S and thc NhS1)AQ. Investment policy is directed towards achieving long term capital growth through investment in small and medium sized companies. 'I'he Portfolio typically looks for companies that gcncratc frcc cashflow, solid returns, have a strong market position and where managenient (insiders) have significant equity ownership.

'I'he Portfolio is denominated in 115 Dollars.

F&C European High Yield Bond The objective of this Portfolio is to achicvc an abovc average mte of return over the long term, measured in Euros through

investing principally in lower med and unmted fixed income, floating rate and other debt securities issued predominantly by

European cornpanics, including prefcrcnce shares, cquit!*-linkcd debt securities (such as convcrtihlcs) and deht securities.Thc

I'ortfolio may also invest in securitised debt of nonBuropean issuers c1enomin;tted in Euros and British Pounds Sterling. The

Portfolio is denominated in Euros.

F&C European Equity 'I'he ob~ectivc of this Portfolio is to achieve long term capital appreciation hy investing in listed Europran cornpanics It 1s

intended that most of the investments made by FSrC European Equity will consist of companies with a l i q e market

capitalisation and which arc listed on a rccognised stock exchange or ticalt with on a rcgulatcd market in a Europrm country.

'I'hc Portfolio is dcnominatcd in Euros.

F&C North American Equity

The objective of this Portfolio is to achieve long term capital appreciation by investing in listed North American companies. It

is intcndcd that most o f the investttictits made by F K , North American Equity will consist of companics rcgistcrcd in the

U.S.A. or Canada, or whose major business activity is located in these countries and which are listed on a recognised stock

cxchangc or dcllt in on a rcgulated market The Portfolio is denominated in Euros.

F&C Japanese Equity

'I'hc objcctivc of this Portfolio is to achieve long term capital appreciation by investing in listcd Japanese companies. It is

intended that most of the investments made by FGrC Japanese Equity will consist of compnnies registered in Japan and which

arc listed on a rccogniscd stock exchange or deilt in on a reguhterl market,The P<)rtfolio is denominated in Euros.

F8C Pacific Equity

'I'he objective of this Portfolio is to achieve long term capital appreciation by investing in listed cornpanics in thc Far East

excluding Japan (the "Pacific Kcgion"). It is intended that most of the investments made bv F&C Pacific Equity will consist of

companies registered in the I%citic Region, or whosc major husincss activity is located in this region and which are listed on

a recognised stock txchange or Jcalt in on a regulated niarket.The Portfolio is denominated in Euros.

F&C Global Emerging Markets Portfolio The objective of this Portfolio i s to provide a nlcdium through which investors may participate in eqitit)' and debt issues in

cmeging capital markcts.The Portfolio is denominated in IJS I3ollars.

2

FBC Portfolios Fund SICAV The Portfolios and their Objectives

F8C European Corporate Bond The objective of this Portfolio is to achieve an above avenge rate of return over the longterm, measured in Euros, thmugh

investing principally in fixcd income, floating rate and othcr debt securities issued predominantly by Europcan companies,

including prcfcrencc shares, equity-linkcd debt sccurities (such as convcrtiblcs) and securitised dcht ‘I’hc Portfolio is

denominated in Euros.

F&C BioPharrna

The objective of this Portfolio IS IO achieve long term capital appreciation by investing globally in healthcare companies. It IS

intcnded that most of the investments made hy F&C BioI’harma will consist of conipanies that are involved in, focus on or

rclatc to the area of pharmaceutics, biotechnology, diagnostics, medical technology and/or healthcare services and facilities

cornpanics and which arc listed on a rccclgniscd stock exchange or dealt in on a regulated mdrket.‘rhc Portfolio is denominated

in Euros.

F&C Global Real Estate Securities The objective of this Portfolio is to achicve long term capital appreciation hy investing globally in listed real estate cornpdnics.

It is intended that thc I’ortfolio will consist of securities of rcal estate companies that arc listcd on a rccognisctl stock cxchangc

and which are mainly locited in the C.S.A., Hong Kong J;rpm,Australia. the K.K. and Continental Europe. The Portfolio is

dcnorninatcd in Euros.

F&C Global Convertible Bond The ohjective of this Portfolio is to achieve high returns by investing its assets through a balanced portfolio consisting of

convertible securities which offcr the most attractive ribkhewdtd characteristics in terms of upward participation and

downsidc protcction.‘l’his Portfolio will cornprisc convenihle debt securities by private issuers located in Europe, the U.S.A.,

Japan and Asia.The Portfoliu is denominated in Euros.

F&C Emerging Markets Bond

The objective of this I’ortfolio is to achieve a rate of return over the long term through investing principally in fixed income,

floatinfi rate and other debt sccurities issucd hy governments of cmcrging market countries including prcfcrencc shares,

equity linked debt securities (such as convertibles) and securitised debt.The Portfolio is denominated in US Dolhrs.

F&C Euro Inflation Linked Bond The objcctivc of this Portfolio is to generate a combination of capital growth and income principally through investment in

thc inflation linked debt securities of Europcan government issucrs, supranational institutions of which one or more El:

Member States are members and European government agencies, and also through investment in inflation linked securities

issucd hy European corporate issuers.l’he Portfolio is dcnorninatcd in Euros.

F8C European SmallCap The ohjecrivc of this Portfolio is to achieve long term capital growth through investment in small and medium sized companies

that are European domiciled and listed on various Stock Exchanges.The Portfolio is denominated in Euros.

F&C Porttolios Fund SICAV Intermm Report & Accounts 2007 3

F&C Portfolios Fund SICAV The Portfolios and their Objectives

FLC Far East Equity

The ohjectivc of this Portfolio is to achieve long term capital apprcciation by investing, directly or indirectly, in companies

located in the Far East (excluding Japan) or deriving a significant part of their income from that region. The I’ortfolio is dcnorninared in Euros.

F8C Stewardship International

‘I’he principal objective of this Portfolio is to achieve long term capital appreciation by investing predominately in equity and

equity relatctl sccnrities of companies, in any market, whose products and operations are considered to be making a positive

contribution to society.’l’his I’ortfolio will avoid companies which, on balancc, are felt to he hxming the world, its people or its wildlife or which tmde extensively with oppressive regimes.The Portfolio is denominated in Euros.

F8C GTAA Alpha Fund

The objective of this I’ortfolio is to achieve medium term capital gains through the iniplementation of an actively managcd

allocation strategy to different asset classes. regions, styles and currencies. It is intended to follow a “topdown” approach and

to analyze the fundamentals, \-dilation and m:icro-rcononiic chardcteristics of the cntirc markets as to cqiritics securities. fixed

income securitics. currcncics or altcrnativc investnmits such as indircct investrrients in commoditics and real cstatc. ‘I’hc

Portfolio is denominated in Euro.

4

F&C Portfolios Fund SICAV Board of Directors

Simon Peter Airey - Chairman Director of contpcwiies Reau Verd 1:arni Rue du Poivre, St. John lersey JE3 4FS, United Kingdom

Nick Criticos Head of Retuil and Imeslmenl Trusts, F&C Asset Management plc Exchange IIouse, Primrose Street London 13C2A 2 W , IJnited Kingdom

Jacques Elvinget Partner - E l v i r p l ; Hoss E Priissen 2 , place Winston Churchill B.P. 425 , L-2014 Luxembourg

Laurence Richard Llewellyn Direclor of compunies 52A Brook Green London WC, 7BJ United Kingdom

Roberto Seiler Purtner - Lombard Odier Dmisr Heritscb P Cie, Aiwule Bankers 4. rue de Saussure 1204 Geneva Switzerland

Scott Stevens Head oj‘ Marketing Communication E. UK Reluil Murketing, F&C Asset Mcmugement plc Exchange House, Primrose Street London EC2A 2NY, United Kingdom (Co opted by the Board 29th November 2006)

Antonio Thomas Munuging Director ?f RBS Fund SerLdces [Imlmdj Limited 1 George’s Quay Plaza, 3rd lkor, George’s Q u y 1)ubIin 2 Ireland

Andre Elvinger k r t i i e r - Elvinge?; Hoss & Prussen 2, place Winston Churchill B.P. 425, L-2014 Luxembourg (Resigned from the Board 28th November 2006)

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 5

F&C Portfolios Fund SICAV Comparative Table

TOTAL NET ASSETS

Portfolio 31st March

Currency 2007 30th September

2006

FStC US SmallCap F&C European High Yield Bond F&(: European Equity FWC North American Equity FSrC Japanese Equity FkC I’acitic Eqiiir) FSZC Global Emerging Markets Portfolio FSrC European Corporate Bond FkC BioPharma F&C: (;h>hdl Redl Estate Sccuritics F&C Global Convertible Bond F&C Emerging Markets Bond FSrC Euro Inflation Linked Bond FSrC European SmallCap F W Far bast Equity FWC Stewardship International F&C Portfolio Fund - F&C GTAA Alpha Fund

s € E E 6 E $ € 6 E E s € f € E €

NET ASSET VALUE PER SHARE

Portfolio Currency

16’1,180,983 58,342,953 25.927.441

103,517,522 119,421,132 44,263,965

298,686,703 ‘19,600,099

116,15X,003 in,121,115

128,3741 16 93,558,475 5731 7.41 5

104,123,404 I14,000,713 44,505,369

238,310,010

31 st March 2007

125.041,386 55,072,421 20,431,329

109.197,044 121,926,165 40,676,274

189,866,974 57,768,561 10,505,163

1 14,965,652 125,930,703 72,459,91 I 59,816,172

1 1 1,730,133 19,367,512 27,964,406

N/A

30th September 2005

173,5 15,079 56,291,200 38,086,084

I 33,299,682 142,478,095 39.7‘21,456

!,22,7 10,446

10,575.1 58 58,665,709

85,25 1,7 18 84,598.285 56,871,669 59,409,796

1 73,3 1 7,469 N/A N/A N/A

30th September 30th September 2006 2005

F&C U S SI1lallCal> - Class A FWC 1;s SmallCap - Class C (I) F M : European High Yield Bond - Class A FSiC Europcan Equity - Class A F&C North American Equity ~ Class A F&C Japanese Equity - Class A FBrC I’acific Equity - ClassA FkC Global Emerging markets Portfolio - Class A FSlC European Corpomte Bond - Class A F&C Hiol’harma - Class A FSZC Global Real Esrate Securities - Class ;\ F&C Global Convertible Bond - Class A F&C Emerging Markets Bond - Class A F&(: Emerging Markcts Bond - Class H FWC Emerging Markets Bond - Class Commcrzbank

F&C Euro Inflation Linked Bond - Class I F&C European SinallCap - Class A FWC Filr East Equity - Class I FSlC Far East Equity - Class X (’)

F&C Stewardship International - Class I F&C Stewardship Intcrnational - C:lass A (”

FSrC GTAA Alpha Fund - Class I Euro (I)

Global Emerging Markets Bond - Euro (Hedge)

$

$ f € E f € s E € f € $ $

€ 6 € 6 f 6 6 E

91.02 9.96

14.96 19.07 23.69 28.48 41.09 21.15 18.11 16.31 20.52 12.95 12.94 13.82

107.78 9.65

19.10 13.28 13.29 10.50 10.13 95.13

85.07 N/A

15.24 17.1; 23.47 28 33 j4.01 17.74 18.65 16 y2 18.58 12.43 12.74 13.49

103.72 10.21 15.98 11.35

N/A 9.94 N/A N/A

78.70 N/A

15.65 14.87 22.65

32.34 15.29 19.69 17.03 15.62 11.63 12.49 12.99

N/A 10.66 12.77

N/A N/A N/A N/A N/A

26.83

I” Imnched I st khruary 2007 “’ Lunched 8th March 2007 (’) L?unched 26th October 2006 Irr Launched 26th January 2007

F&C Portfolios Fund SICAV F&C US SmallCap

Performance

Over the six month period to 31st March 2007, theA share class rose by 7.0%) (net of fees), underperforming the R ~ i ~ ~ e l l 2000

TR Index, which returned 1 I .02%. The C 5hares were launched on 31st January 2007 and during the period from launch to

Tjlst March 2007 fell 0.40%. compared to a rise in the benchmark ovcr the same period of 0.27%. I

Market Review

Investors in smaller IJS companies enjoyed reasonlble returns over the period under review. These gains came against an

increasingly uncertain backdrop and whilst equity markets swiftly recouped the losses made during May and .June ZOO6

investors expressed an ongoing prcfercncc for morc dcfcnsivc arcas of thc market. Thc Federal Kcscrvc kept rates on hold at

5 .25S - responding to signs of sl(iwL‘r cconomic growth arid an casing of commodity prices. Thc 1:s consumer remaincd

relatively hcklustre and towards thc cnd of the period worse than expected housing data increased widcr cconomic concerns

once morc. The 1:s dollar weakened against the euro and the yen as investors continued to price in rate cuts by the Fed in

2007.

Fund strategy rcmaincd focused on providing investors with long-term capital growth through a portfolio investing in small and medium sized US companies. Wc continue to believe that the best way of achieving outperformance in the asset class is

through a risk-awrse approach.

Stock selection w-ithin thc consumer discretionary sector tlctracted over the period under review. I’ersistcntly high loan losscs :it America’s Car-Mart dragged the stock down and our position in swimming pool maintenance equipment supplier Pool also fcll. ‘I’herc were some notable siiccesses within this arri however, including Conns, a retailer of home clectrical appliances

a n d car rental spccialist I3olhrThrifryAutomotive Group. Throughout the period we sought to take advantage of weakness in

consiimer related arcas, particularly when worries seemed overdone. I

Stock selection within materials and processing also proved negative. Slightly disappointing results from Beacon Roofing

coupled with concerns about the housing market caused the stock to untlerperform.Tliese concerns also impacted 011 copper

and brass products nianufacturer Mueller Industries.

Iixposurc to the financials sector proved to he tlie largcst positive contrihutor during thc pcriod. We took profits in financials

stock, Mcrcantile Ranks.The bank was acquired by PNC Flnmcial for a 25% premium. Alleghany Corp, an owncr and manager

of a snidl group of businesses and investments, rose strongly. Other notable contributors include teleconferencing specialist

Premier Glohil Serviccs and Genesis Healthcare.

I

Outlook I.ooking foward, although we remain optimistic on a longer term view that the smaller company sector in the U S Will be a

fruitful one in which to invest, in the near term concerns over the potential impact of slower economic growth is likely to

make investors incline towards lcss risky sectors. such as large companies

Nick Ford Portfolio Manager April 2007

Note The information contained in this report is historical and not indicative of future performance

Statements contained in this report concerning hiture prrformancc arc the opinions o f management and there can be 110

guarantee that such opinions will prove to be correct

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 7

F&C Portfolios Fund SICAV - F&C US SmallCap Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

SHARES Canada Hub International 86,204 3,592,983 2.19

United States Aaron Rents Acco Brands Act~i:itit 'A' Airgas Allegliany Allicd Capital Aniericin Capital Strategies Arncrican Equity lnvcstmcnt L i f t Holding America's Car-Mart Atidrcw Apollo Investment Avocent Baldor Electric Beacon Roofing Supply Big 5 Sporting Goods Bottomlinc 'I'cchnologics CapitalSource Cherokee Inreriiationil Community Hcalth Systems Conn's Cousins Properties Cox Radio 'A' Iknhury Resources Dollar Thrifty Automotive Group Firstcity Financi;il Florida East COASt Industrics Frcd's 'A'

Genesee &Wyoming 'z4' Harvard Bioscience Harvest Natuml Resources HCC lnsurancc Holdings lnvitrogcn Jack Henry Sr Associates Jardcn Kirby Lamar Advertising 'A' Lithia Motors 'A' LKQ Mac-Gray Midland Mucller Industries Palm Harbor Horncs Pervasive Software

74,910 181,430 62,261 63,846 7,306

82,314 54,013

15 1,HlO 187,638 197,886 141,121 69,370

118,980 203,100

1 64.5 10 116,237 292,484 114,394 145,404 123,348 108,712

137,687

107.688 92,238

160,378 74,910

207,085 75,747

349,119 141,004 82,687 43,874

120,770 101,205

50,044 104,769

58,764

78,374 107,670

52,256 H3,918

142,302 296,687

1,980,620 4370,649 3,163,481 2,691 I 109 2,729.522 2,371,466 2,393,316 1,993,265 2,506,844 2,042,663 3,019,989 1,870.909 4,490,305 3,286,158 3,050,447 1,7Y 3,159 2921,036 1,649,610 4.0 32,388 3,598.749 4,053,215 1,483,(319 3,208,026 4,707,828 1,700,007 1.561,608 3,044.1 49 2,015,521 1,682,754

1,373,379 2,546,760 2,792,580 2.r)04,5 18 3,876,151 2,055,565 3,151,271 2,871,718 1,713,256 1,686,112 2,216,700 2,525,932 2,040,OI 1 1,213,450

1.21 2.66 1.93 1.64 1-66 1.44 I .46 1.21

1.53 I .24 1.84 1.14 2.74 2 .oo 1 .H6 1.09 1.78 1 .00 2.46 2.19 2.47 0.90 1.95 2.87 1.04 0.95 I 135 1.23 I .03 0.84 1.55 1.70 1.77 2.36 1.25 1.92 1.75 1.04 1.03 1.35 1.54 1.24 0.74

a

FBC Portfolios Fund SICAV - F&C US SmallCap Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

United States (continued) 1'001 80,318 2,875,384 1.75 Premiere Global Senices 379,870 4,262,141 2.60 Prestige Brmds Holdings lr)7,130 2,335,990 1.42 Pridc International 110.642 3,330,324 2.03 Radiation Therapy Services 96,540 2,957,986 1.80 Regis 42,469 1,714,474 1.04 Ikpuhlic Servlccs 131,583 3,660,639 2.23 Roper Industries 66,526 3,650,947 2.22 Salix Pharmaceuticals 168,730 2,125,998 1.30 SRI / Surgical Express 21,487 108,294 0.07 Sturm Rugcr 135,430 1,821,533 1 . 1 1

IJniversal Truckload Serviccs 92,215 2,232.525 1.36 'I'ransaction Systems Architccts 'A' 108,540 3,515,611 2.14

Vrril Resorts 34,898 1,896,008 1.15 Werner Enterprises 136,040 2,47 1,847 1 . 5 1

151,340,416 92.18

Total Investments Other Net Assets

154,933,399 94.37 9,247,584 5.63

Total Nct Assets 164,180,983 100.00

The accompanying notcs form an intrgrdl part of thew financial statcmcnts

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 9

F&C Portfolios Fund SICAV - F&C US SmallCap Distribution of Investments by Economic Sector

% of Net Sector Assets

Retail 11.27 Ranking & Financial Scrvices 10.03

Insurance 7.97

Oil & Gas 6.46 Information Technology 4.74

Telecommunications 3.84 Consumer Goods 7.78

Electric, Electronic Equipment and Engineering 3.74 hlrdical - BioniedicaVGenetics 2.73 Office/Dusiness Equipment 2.66 Cornmcrical Services 2.23

Transportation 9.16

Maniifdcturing 6.80

Metlicil - Services 4.32

Environ~iietital Control 2.23 Softwire 2.14 I)istribution/\X/hoIcsalc 2.00

Medical - Drugs 1.30

Leisure &Tourism 1.16 Media 0.90

Total Invcstrncnts 94.37

Advertising 1.92 Auto Parts Jz Equipmriit 1.75

Iluilding tk Construction 1.24

Other Nct Assets 5.63

100.00

10

FBC Portfolios Fund SICAV F&C European High Yield Bond

Performance For the six month period ending 31st March 2007 the portfolio was up 4.26% (net of fees) versus a return of 4 17% for the

bmchrnark, thc Mcrrill Lynch European Currency High Yield, BB to B rated, 3% C:onstnlnrd Index, resulting in an out-

performance of 9 basis points.

I’erformance was helped by our ovcnveight to CCC rat-atcd paper The fund also bcncfitcd frnm an overweight position in

MDPAC, Ne11 and Wind. Riper & Packaging pcrf(~incd well during the half, and the fund’s overweight helped performance The

main detractors from performance were a largc iindcrwcight to hybrid securities which rallied strongly during JJnuary, an

undcrwcight in both Ford and Cable &Wireless also hurt performance.

Market Review

The high yield market returned 5.88% for the period as measured by the Merrill Lynch High Yield Global Constrained Index.

Pcrformancc consistcd o f 1 .r)OX from positive price performance and 3.98% from coupon income. Cash pay constrained B-RR

European High Yield returned 4.33% for the half, quite significantly underperforming IJS cash-pay H-HH high yield, which

rcturncd $.2j%.All rcturns are 100% hedged into euros.

The best performing sectors during the half were paper & packaging, primarily as a result of the IPO announcement from

MI>PM:. In addition, rnerals and mining did well as metal prices reboundcd from their lows. Gaming also struggled during the

second half of the reporting period, and whilst it recovered somewhat it settled helow its highs.

Outlook Whilst the consensus is that total returns for the year should be slightly below coupon, there h& been a marked increase in

volatility as a rcsult of the global market correction, precipitated by fears ovcr incrcascd regulation in China. Whilst risk

aversion did not last, and CCC’s have continued to outperform, this “shot across the bows” has proven to he a wake up call for

the credit markets, and attention is now firmly on economic dlta for clues as to the direction of the 13 econoniv.

Whilst the fundamental aspects of the high yield market have not ch;inged - low tlefaiilt rates and decent results -there have

becri indications that for sonie sectors the transparcncy of future carnings has become lcss clear, and thus a degree of caution

has crept in.The European market is in very good shape technically as a dearth of new issuance has resulted in investors having

cash to put to work.There has also been a marked shift to senior FRN’s and yield to call paper, which is set to continue until

investors have a better idea of which direction the market is likely to take. Q1 numbers will he key to this.

Vzc remain constructive on thc market, and arc overweight H, CC(: and unratcd papcr although as a proportion of the fund

this has been decreasing over time.

Andrew Lake

Portfolio Manager April 2007

Note: The information contained in this report is historical and not indicative of futurc performancc.

Statements contained in this report concerning hiture performance are the opinions of management and there can be no

guarmtcc that such opinions will prove to he correct

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 11

F&C Portfolios Fund SICAV - F&C European High Yield Bond Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rata Date CCY value E Assets

BONDS Belgium Telenct Corninunications 9.00% 15 Decembcr 2013 EIJR 474,1345 521,779 0.w

Bermuda Central European Media Enterprises 8.2596 I 5 M J ~ 2012 ELH 900,000 981,000 1 68

Canada Bombardier 7.25% 15 November 2016 ELK 1,781,000 1,865,597 3.20

Denmark ISS Global 4. jO% H 1)ccemlier 2014 EIJR 500,000 442,500 0.76 ISS Global 4.75% 18 September 2010 EIJR 500,000 490,000 0.84 Nordic Telephone Co. Holdings 8.25% 1 May 2016 IWR 1,497,000 1,635,472 2 80

France Alcatel-Lucent €3 E1.V E1)Ii.R E Compagnie Generale de

Geopliysiques-Veritas Crown European Holdings

6.38% 7hpril 2014 EUR 7.06% 15 May 2013 EI:R

7.75% 15 May 2017 USD 6.25% I September 201 1 I I j R

2,567.972 4.40

500,000 536.000 0.92 300,000 307,125 0.52

300,000 235,235 0.40 1,030,000 1,066,050 1.83

2,144,410 3.67 Germany Ikgussa 5.13% 10 Decembcr 2013 EI!H 850,000 85 1,487 1.46 Gerrcsheinicr Aoldings 7 new 1 March 2015 EIjR 455,000 477,750 0.82 C;ildemeister 9.75% 19 July 201 1 ELR 587,000 652.744 112 Hornbdch Daiiinarkr 6.13X 15 Novcrnhcr 2014 ECR 350,000 564,875 0.63 PER[ 5 65% 15 llcccniber 201 I EL:R 1,000,000 1,022,500 175 'I'L 1 5.17% 10 December 2012 E l X 600,000 567,000 0.97

3,936,356 6.75 Greece Antenna TV 7.25% 15 Fchruary 2015 EIJR 550,000 5 17,000 0.89

Ireland Ono Financc I I H . O O % 16 May 2014 ElJR $00,000 5 12,500 0.88 Sniurfit Kappa Funding 7.75% 1 April 2015 EljIi 850,000 907,375 1 5 5

1,419,875 2.43 Italy Lottomatica 8.25% 31 March 2066 EI:R 725,000 798,406 1.37

Japan Sofibank 7.75X 1 j October 201 3 ElJ l i 250,000 260,000 0.45

12

FBC Portfolios Fund SICAV - F&C European High Yield Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

I Maturity Nominal Valuation % of Net

I Security Description Rate Date CCY Value E Assets

Jersey Corsair Jersey 8.78% 24 March 2017 EUR 300,000 300,000 0.51

1 Luxembourg Basell AF n . j w 15 August 201 5 EUR 1,000,000 1,086,250 I .n(i Cirsa Capital I.uxcmtx)urg 7.8836 15 July 2012 EIlR 300,000 296,250 0.51

Codcre Finance 1.uxcrrnhourg 8.25% 15 June 20 I5 E l X I ,OO'',OOO 1,070,887 1.84 Cirsa Finance Luxembourg 8.75X 15 May 2014 ECR 770,000 793,100 1.36

Fiat Finance L4 Trade 6.63% 15 February 2013 EI!R 1,898,000 2.045.095 3.50 Hellas Teleconimunicarions

1.uxernbourg 111 8.50XB 15 October 2013 EUR 1,000,000 1,100,000 1 .H9 Kloeckner Investnient 10.50%~ 15 May 2015 EUR 371,387 441,950 0.76 LDC Luxernboiirg Holdings 11 .OO% 15 May 7014 EUH 500,000 591,250 1.01

1,ighthousc Inremnional 8.00% 30hpril 2014 EL11 1,000,000 1,088,750 1.87 Lecta 7.81% 15 February 2014 EUR 87,000 87,930 0.15

NOMA 1.uxembourg 9.75% 15 July 2011 EI!R 700,000 775,250 1.33 Piaggio Finance 10.00% 30April 2012 EUR 480,000 5 50,080 0.04 Wind Acquisition Finance 9.75%~ 1 December 2015 EUR 1,400,000 1,601,250 2.74

Netherlands Asset Repackaging Trust Culligan Financc Elektrownia Tumw Fresenius Finance IFCO Systems I h d c Finance Magyar Telccom Sensatit Technologies Scnsdrd li.chnt>logics KDC Holding

11.25% H.OO%,

9.75% 5.00%

10.38% 6.00X

10.75% 8.00X 9.00s 7.75%

21 December 2011 ELR 175,000 1 October 20 I4 ELK 500,000 14 March 2011 EI:R 500,000

31 January 2013 EUR 1,510,000 I5 Clctober 2010 EUR 200,000

j 1 1)ecembcr 2049 El 1K 500,000 IS August 3112 EITH 900,000

1 M:iy 2014 LSD 24(1,000 1 May 2016 tl;R 100.000

15 January 2014 EI:R 260,000

1 1,528,048

175,105 557,500 338,160

1 ,502,450 214,000 519.905

1 ,(105,375 179,430 107,787 265,850

19.76

0.30 0.76 0.58 2.57 0.3: 0.S9 1.72 031 0.18 0.46

South Africa Cell C Foodcorp

4,865,562 8.34

935,439 I .61 573,520 0 98

1 July 2012 EI!R 920,000 1 jJune 2012 EUR 536,000

8 63% 8.88%

Supranational NXP

1,508,759 2.53

8.63% 15 Octobcr 2015 ELI1 327.000 334,766 0.57

Sweden Stcna AR 6.13% 1 February 2017 EI;R 116,000 117,305 0.20

United Kingdom British Airways British Energy Holdings

R.75% 23August 2016 GBP 519,000 840,373 1.44 7.00% 31 hlarch 2022 GRP 368.507 543,064 0.93

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 13

I

F8C Portfolios Fund SICAV - FBC European High Yield Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv Descriation Maturity Nominal Valuation % of Net

Rate Date CCY Value f Assets

United Kingdom (continued) CEVA Group CEVA Group Corm Group EcwBat Finance FCE Hank Global Crossing IX Finance Ikating Finance lneos Croup Holdings Incos Vinyls Finance Invensys Pipe Holding TNV Finance Virgin Media Finance

8.50% 10,00?4, 7.50%

10.13% 7.13%

1 1.75% 7.8HX 7.8836 9.13% 9.88% 7.75% 9.50% 8.751%

1 1)cceniber 2014 1 December 2016

1 October 201 1 3 1 January 201 3 10 January 2012

15 December 2014 31 March 2014

15 February 2016 1 Ilcccmbcr LO1 1

15 March 201 1 I November 20 11

15 Decembcr 2013 15hpril 2014

EIJR EUR EUR E m EUR GBP (;w EUR ELR EUR GBP El JR EUR

42 1,000

1,000,000 500,000 500,000 775,000 1215,000

406,000 455,000

706,000

301,000

2,300.000

172,000

274,000

434,683 319,813

1,078,500 545,000 500,625

1,258.806 178,800

2.156,250 430,360 500,500 262.346 78 3,660 295,920

0.74 0.55 1.85 0.03 0.86 2.16 0.31 3.69 0.74 0.86 0.45 1.64 0.51

United States Ahold Finance IJSA Ahold Finance LJSA Central European Distribution C:hcsapcakc Chesapeake Energy General Motors (;cncnl Motors GMhC Huntsman International Huntsinin Intcrnational Iron Mountain Johnsondivcrscy Kronos International Millipore Monientive Performance hlaterials Nalco Owens Brockway Glass Container Rockwood Specialities Group Roy11 Caribhean Cruises TDS Investor TDS Investor TRW Automotive

5.88% 6.50% 8.00%

10.38%, 6.25% 7.25% 8.581

5.38% 6.88% 7.50% 6.751% 9.63?4 6,5( )%

5.88% 9.00% 9.00% 6.7 5(!4 7.63X 5.63% 8.481

10.88% 6.38%

14 March 2012 EUR 14 March 2017 G H P

25 July 201 2 EIjR 15 Novemher 2011 GBP

15 January 2017 E I X 3 July 2013 EIX 5 July 2033 EIJR

6June 2011 EUR 15 November 2013 EUK

1 January 2015 EUR 15 October LO18 ElJR

15 May 2012 EL’R 15Apri1 201.3 ElJK 30 June 2016 EUR

1 December 2014 ElJR 15 Noveniher 2013 EIJR

1 December 2014 I:UR 15 Novemher 2014 EIJR

27 Janmry 2014 EUR 1 September 2014 EIJR 1 September 2016 EUR

15 March 2014 EIJR

825.000 500,000 346,372 196,000 398,000

1,000,000 750,000

1,750,000 200,000 153.000 210,00(J 600,000

1,000,000 500.000 550,000 225 ,ooo

1,000,000 500,000

900,000 175,000 300,000 100,000

10, 128,700

870,375 756,l 86 376,680 303,646 410,935 965,000 71 0,466

l,il9,512 206,000 161,798 216,300 634,500 OO( ),( )( )() 520,000 580,250 243,563

1,022,500 522,500 901,974 201,338 334.500 933 15

17.36

1.49 1 30 0.65 0 52 0.70 1.65 1.22 2.95 0.35 0.28 0 37 1.09 1 70 0.89 0 99 0 42 1.75 0 90 1.55 0.34 0.57 0 17

Total Invcstnicnrs Other Net Assets

Total Se t Assets

12,747,538 21.85

56,543,073 96.01 1,799,880 3.09

58,342,953 I00.00

The a~comp~mying notes form an integral part of these financial sfateiiients.

14

F8C Portfolios Fund SICAV - FBC European High Yield Bond Distribution of Investments by Economic Sector

~

Sector % of Net

Assets

Banking & Financial Scrviccs Chcmicals Telecommunications Auto Manufacturers hledia 1.eisure &Tourism hlanufacturing Paper, Pulp Sr Packaging Building Sr Construction Medical - Products Miscellaneous Diversified Holdings Metals & Mining lnvcstmcnt Cornpanics Electric Ktility Transportation Finance s( Financial Services Entertainment Machinery-Di~~ersifed Food, Hcvcrdgc & Consumer Goods Watcr Travel Medical - Biomcdical/Genetics Diversified Firun Scrv Household Steel Oil & Gas Distribution~Vholesale Retail Electrical Component & Equipment BEvemgC‘S Leisure Time Scmi-Conductor Cable ‘I’clcvision Mining & Steel Software Commerical Services

Total Investments Othrr Nct Assets

16.57 13.96 8.00 7.49 6.67 5 71 4 56 2.86 2.69 2 57 1.95 1.86 1.85 155 1.51 1.44 141 I .37 1.12 0 98 0.96 0.92 0.89 0.88

0.82 0.76 0.70 0.65 0.03 0.57 0.53 0.51 0 49 0 46 0 45 0.40 0.37

96.91 3.09

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report 8 Accounts 2007 15

F&C Portfolios Fund SICAV F&C European Equity

Performance In the six months to 31st March 2007, the net asset value (NAV) of the portfolio rose liy 12.1% (net of fees), compared with the benchmark (Fl'SE World Europe TR Index), which increased by I O . I?&

The biggest positivc sector contribution to pcrformance came from the banking sector.'l'he portfolio owned Bink of Cyprus and Swiss private bank EFG International, both of which delivered strong results, and the portfolio also benefited from not owning HSHC and KBS, which had very poor results in the pcriod. Lack of exposure to ABN Amro was detrimental for performance howcvcr, as the stock performcd wcll on thc back of an approach from Harc1ays:Iherc was also a strong contribution from stock selcction in the pharrnaccutirals sector, as thc portfolio did not hold Astra Zeneca and GlaxoSniithkline, but did own Shire Ph;umaceuticals, which performed strongly.There was a strong positive contribution from the retail sector as both Hcnnes clr Mauritz and Inditcx (which owns clothing retailer Zan) delivcred strong sales and profits. Also. Carrcfour performctl w r y strongly in the first quarter of 2007, as spcculation of a bid from private equity drove the share price highcr. Cairn Energy was the largrst ncgative contributor to performance. Returns from this stock were weaker because of a combination of a lower realised price from the listing of its Indian Oil company on the Miinihai exchange. and continuing

conccrns ahout delays to the construction of the pipclinc required to bring the oil to market. The position in tclecom equipmcnt company Ericsson also contrihuted negatively tn returns, as the company produced results that wcre pcrccived to

bc disappointing.

Market Review Kuropcan equity markets cndcd thc half ycar substantially higher as corporate earnings and accelerating mcrgcr and acquisition (&!&A) activity provided support. More stable oil prices and casing global infhtionary concerns also boosted markets dcspite the continuetl deterioration of the VS housing market. Equity inarkets suffered a short lived but aggressive correction in late February / early March, driven liy factors such as the collapse in thc Chinese equity market, more bad news in L S housing, and commcnts from formcr I!S Fcdcral Reserve Chairman Alan Grecnspan that there w d s a risk of a recession in thc US, a view supported by somc wcaker US economic data. However, continucd corporate activity helped equity markets to recover and elid thc first quarter of 2007 generally higher. By contrast, in the Eurozone, economic growth continued to surprise on the upside, particularly in the key economies of France and Germany, with the German IFO business sentiment survey rising to its highcst level sincc re-unification. l:.urozonc G I ) P growth in 2006 was highcr than cxpcctcd:Ihis momcntum

appears to have continucd into 7007 with German growth in particular rcmaining relatively strong, despite the increase in V4l' at the start of the year.That helped the euro to strengthen further against the US dollar and reach a record high against the yen.Against this background, the ECH continued to mise interest rates, to 3.75%. In the IiK, the market was supported by the sanic factors as clscwhcre, and with inflation remaining abovc target, the Hank of England also raised intcrcst rates, finishing the period at 5.25%. Oil prices were stable although there were further riscs in late March on the back of politicdl concerns and signs that OPEC production cuts were reducing inventories. Global bond markets were volatile, with the yield curve in the 1!S staying inverted, as IJSTrcasurics reactcd to slowing global growth and an expectation of cuts in 13 interest rates in 2007.

The best performing sectors were those such as industrial metals and industrial engineering, which reacted to stronger

dcnmntl and pricing and expectation of more MSZA.The autos scctor was very strong again in rcaction to cxpcctcd corporatc activity For marnplc, :it Daimlrr, where the salc of Chrysler is expected. and :it Volksw-agrn. where Porsche has increased its stake further. Among the weakest sectors werc pharmaceuticals, whcre some larger companies delivered poor results and disappointing pipclinc news, and the oil Sr gas producer sector. The oil price was lower during the period. as larger oil companies protluccd disappointing results as many suffered from higher costs and continuing issues with replacing rcscrves. 'the technology sector was also weaker as brger companies. such as SAP and liricsson, were disdppointing.

16

F&C Portfolios Fund SICAV F&C European Equity (continued)

Outlook While equity mrrkets continued to perform strongly, we believe valuations are still not demanding, although they are now higher than they were a year ago.Tlie oil price rcinains at lower levcls and the massive sums raised by private equity investors has yct to he spcnt.‘l‘hcsc factors, and further & M A rumours, are likcly t o continue to provide support equity markets. Dcspite this, we are more cautious on equity markets than we have been. With margins and return on equity at historically high levels,

and with the global economy clrarly slowing, it is more difficult to see profits rising at the same rate, although we still expect earnings grnwth to he positive. We are not negative on markets as a result of the factors outlincd above, and the continued

strength of corporate balance sheets, and the nccd to invcst.’l’hcrefore, our pnxcss remains firmly conccntratcd on individual stock selection. We will look to identify companies which offer strong valuation support, and the ability to generdte sales growth and strong cash flows organically and independent of the economic ~ycle. We also continue to appreciate companies

which can benefit from restructuring and / or merger processes. M&\ remains a buoyant theme and we continue to look for attractively valucd companies where corporate activity may he a short tcrrn catalyst for strong pcrformancc.

David Moss Portfolio Manager April 2007

hotc The information contained in thib report is historical and not indicdtivc of future pcrforrnancc

Statements contained in this report concerning future performance are the opinions of management and there can be no

guanntec that such opinions will prove to hc correct

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 17

FBC Portfolios Fund SICAV - F&C European Equity Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares € Assets

I SHARES Austria Telrkorn Austria 28,347 530,372 2.05

Belgium Almancorx Comm 5,158 585,433 2.26

Cyprus Bank of Cyprus 27,971 3 17,75 1 1.23

Finland M-lka l Oyj 'H' 45,200 263,064 1.01

France AXxa

I Rhodia Sanofi-Aventis Suez

l 0 , Z j Y

8,369 12,170

169,881 324,986 1.26 467,173 1-80 544,822 2.10 480,472 1.85

1,817,453 7.01 Germany Aarral Rank 13,016 471,179 I .82

Continental 4,965 480,413 1.85 1)aimleiChrpsler 7,869 483,157 1.86

Haycr 13,654 653,207 2.52

E.OS 6,04 1 614,853 2.37 Frcscnius (13rcfcrcnce) 7.212 423,835 1.66 Fresenius Medical Care 3,743 407,688 1.57 Hypo Real Estate Holding 9,290 443,505 1.71 Sietnelis 8.118 640,602 2.51

4,633.439 17.87 Greece

Ethniki General Insurance 68,788 379,710 1.46

S & H Industrial ,MineriIs 22,270 224,482 0.87

Alpha Hank 16,566 392,614 1.51

Greek Postal Savings Hank 25,397 481.019 1.86

Ireland Anglo Irish Bank

1,477.825 5.70

22,008 352,128 1.36

Italy AEhl Iritcsi Sanpaolo iMlinagcmcnt & Capitali

151,356 408,661 1.57 95,264 541,576 2.09

202,HU') 186,658 0.72

1,136,895 4. j 8

18

F&C Portfolios Fund SICAV - F8C European Equity Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv Descriation Number of Valuation % of Net

Shares f Assets

Luxembourg Acrrgy 24,500 391,287 1 .s1

Netherlands Aegon 23,247 346,845 1.34 IJnilever 29,039 633,050 2.44

979,895 3.78 Norway Scantliiiaviaii Propcrty l)cvclopment 26,000 163,217 0.63 Statoil 24,000 48831 3 1 .n9

652,130 2.52 Portugal Energias de Portugal 85.698 344,506 1.35 Sonae SGPS 141,075 238,417 0.92

Spain hcciona Inditex Obrascon Hiiarte

582,923 2.25

2,697 437,319 1.69 10,286 478,608 1.84 18.203 578, I27 2.23

1,494,054 5.76 Sweden Ericsson 'B' 255,740 704,930 2.72 Hcnncs & hlauriti 'H' 8,700 375,111 145 TeleL 'B' 36,400 447.014 1.72

1,527,055 5 8') Switzerland

EFG Iritertlationil 18,942 618,593 2.38

Roche Holding 4,617 61 1,648 2.36

Credit Suisse Group 8,625 463,425 1.79

Ncstlk L63S 767,7534 2 '26

Zurich Financial Services 1,823 393,992 1.52

United Kingdom Aggreko BP Cairn Energy Cairn Energy 'B' Inchoape Ihyds 1'SH Group National Grid Northern Rock Prudential

44,658 91,735 1 4,186 17,461 38,015 59,433 3 1,009 27,941 55,442

2,855,452

334,325 746.242 325.0H4 85,688

490,480 364,438

3 19,607

47 1,469 '186,228

11.01

1.29 2.8H 1.25 0.33

I .8Y 1.41 1.82 2.26

1.23

19 F&C Portfolios Fund SICAV Interim Report & Accounts 2007

FBC Portfolios Fund SlCAV - F&C European Equity Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Valuation % of Net € Assets

United Kingdom (continued) Iksolution 44,043 402,740 1.55 RollsRoyce Group 2,641,148 3,892 0.02 Rolls-Royce Group 44,614 324,955 1.25 Shirc 30,531 47 1,978 1 .x2 Standard Life 66,289 308,698 1.19 Tullow Oil 54,909 295, 15 1 1.14

Total Investments Othcr Nct Assets

Total Net Assets

5,530,975 21 3 3

25,128,131 96 .92 739,310 3.08

25.927.441 100.00

'I'he accompanying n o m form an intcgrdl part of thcse financial statcmcnts.

20

FBC Portfolios Fund SICAV - F&C European Equity Distribution of Investments by Economic Sector

Sector % of Net

Assets

H.inkinp Sr Financial Services Oil SZ Gas Telecommunications Insur~nce Medical - 1)nigs Electric I:tilily

Retail Food, Hcvcrdgc & Consumcr Goods (:hemicals Building L? Construction Medical - Services Electric Iifc Assurance 1Manufacturing Auto Manufacturcrs Auto Rtrts 8r Equipment Oil & Gas Scrviccs Corninerical Services Aerospace & Defense I’apcr, IJulp d Packaging LMitiing Investment Companies Real Estate

23.23 7 49 6.49 6.32 6 28 5.55 5.45 5.40 4 .52 3.92 3.23 2.98 2.74 2 51 1 .n6 1.85 1 5 1 1.29 1.27 1.01 0.87 0.72 0.63

l’oial Invcstmcnts Other Net Assets

96.92 3.08

lotal Net Asscu 1 ( ) O , 00

F&C Porttolios Fund SICAV Interim Report & Accounts 2007 21

F&C Portfolios Fund SICAV F&C North American Equity

Performance Over tlie six month period to 31st March 2007, the net asset value of the portfolio was up 1 95% (net of fees) in euro terms

This compares to a rise of 2 67% hy tlie benchmark FTSE World North rimericln Index.

The portfolio benefited from positivc stock selection, offset by negative allocation effects. Selection within the consumer cyclicals was particularly positive, while also strong in Industrials and basic niaterkals, offsetting negative selection in

healthcare and'klccommunications. Sector allocation was wcak primarily due to underweight positions in utilities and energy.

The portfolio benefitcd pArticUlady from positions in department store Nordstrom. 11' consulting firm Accenture, s o k a r e company' Cadence Design Systems and utiliv company Reliant Energy.The latter positiot~ appreciated by 65% during the last 6 months. The biggest detractor from performance was Motoroh, whose mobile phone business has suffered substantial

rlcclines in profitability over the period.

Market Review The last six months has becn anothcr pcricd of strength for equity markets in the 13, with all major I3 indiccs posting positivc

returns. During this period the markct has hcen driven higher by expectations for lowcr interest rates sometime in 2007, prospects for a more stable and lower oil price cnvironmcnt, as well as continued signs of resilience in the VS economy to housing weakness. Furthermore, substantial le\& of liquidity haw hccn fuclling a hoom in mergers & acquisitions, privatc

equity and leveraged buy-out deals, providing substantial support for investor sentiment and equity valuations.

The Federal ResenTe has kept rates flat since the last increase in JUW 2006 at 5.25X, and Chairinan Ben Bernanke has heen

cautiously monitoring the balance between economic growth, inflation and the deteriorating housing environment with

respect to his next directional move. The housing mirket has failed to find a bottom so far, whilc inflationary pressures continue to be kept at bay, and this has fuelled optiniism that the next change in interest rates will he downwards. Importantly, whilc the ctrncrgence of an acceleration in sub-prime mortgage defaults is causing great concern over a potential credit and liquidity crisis i n thc lis, it also provides the Fcdcral Kesemc with an addcd inccntive to lowcr interest rdtes.'I'hrough thc

period, the pmspects of lower interest rates led to outperformance in most cyclical sectors.

VFhilc cxpcctations for lowcr raws woultl usually lcad to strong outperforniancc in rhc financials sector, the suh-prime developments in recent months have eroded away many of those gains. In fact the strongest performance through the period

came fmm the bisic materials and energy sectors, as well as the utilitics and telecommunications sectors. A combination of

mergers & acquisitions activity and continued strength in commodity markets is primarily behind the strength in these sectors.

The healthcare sector has been on the receiving end of sustained bad news anti negdtive sentiment. The sector has been

plagued by high-profile bnnded drug patent challenges and expirations, political sabrerattling over cheaper rlmg and

healthcare services pricing, as well as generd malaise over failures in c1inic:rl trials for high-profile pipeline drugs. As such the scctor was the worst pcrfornicr during the pcriod. although it still produccd a positive return.

Outlook Thc reccnt rlcvclopmcnts in the sub-primc mortgage market havc sparked much dchatc amongst invcstors over the ahility for the US economy to avoid recession. However. our view on the U S economy remains the same and we expect decelerating growth through thc )-car, with intcrcst rates starting to decline at some stage in 2H2007. So far tbc suh-prime defaiilts seem to be related to poor underwriting standards by the lenders rather than to deteriorating credit trends: and 1;s employment

remains a healthy support.

22

F&C Portfolios Fund SICAV F&C North American Equity (continued)

Outlook (continued) Against this backdrop we see potential for solid returns in equities in the next 12 months,driven hy earnings growth and slight

PE multiple expansion ;is interest rates start to fall. IIowever, carnings growth is btill decelerating and we therefore continue to cxpcct cnmpanics cxhibiting stronger carnings growth than the market, supported by consistent free cash flow production, to hcnefit from scarcity vzlue.The portfolio will continue to exploit such opportunities accordingly.

Simon Clinch Portfolio Manager April 2007

Mtc: ‘I’hc inforniation containctl in this rcport is historical and not indicativc of future performance.

Statements contained in this report concerning future performance are the opinions of nianagenient and there can he no

guardntcc that such opinions will prow to bc correct.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 23

F&C Portfolios Fund SICAV - F&C North American Equity Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares 6 Assets . . . . - - - - .. .. . . .. .

SHARES Bermuda Arccnture ‘A’ 46,134 1,330,941 1.29 Tyro International 21,720 512.962 0.49

1,843,903 1.78 Canada

EnC:ana 14,530 550,903 0.53 ,Watiulife Financial 27,217 70 1,500 0.68 Royal Bank of Canada 11,486 428,779 0.41 Suncor Energy 7,657 436,714 0.42

Canadian National hilway 12,160 401,993 0.39

Trck Cominco ‘B’ 7,862 410,839 0.40 ‘I’ELII’S 24,102 30 1.61 9 0.87

Cayman Islands ACE

3,832,347 3.70

9,831 4 19,909 0.41

United States Allstatc Altria Group Anierican Eagle Outfitters Anierican International Group Ameriprisc Financial (W/I)

AtnerisourccHergen AMB Anheuser-Busch A p l l o Group ‘A’

hssurant A?’&’l’ AWYd

Awn Products Hank of Amcrica Bear Stearns Hest Buy Biogeii Idec BMC S o h a r e Boeing Ckicnce Design Systems Capital One Financial Csrdi n al Hcal th CenturyTel Chevron Chubb Cisco Systems CIT Group Citigroup

10,125 38,132 17,521 9.012

13.740 18,820 17,460 24,206 1 1,730 10,221 25,966 42,181 14,225 51,557 3,240

28,073 21,900 28,520

135,809 36,109 11,490 28,380 50,726 11,52i

17,O 16

39,530

86,227 13.954

455.204 2,506,453

393,334 453,467 587,636 743,136 397,977 914,316

410,324 766,404 372,900 396,754

1,969,038 364.649

1,023,817 727,541 657,333

1,132,489 2,140,982 2,039,662

627.439 960,021

1,70 1,097 445.842 755,446 ‘152,770

3,313,792

385,468

0.44 2.42 0.38 0.44 0.5? 0.72 0.38 0.88 0.37 0.40 0.74 0.36 0.38

0.35 0.99 0.70 0.64 I .09 2.07 1.97 0.61 0.93 1.64 0.13 0.73 0.53 3.20

1 .90

24

F&C Portfolios Fund SICAV - F&C North American Equity Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv DescriDtion

% of Net Shares f Assets

Number of Valuation

United States (continued) Citizcns Communications CMS Energy CNA Financi:il Colgatc-I%~lrnolivc Conicast 'h'

Cooper Industries 'A' Countrywide Financial Cutiuiiinh cvs DartLen Restaurants

I

Dedn FOodS

I k l l DENTSPLY International Devon Energy

Electronic Data Systcms Exxon Mohil Frecport-McMoRan Copper & Gold 'B' Gcneral Electric Gcneral Motors (;enworth Financial 'A' Goldman Sachs Group

Hashro Hrwlett-Pdckard Huni;ma 1AC Interhclivc IBM ITT J.C. Penney Johnson &Johnson JPMorgan Chasc Kroger

I.cxmark International 'A' Liberty Media Capital 'A'

Lockheed Martin Illar.tthon Oil Masc0 MBM McDonald's McGraw-Hill McKestion Merck hierrill 1,ynch hlctlifc Microsoft

i DokAf Tree Stores

<;c,og1c 'X'

Lam Iksrarch

F&C Portfolios Fund SlCAV Interim Report & Accounts 2007

38,920 39,770 18.141 20.706 35,783 44774 24,274

5,755 17,668 12.700 3 1.402 28,684 46,798 13,340 22,410 25,310 78,044 24,585 28,750 15,190 53,926 5,641 1,149

21,168 56,947 13,060 23.050 17,682 9,459 9,267

48,564 60,518 23,268 14,942 24,602 9,526

20,385 6,793

20,190 10,980 24.069 15,746 1 1,860 26,636 13,491 I 6,160 92,310

435,552 529,909 585,145

1,055,222 695,089

1,507,884 61 1,256 623,448 45 1,520 391,581

1,098,682 498,357

1,147,267 691,216 64 I .484 536,858

4,407,830 1,218,116

760,985 34%396

1,410,416 872.520 394,061 453,498

1,71 i ,096 567,2 14 650,659

1,247,627 427.103 569,935

2,190.653 2,191,677

492.044 529,496

1,076,602 788,592

1,480,465 502,547 41 4,107 538,274 81 1,669 741,155 519,713 880,689 824,770 76 3,907

1.925,803

0.42 0.51 0.57 1 .00 0.67 1.46 0.59 0.60 0.44 0.38 1 -06 0.48 1.11 0.67 0.62 0.52 4.26 1.18 0.74 0.34 1.36 0.84 0.38 0.44 1.65 0.55 0.63 1.21 0.41 0.55 2.12 2.12 0.48 0.51 1.04 0.76 1.43 0.49 0.40 0.52 0.78 0.72 0.50 0.85 0.80 0.74 1.86

25

FBC Portfolios Fund SICAV - F&C North American Equity Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares € Assets

United States (continued) Monsdnto 12,357 508,459 0.49 Motorola 131,650 1:741,340 1.68 Ncwell Riibhcrmaid 43,022 1:OOl ,238 0.97

Ncwmont Mining 13,229 41 5,814 0.40

Nike '€3' 5,121 407,334 0.3') NiSource 22,443 410,590 0.40 Nordstrom 20,498 812,309 0.78 Novellus Systems 19,920 477,460 0.46

Nucor 13,738 667.778 0.65 Occiclcntal Pctroleum 25,368 936.370 0.90 Omnicom Group 6.307 483,353 0.47

Pfizer 134,703 2,547,045 2.46 PG&E 28,321 1,023,321 0.99 PMI Group 21,507 728,0(18 0.70

Qwest Comniunications International 62,941 423,564 0.41

IkJytheon 19,678 772,743 0.75

Oracle 48,400 656,855 0.63

Prudential Financial 11,160 754,025 0.73

Radian Group 23,307 957,473 0.92

Keliant Energy 38,370 583,635 0.56 Rohm Sr Haas 1 1,560 447,551 0.43 SdfCCO 10,307 51 2,534 0.50 Safeway 203 10 557,046 0.54

Scars IIoldings 3.031 408,762 0.39

Schering-Plough 71.1 19 1,358,070 1.31

Sherwin Williams 10,875 537,604 0.52 SP1)Kl'rust Series 1 17,945 1,907,471 1 .X4 Staples 40,307 779,649 0.75 Travelers 38,182 1,479,663 1.43 LnitedHralth Group 17,660 700,240 0.68

Vcrizon Communications 23,440 665,353 0.64

Wcstcm I!nion 31,362 51 5,305 0.50

Xerox 31,448 397,602 0.38

Total Investments Other Net Assets

Total Net Assets

96,964,784 93.67

99.56 456,379 0.44

103,061, I43

103,517,522 100.00

Ihe accompanying notes form an intcgral part of thcse financial statcmcnts.

26

FBC Portfolios Fund SICAV - F&C North American Equity Distribution of Investments by Economic Sector

Sector

% of Net Assets

. .

Banking & Financial Services Insurance Oil Sr C A S Tclecommunications Rctail Mcdical - Drugs Software Acrospace Sr Defense Medical ~ Products Food, Beverage d Consumer Goods

Information Technology Manufacturing C:ornputcrs

I

‘roi)acco Electric Utility Metals & Mining Media Mutual Funds Medic31 - Services Misccllaneous (:osmctics / Pcrsonal Care hlcdical - Wholesalc lkug Distribution Consulting Services Entertainment Chemicals Medical - BiomedicaVGenctics F.-c:cimmrrce/Services hlacliincr!-I)ivcrsifie~ Energy Semiconductors Financial Services Huilding & Construction Mining Textiles Transportation Airline Officc/Husiness Equipmcnt Internet Commerical Services Auto Manufacturors

Total Investments Other Net Asscts

13.99 9.55 9.31 6.78 5.64 5.06 4.56 3.27 3.23 2 96 2.84 2.83 2.69 2.42 2.14 2.23 1 .n5 1 .R4 1.73 149 1.38 1.32 1.29 I .20 0.92 0.70 0.63 0.60 0 56 0.5 1 0.50 0.40 0.40 0.39 0.39 0.39 0.58

0.37 0.34

0.38

99.56 0.44

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 27

F&C Portfolios Fund SICAV F&C Japanese Equity

Performance During the six months to 31st March 2007, the Japanese market experienced significant stock market volatility and the portfolio underperformed, returning a rise of 0.5% (net of fees) compared with the benchmark increase of 2.3%. However. stronger retiirns were conccntratcd in the first half of tttc rcporting period, hoostcd by overweight sclcctions in JFE holdings,

Toyota and Isuzu Motors.?‘hc latter company’s share price was supportcd by a global expansion strategy andToyota’s increased

financial st:& in the company. Ncverthelcss, the start of the new’ year proved to be a niore difficult environment. as investors

asscssed the impact of a potential rise in intcrest rates. Pcrformance from our ovcrweight position in Orix, Japan’s largcst non-

bank financial. proved lacklustre. Returns from Sumitomo Mitsui Financial Group were also weaker following investor caution ovcr the company’s earnings. Despite this, the portfolio benefited from our overweight position in Mitsui & Co, which was

supported by speculation over the sale of its stake in iron ore exporter Sesa Goa, and news it is expanding its opcmtions in the Middle East.Although the last three months have proved to he a morc difficult trading environment, which translated into

wcaker performance, the Fund made positive absolute progrcss over the reporting period a b a wholc.

Market Review

‘I’he six-month reporting period saw considcrahle volatility in Japanese cquitics. Early on, this was causcd in part by speculation of a rise in official interest rates by Japan’s ccntnl bank. However, the Nikkei suengthcned towards the end of 2006 and tinished the 1:isr quartcr of the ycar in positive territoryThe Bank ofJapan (RoJ) maintained infrrest ratch at 0.25%

with falling consumer demand cited as thc main reason. Data rclcased in Ikxmhcr showcd a strong incrcasc in exports with

thc low yen supporting Japmese products particularly in Asia and Europe. From a sector perspective, investors showed a shift towards defensive sectors amid conccrn over the impact o f a potentially slowcr lis eronomy.Japanese equities startcd 2007 robustly,hut then fell sharply against a worldwide dccline in stocks towards the end of February, amid concerns that this would

lead to an unw-inding of yen-carry trades. Stocks rebounded through the middle of the March, but fell again after hitting resistance as a result o f subprime loan problems in the 1:S.A statement by rhc U S Federal Reserve on 21 March indicating a

shift to a more neutral monetary policy proved niore supportive, and Japanese stocks finished the second half of the reporting period in positive territory

Outlook l h c market’s broad view of Jdpan’s economy rcmains cautious, causing some analysts and companics to revise corporate

carnings forccasts for the full year, and dampen invcstor confidence. However, our outlook on the domestic economy remains positive. although we are cautious on the external economies, and hence Lyclical sector.We believe the market has overplayed

the prospect o f cooling in the domestic Japancse economy, and thcre remains considerable economic upsidc.The key to future performance will be companies’ forecast earnings for 2008, as any consenaive estiinatcs could reduce prices furthcr.

Nevertheless. a relatively unlcvenged consumer, low interest-nte environment, strengthening corporate sector, and a steady

repbccmrnr of agcing capirll stock remain positive. With Japan pOtentiAlly emerging from deflation into an inflationary period, we helieve the market underestirnatcs the upside this could have for investors. Meanwhilc. a strengthening labour market and rising asset prices should improve consumer sentiment and spcnding in the tiem fiiture.With the aforementioned in mind. we maintain our bias towards ccmpanics which can bencfit fnmt a rccovcry in domestic economic activity, such as real cstate and financials, and cxporrers with niche technologies.

Jamie Jenkins Portfolio Manager Aprll 2007 Note: The information contained in this report is historical and not indicative of fiiture performilice

Statements containcd in this report conccrning future performance arc thc opinions of management and thew can be no

guarantee that such opinions will prove to he correct

28

F&C Portfolios Fund SICAV - F8C Japanese Equity Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares € Assets

SHARES Japan Ariwntesr Asahi Glass Astellas Pharma Dank ofYokohama Canon Ihicel Chcrnical Inrlustrics Daikin Industries Dniwa House Industry Denso past Jdp;in I<ailWd). Hiroshima Dank Hitarhi Construction &Pachincry Honda Motor Hoya Inprx IIoldings Isutii ,Mutors lzurni JFE Holdings JTEKT Kanrka Kansai hint Kcihin Ke yence Kitz Marui Millea Holdings Mitsubishi Estate Mitsubishi UFJ Financial Group Mitsubishi UFJ I.casc & Finance Mitsui Mitsui Fudosan Mizuho Financial Group Nidec Nippoii Light Metal Nippon Oil Nippon Stccl Nippori ‘I’elcjiraph 8 Telephone Nissan Motor Nomura HcMings Noniura liesearch Inslitutc NTT I;rban Development Onward Kashiyama ORIX

I’arco Srcom Sekisui Chemical

F&C Portfolios Fund SICAV Interim Report 8. Accounts 2007

22,500 239,940 58,960

199,000 7 1,900

225,000 23,500

142,860 65,500

652 157,000

78,970 66,200

26 1 5 19,000 43,100 56.500 87,700

171,150 59,900 7,360

1 14,000 68,120 66,300 75,680

699 2(>,350

209,560 117,360

745 24,400

540,000 177.000

no,ooo

98.000

280.000 Ton

148,250 6 I ,n50

260,880

784 77,000 16,640 68,400 32,100

22 1 . s w

748,084 2,530,552 1,904,089 1,112,009

2.893,3 3 5 1,151,449

612,517 1,755,532

3,805,016 647,755

1,622,359 2,063,337 1,645.51 1 1,692,415 1,949,939

600,050 2,507,499 1.1 5 1.293

70(1.259 1,095,652

1,244,120

1,823,818

1,018,631

775,457

1,837,664 I ,861,9on

9Hh,h4H 2,930,875 2,581,442 1,594,713 1,178,880 1.146.585 1.075.715 1,473,854 2,804,061 2,094,644 2,313,778

625,761

5,910,102

1,364,580 1,375,597

802,298 3,247,565

652.249 1,116,242 1,322,524

0.63 2.12 1.60 0.93 2.42 0.96 0.51 1.47 1.53 3.19 0.54 1 .36 1.73 1.38 1.42 1.63 0.50 2.10 0.96 0.59 0.92 0.85

1.04 0.65 0.52 1.54 1.56 4.95 0.83 2.45 2.16 3.01 0.99 0.96 0.90 1.23 2.35 1.75 1.94 1.14 1.15 0.67 2.72 0.55 0.94 1.11

29

F8C Portfolios Fund SICAV - F&C Japanese Equity Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares € Assets

Japan (continued) Seven 81 I Holdhgs 95,700 2,184,100 1.83 Sharp 123.550 1,782,932 1 .49 Shin-Etsri Chcmical 4x,700 2,225,994 1.86 SMC 19,400 1,949,844 1.63 Sony 54,000 2,056,301 1.72 Sumitorno Chcmical 298,560 1,689.226 1.42 Sumitomo Elcctric Industries 178,6(1(1 2,036,(i31 1.70 Sumitomo Mitsui Financial Group 64 1 4, ~60,216 3.65 Sunlitorno Realty Sr Development 26,890 764,125 0.64 Taiheiyo Cement 516,300 1,710,039 1.43 Takcda Pharmaceutical 74,850 3,678,2 18 3.08 TDK 19,740 1,282,520 1.07 Terurno 50,700 1,479.404 1.24 ‘Ihkyo Elcctric Power 82,740 2,119,760 1.78 Toyo Engineering 275,000 1,075,162 0.90 Toyota Motor 168,440 8,084,596 6.77

Total Investments Other Net Assets

‘IhtA Net Assets

1 17,N 1 176 98.66 1,599,956 1.34

119,&?1,132 100.00

l’hc accompanying notcs form an intcgral part of thcsc financial statcmcnts.

30

F&C Portfolios Fund SICAV - FBC Japanese Equity Distribution of Investments by Economic Sector

% of Net Sector Assets

Ranking Cli Financial Services 18.57 Auto Manuhcturcrs II.HX Electric, Elcctronic Equipment and Engineering 8.32 nuilding & Construction 6.13

5.51 Real Estalc Mcdical - Drugs 4.68 Metals 8; Mining 4.29

Chemicals 5.75

Rctail 3.40 Auto Parts 8r Equipment 3.34

Mach incry-Diversified 2.99 Transportation 3.19

I)istribntion/Wlholesale 2.45 Officc/Rusiness Equipment 2.42 Ttlecommunications 2.35 Oil & Gas 2.32 Hcctric Ltility 1.78 Electrical Component & Equipnient 1.70 Manufacturing 1.57

1.54 I nsiirance 1.24 hlcdiral - Products

Miscellaneous 0.94 .Metal Fabricate/Hardwarc 0.65

Information Technology 1.14

Building Materials 0.51

Total Investments 98.66 Other Net Asscts 1.34

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 31

~ F&C Portfolios Fund SICAV F&C Pacific Equity

Performance

Performance was positive in both absolute and relative terms over the six months to 31st March 2007.The portfolio returned

22.72% (net of fees) compared with the benchmark (FTSE AW Developed Asia Pacific ex Japan TR Index), which returned

19.58%. Strong country allocation and stock selection helped the portfolio to outperform over the period, while at a country

level, heing overweight in Singapore. and holding an underweight exposure to New Zralilncl contributed positivcly.

Security selection in Singapore wfi dynamic and boosted performance oncc morc, as thc region yet again provided significant

contributions to the portfolio. Of particular note was the progress of our holding in Ohm International, a supply chain

mdnagcr. I’ortfolio rcturns were also supported by our overweight position in Singapore’s SembCorp Industries, the

pcrformancc of which was drivcn by ncws thc company has won a series of contracts. In addition, our overweight position

in uranium miner Energy Resources of Australia also delivered positive results, as the company benefited from increases i n the

price of that rnctd.Although thc first half of thc rcporting pcriod saw thc portfolio’s zero weighting to strong performers - such as Hong Kong Exchange, Zinifex, and Chinese Overseas Land & Invcstmcnt - detmct from perforntance, performance

over the last six months has remained robust overall.

Market Review The six month reporting period to lhc end of March 2007 proved positive for dcvclopcd Asia-Pacific markcts. Singdpore

provided kcy support. ;is that market wis supported by a flow of strong corporate profit numbers, news of a cut in the

corporite txx r:ite and projections of stronger GDP growth over the course of 2007. In the first half of the period performance

was supported by contributions front sectors siich as telecoms, rimerials and financial stocks, and regional markets were

encoufiiged by ;in easing in global enerby prices. Key economic indicators across the region remained positive, supported by strong cxport growth and casing inflationary pressurcs. Similarly, a healthy corporate environment and increasing foreign direct investment was also beneficial.

I n Australia, strong doriiestic economic data bolstered the market, while M&A activity also remained strong. and firming

commodity prices underpinned sentiment in the Austrdlian resources sector. In Hong Kong. a sharp fxll on the Chinese stock mxrket weighed hcavily on the local bourse in Felx-uary, although subsequent progrcss was more rcsilicnt.l’hc Ncw Zealand

market hccamc more subdued towards the end of the pcriod over concerns that interest mtes would need to rise hirther to

contain domcstic dcmantl and inflationary prcssurcs.

Outlook

Despite the recent market correction, valuations in Asia still look to be quite hill. However, we belicvc that Asian equities will derive soiiie support from domestic growth, and earnings expansion. In addition, the prospect that Asian economies will

become less tied to the lJS (the percentage of total exports to the CS is declining) reinforces our view that thcrc will be opponunitics to gcncrxc returns. Continued demind from Chini is likely to support the resources sector, and we continue to

favour companies well placed to benefit from this theme, particularly in Australia.

32

F&C Portfolios Fund SICAV F&C Pacific Equity (continued)

I Outlook (continued) Although tlic effects o f a weaker US economy ran be significant in this region and should not be underestimated. strong

current accounts and more relaxed fiscal policy- in Asia should prove beneficial for domestic demand. Markets havc retained a

degree of liquidity Nevertheless, downside threats to further progress inchide the possibility that intlationary pressures could

increase, and have grcatcr impact on monetary conditions, which could prow more restrictive.

Calum Graham Portfolio Manager April 2007

I Notc. The information contained in this report is llistortcal and not indicative of future performance.

Statements contained in this report concerning future performance are the opinions of management and there can be no Ruarmec that such opinions will prove to bc corrcct.

FtlC Porttolios Fund SICAV Interim Report & Accounts 2007 33

F&C Portfolios Fund SICAV - FBC Pacific Equity Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares € Assets

SHARES Australia A M P

Australia rYr New Zcaland Hanking Group Habcock & Hrown Infrastructure Group BHP Billiton Hillahong Intcrnational Hrdmblcs Commonwealth Bank of Austnlia CSL Downer ED1 Emeco Holdings Energy Resources of Australia APacquarie Airports Macquarie Hank Metcash National Australia Bank Orica Oxiana QBE Insurance Group Rinker Group R i o Tinto buncorp-Metway Toll Holdings United Group Weshrmers Westficld Group Westpac Hanking Woodside Pctroleum Woolworths WorluyJ’wscms

177,000 77,000

478,000 131,000

51.OOO 193.000

19,500 17,000 74,000

3 1 4,000 j0,ooo

200,000 2 1,500

207,000 72,000 64,000

280,000 55,000 27,000 51.500 25,678 7 1,000 44,000 32,000 62,000 39,000 41,000 82.000 4h,1 11

1,112,66$ 1,585,637

529,242 2.369,040

515,302 1,589,244

592,969 847,214 305,345 357,212 504.593 482,H12

1,076,419 617,437

1,759,904 081,597 476,036

1,049,541 294,860

1,501.990 323,147 880,617 362,847 730,873 771,61 h 62 1,756 979,594

1,348,957 775,297

2.51 3 13 1.20 5.35 1.16

3.59 1.34 1.91 0.69 0 76 1.14 I .09 2.43 140 3.98 2.22 1.08 2.3i 0.67 3.39 0.73 1.99

1.65 1 74 1.40 2.21 3.05 1.75

0.82

Bermuda Esprit Holdings

25,121,762 56.75

104,600 915,642 2.07

Cayman Islands Shui On Land 737,000 450,308 1.04

China Indubtrial & Coinmcrcial Hank of China ‘H’ 1,090,000 457,745 1 04 Syncar Food Holdings 520,000 il3,HlH 1.16

Hong Kong ChcunR KonR (Holdings) China Mobile Citic Pacific

971,563 2.20

134.000 1,270,645 2.87 23 1,800 1,580,178 3.57 185,000 512,617 1.16

F&C Portfolios Fund SICAV - F&C Pacific Equity Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares E Assets

Hong Kong (continued)

Hang Lung Properties 264,000 j 5 3,068 1.25 1.i & Fung 270,000 635,533 1.44

Sun Hung Kai Properties 154,000 1,333,311 3.01

7,565,212 17.09

CNOOC 1,410,000 926,046 2.09

New World Ilevelopment 443,688 753,814 1.70

Singapore CapitaLind City Developments C~rybpring Infrastructure Trust Ezra Holdings

Kcppcl IAnd Olani International SernbCorp Industrics StarHiib

Keppel

273,000 128,800 501,000 96.000

185.000 I ~ > U , 0 0 0 638,000 595,000 396,580

‘Ihtal Invc~tmcnt~ Other Net Assets

1,079,017

368,808 256.1 18

1,736,606 788,513 9 6 4 3 5

1,499,212

929,062

558,408

8,180,279

2.44 2.10 0.83 0.58 3.92 1.78 2.18 3.39 1.26

18.48

45,213,766 97.63 1,050,199 2.37

44,263,965 100.00

l h c accompanying notcs Corm an intcgral part of thcsc financial slatcmcnts.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 35

F&C Portfolios Fund SICAV - F&C Pacific Equity Distribution of Investments by Economic Sector

I % of Net Sector Assets

I Real Estate 17.93

I 14.04 Hanking & Financial Services

lrl~tals & Mining 10.96 Holding CompaniesDiverse 5.08 Insurance 4.89 Telecon~mun ications 4.w Building Sr Construction 4.74 Oil Sr Gas Rctail

4.31 4.21

Coinmerical Services 3.59

DistributionPVholcsale Food Enginecring & Construction Transportation Manufacturing Medical - Drugs

3.51 3.34 2.57 2.57 2.22 1.91

Miscellaneous Maniifdcturing 1.65

Food, Beverage & Consumcr Goods Energy Airport Invcstrncnt Cornpanics Machincry-constructiongrMining

1.40 1.20 1.09 0.83 0.76

07.63 2.37

'I'otnl Net Assets 100.00

36

F&C Portfolios Fund SICAV F&C Global Emerging Markets Portfolio

I Market Review

Emerging markets enjoyed strong gains over the period under review, with the MSCI Emerging Markets Index gaining 20.4%

in IJS dollar terms. The sector outperformed its developed market peers. From a regional perspective Latin America

outperformed EMEA followed by Asia.

In Latin America,Argentina (+30.6%) and Urdzil (+32.3%) were the best performers of the main markets. Brazil was driven

higher as earnings from mining giant CVRD came in above consensus, political sentiment improved, retail s d k s data WJS robust

and interest rates were cut further. A resumption of strength in metals and energy prices in March also provided support.

Argentina was a strong prrfornicr as investors became increasingly optimistic about growth for 2007. Peripheral niarkct Pcru (42.4%) surprised investors with a strong surge ovcr tlic first few months of 2007.

Within E M M , Russia gained 13.7% but was the laggard of the rcgi0n.A rccovcry in the oil price provided support later in the

period, although the market also saw a rotation away from natural resource stocks and into companies exposed to the npidly

growing domestic economy within telecomniunications and banking. In Poland (+34.0'!6) buying by h c d l pension and mutual

hinds provided strong support. South Africa (+37.6%) was supported by the strength in metals prices while Turkey (+29.4%)

W i l S also among the strongest performing markcts in the region.

Within Ash, China (32.8%) continued to gain momentum at thc end of 2006 with investors encounged by the release of solid

industrial production and retail sales data. In addition, the successful and heavily over-subscribcd 11'0 of the bank ICDC

supported sentiment. However volatility returned to the market in February after authorities announced measures to cool the

stock market.The local index fell over 3% in one day and sparked a sell off in global equities. India (+12.5%) was supported

by- solid carnings growth. In Thailand (+5.5'%) the market was volatilc, weighed down by political instahility following the

finance minister's resignation, high oil prices, the strnng baht and proposed changes to investment rules. Korea (+8.0%) strugglcd against a backdrop of cconomic (lata that continued to point to a marked slowdown in economic activity.

Performance The portfolio ro<e 20.33%,net of fees,during thc period under review undcrpcrforming thc lndcx which rose LO 40%. In terms

of asset allocation,our overweight position in Brazil was positive for performance as strong domestic economic tlata continues

to support the market. I3eing underweight in Taiwan. which undcrpcrformcd, was also supportivc of rclativc performance An

underweight position in South Africa was negative for relative performance however, with the market being supported by ongoing strength in reso~~rce prices.This was despite dPa showing a deteriordting currcncy and current account.

Stock selection in Russia and China was positive for performance relative to the beidmark. In Russia. Sberbank and energy

company 1.IF.S both made furthcr strong gains on the back of improving domestic economic data and rising cncrgy production.

Sberbank also benefited from the removal of a blessed share system which had previously restricted foreign ownership. In

China, stock selection was particularly strong among financial services companies. China Lifc Insurance, China Merchsnts

Dank, Ping An Insunnce and newly listed ICBC all made strong gains as the sector benefits from the positive sentiment

surrounding recent listings and other new listings in the pipeline. Stock selection in Brazil detracted from pcrfurmancc. mainly

duc to our undcnvcight position in mining giant CVRI) which sugcd on strong metals prices.

FBC Portfolios Fund SICAV Interim Report & Accounts 2007 37

F&C Portfolios Fund SICAV F&C Global Emerging Markets Portfolio (continued)

Outlook Within portfolios we prefer markets which offer a11 appealing domestic growth profile. In Latin America we continue to like

Brazil whcrc strong ccclnomic growth is likely to he underpinned hy further interest rate cuts over the conling year,We remain

neutral in relation to Chile but underweight in other markets where domestic growth is patchy+ or valuations appear stretched.

Within EMIih we continue to Favour Turkey, particularly over thc longcr term as potential for EU accession should enhance

political and economic interdction and enhance growth potential. Interest rates also appear to have peaked, bringing the prospect of a more accomnioclative monetary outlook. Furthermore, a looming presidential election in Turkey brings some short-tcrm risk. panicularly as thc incunihcnt reform-ricntcd and popular prime minister may seek the presidency leaving a

vacuum in the prime ministerial role. I n Asia we like Th;ul:md and Korea which are presently untiewvaluetl by the market.

Despitc somc political unccrtainty in ‘I’hailand, this has already bccn discountcd by thc market. Following thc strong gains hy

China over 2006, we are now less positive and have reduced our weighting.

San Mahtani Portfolio Manager

April 2007

Note: The information containcd in this report is historical and not indicative o f futurc performance.

Statements contained in this report concerning hittire performance are the opinions of management and there can be no guardntec that such opinions will prove to be corrcct.

38

F&C Portfolios Fund SICAV - F&C Global Emerging Markets Portfolio Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

SHARES Argentina Ilanco Macro 15,300 519,282 0.17

Brazil Banco Itdu Holding Financeira 102,700 3,589,059 1.20 Companhia de Concessoes Rodoviarias 285,000 3,805,264 1.27 Localiza Kent A Car 103,900 3,184,065 1.07 Lojas Amcricanas (Preference) 22,200,000 1,402,741 0.47 Lojas Renner 222.800 2.891,397 0.97 1.upntech 157,300 2.820,452 0.04 NFI' Scrvicos tlc Comunicacao (Prefercncc) 223.738 3,031,892 1 -02 Pet mlms 353,600 7,929,962 2.65 PCtrcJhrJs ADR 28,578 2,843,797 0.95 Ilossi Liesidencial 125,200 1,430,057 0.48 'I'ractehel Enegia 378,100 3.307,96 1 1.11 IJnibanco ADR 24,600 2,151,516 0.72

Chile Banco Santandrr Chile ADR La Polar

65,402 377,851

3,26 1,598 1.09 2,002,525 0.67

China China Construction Rank 'H' China Merchants Hank 'H' China Shipping Development 'H' ktroChina 'H' Ping An Insurance Group 'H'

5,264,123 1.76

6,567,000 3,372,858 1.26 1,079,100 2,187.127 0 73 1,638,000 2,615,686 0 88 5,566,000 6,566,459 2.20

666,000 3,238,284 108

Egypt Commrrcial International Hank El hcwxdy Caldes Holding Orascom Construction Industries

18,380.4 14 6.15

245.609 2,395,186 0.80

70,495 3,539,446 1.19 196,146 1,5 15,106 0.51

Hong Kong China Merchnnts Holding:, Intern2 tional China Mobilc China Kcsources Entrrprisc Nro-China Group Holdings

~~

7,449,738 2 50

3,429,666 1.15 5,109.203 1.71 2.036.0 19 0.68 1,140,872 0.58

India Dank of India Bh;Irat Heavy Elcctricils

11,715,850 3.Y2

468,?40 1,671,556 0.56 64,770 3.224.799 1.08

F&C Porttolios Fund SICAV Interim Report & Accounts 2007 39

F&C Portfolios Fund SICAV - F&C Global Emerging Markets Portfolio Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

India (continued) G ~ q a n t Ambuja Cements Reliance Communicition Rcliance Industries State Bank of India GDR Tata Motors

Indonesia F T Astm Intcmational Pr Telekomunikasi Indonesia

1,266,730 3,039,801 1.02 397,514 3,647,057 1.22 75,764 2,300,682 0.77 49,657 3,029,077 1.01 36,334 562,167 0.19

5.85 17,475,139

1,9s9,000 2,882,925 0.97 2,592,100 2,817,809 0.94

5,700,734 1.91

Halyk Savings Hank of Kazakhstan G1)H n7,0n3 2,046,451 0.69 Kazakhstan

Korea

Amore pacific 4,042 2,227,959 0.75 Ihewoo Moior Sales 82,760 2,589,697 0.87 Daewoo Shipbuilding CG Marine Engineering 84,510 3,198,577 1.07 Daishin Securities 122.880 2,928,054 0.98 GS Engineering & Constmction 42,757 3,851.382 1.29

KCC 8,329 2,473,081 0.83

NHN 2 1,997 3,259,857 1 .og Sanisung Elcctronics 20,618 12,441,802 4.16 Shinhan Financial Group 65.500 3,743,057 1.25

(;S Holdings 131.300 5,165,489 I .73

Kookmin Bank 68,726 6,198,859 2.07

SK 32,434 3,153,666 1.06

51,232,080 17.15 Malaysia

Hong Leong Bank 874,000 1,504,934 0.50 Maxis (:omrnunications 985,600 3,394,105 1.14 Resorts World 731,300 7,576,608 1.20

8,475,737 2.84 Mexico

Axtel 412,400 1,639,516 0.55 Corporacion GEO 'B' 284,000 1,651,148 0.55 1:mprcsas ICA Sociedad Controladora 1,062,617 4,101 ,J 12 1.37 Ilrhi, llcsarrollos Ilrhanos 662,800 2,188.052 0.04 Wal-Mart de Mexico ' V 697,043 2,976,281 1 .OO

Poland Bank I'ekao

. -

13,156,309

30,424 2.707.RR4

4.41

0.91

F8C Portfolios Fund SICAV - FBC Global Emerging Markets Portfolio Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

Poland (continued) Multimedia Polska

Russia Chelyabinsk Zinc Plant GDR Gazprorn ‘S’ ADR

Mohile Telesq.stems OJSC: ADR NovaTek CIAO GDR Unified Energy System GDK I’nified Energg System GI>R

I.IJK0II. AI)R

485,044

65,506 209,767

53,619 5 1,900 49,366 20,113 27,347

2,196,286 0.7 3 -~

4,904,170

884,331 8,873,144 4,62 I ,05# 2,904,324 2,895,316 2,754,068 3,044,475

1.64

0.30 2.07 1.55 0.97 0.97 0.92 1.02

~~ ~

25,977,616 8.70

Anglo Platinum 19,456 3,068,19(1 1.03

FirstRand I ,2 1 3, 185 4,112,208 i.?n

Jl) Group 124,997 1,533,721 0.51 Lereko Mobility Proprietary 1 6 0.00

South Africa

Bidvest Group 105,046 1,997,285 0.67

<;old Fields 240,797 4,462,583 1.49

MTN Group 430,774 5,846,537 1.96

2 1,020,53O 7.04 Taiwan (>ith;iy Financinl Holding I ,!)(i?,000 4,030,786 1.35 China Stccl 1,9l0,~00 2,182,13 1 0.73

Shin Kong Financial Holding 1,981,000 1,757,310 0.59 Siliconware Precision In~lustries 934,000 1,730,466 0.58

Wistron 1,069,000 1,607,409 0.54

Hon Hai Prccision Industry 714,353 4,739,179 1.59

‘Ihiwnn Scmicnriductor Manufacturing 3,484,000 7,181,55 1 2.40

Thailand Krung Thai Bank I T I - Siam Comrncrcial Bank

8,428,700 2,962.509 0.99 600,400 3,705,855 1.24

1,761,400 3,498,137 1.17

Turkey Arcelik 260,300 Haci Omer Sihanci Holding 725,586 KOC Holding 0 ‘I-AV IIivalimanlari Holding 199.770 ‘liirkiyc Garanti Hankasi 442,147

10,166,501 3.40

1,759,669 0.59 2,974,355 1 .00

1 0.00 1,652,179 0.55 1,987.356 O.hO

F&C Portfolios Fund SlCAV Interim Report & Accounts 2007

8,373,560 2.80

41

F&C Portfolios Fund SICAV - F&C Global Emerging Markets Portfolio Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares $ Assets

United States iShares MSCI Enieging Markets Index Fund R4,100 9,797,650 3.28

WARRANTS United Kingdom UDS London 31.08.2007 1.632 5.818.080 1.95

Tot;il Invcstmcnts Other Net Assets

289,090,959 96.79 3.21 9,595,744

'Ihial Nct hsscts 298,686,703 100 00

The accompanying notes form an intcgrdl part of thcse financial statcrncnts

42

F&C Portfolios Fund SICAV - F&C Global Emerging Markets Portfolio Distribution of Investments by Economic Sector

% of Net Assets Sector

Banking Sr Financial Services 23.40 Oil & Gas 13.59

8.49 Telecomniunications Electric, Electronic Eqiupnient and Engineering 6.83

Retail 3.52 Metals 6r Mining 3.25

Huilding tk Construction 6.83

Insurdncc 3.02 Semiconductors 2.98 Miscellaneous 2-50

Electric Utility 1.94 ‘liansporration 2.15

Cahlc lclevision 1.75 Ilivcrsificd Holdings 1.73 Cheniicals 1.60 Mlanubcturing 1.58 1.cisut-c tk Tourism 1.20 Auto ,Manufacturers 1.15 Electric 1.11 lnternct 1 .o()

Invcstrnent Companies 0.99

Metal I.‘:ibricatc/Hardwdre 0.94 Cosmetics / Persotial Care 0.75

Engineering d Construction 0.55 Cornputcrs 0 .54 Real Estate 0.38

Commcrical Services 1 .(J7

Apparel 0.97

Electrical Component Lk Equipment 0.59

Metals 0.30

‘Ihtal tnvcstmciits 96.79 Othcr Net Assets 3.21

Total Nct Asscts 100.00

F&C Portfolios Fund SICAV Interim Report 8. Accounts 2007

.. . .

43

F&C Portfolios Fund SICAV F&C European Corporate Bond

Performance During the kist quarter of 2006 and the first quarter of 2007 the European credit index total return was 0.70%,, outperforniing

govcmmcnt bonds by more than O.S%.The Fund (+O.69‘!6 net of fees) performed in Line with the benchmark (Lehtnan Brother

EUro-AgggrC~dtC Credit Index) which rose 0.70% Apart from Hrokcrage and Consumcr Financc companics most sectors in

Eun) crcdit had a positive performance contribution. Consumer Products. Pliarnia,Transportation and Communications were

thc bcst sectors.l’he Fund had a significant higher risk position relative to the [ndex. Perforrnancc was supportcd by good

stock selection writhin subordinated Bmking and corporates but thc ovcrweight in Brolicmgc and Finance companies

contributed neaatively.

During the reviewed period we held a neutral duration position, but increased to a long position by the end of March. In doing

that we sold a significant arnoiint of FRNs and terrninatcd our flattener position.’l’hc Fund is now morc concentrated in the

intermcdiatc part of the runre. The brgest overweights in the Fund are within subordinated Banking and Communications.

lhring thc revicwcd pcriod we reduced our large overweight in Financials in hvour o f corporates.We’ve increased our weight

in Communications in new issues and names were we see a turnaround:Telefonica,Vodafone,Viventli,AT&T, France I’CIPcom.

We’ve :idded to oiir positions in Rctic~p after the widening and Ckazprom. And we participated in new issues like Starkraft,

Kazkommcrtti, and (:asino. Hy rhc end of March thc Fund had approximately douhlc the “spread” cornpdrcd to the Index.

Market Review The credit market had 3 solid fourth quarter and started off very well in 2007. Increased risk appetite and an ongoing investor

search for yield did even the dodgiest crcdits perform.At the end o f February volatility picked up.This was due to three factors:

the weakening 1JS housing market, the unwinding of the Yen carry trade, and the speculation of a capital gains tax on the

Chinese stock exchangc.Thc uncertainty rose further due to the bankruptcy of several “suh-prime” mortgage lenders. By the

cnd of March the spill ovcr fcars subdued again and thc financial markets recoverr:d.‘rhe tcchnical situation on thc credit

market is increasingly strong due to the large demand for structured credit prnducts, some of which have a dampening effect

on credit spreads.

Outlook

I n March we slightly rcduced our Credit view from small positive to neutral, duc to thc uncertain macm cnvironment in the

US.The credit markets have to re-pricc the higher volatility and risk environment. On the other hand liquidity is still strnng,

wc (lo not foresee a vigorous rlowntiirn in Crerlits.The “c;irry”md”roll down”effect are still very important to thc contribution

of credit performancc and hard to heat. Tiicy justify the attractiveness of Invcstmcnt Gradc credit prnduct in general. The

technicals in the credit market continue to be strong, and we do not expect that to change any time soon. Structured credit

pmducts with relatively low risk and attractive spreads lcad to a continucd demand for credit papcr and dampcn tlic effect of

widening credit spreads.

We will continue to focus on stock selection, and are still comfortable with our overweight in subordinated Banking paper.

They have solid credit rdtings, offer a relatively high spread, and are mostly insensitive to the incrcased LBO risk that we

experience in some of the corporate sectors.

44

F&C Portfolios Fund SICAV F&C European Corporate Bond (continued)

Outlook (continued)

The risk sccnario for our credit views is a significant fall back in I 3 growth, whether it’s due to ;I .‘sub-prime” mortgage crisis spill over, or severely disappointing company profits.

Tjomme Dijkma

Portfolio Manager ADnl 2007

NotC. The inforniation contained in this report is historical and not indicative of future performince

Statenicnts contained in this report concerning future performance are the opinions of niaflagement and thew Cm be no guaranter that such opinions will provc to hc corrcct.

F&G Portfolios Fund SICAV Interim Report & Accounts 2007 45

FBC Portfolios Fund SICAV - F&C European Corporate Bond Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security DescriDtion Maturity Nominal Valuation % of Net

Rate Date CCY Value € Assets

BONDS Austria Wienerbcrgcr 3 . n m 25 April 201 2 EUR 60,000 58,013 0.10

Belgium .4rgenta Spaarbank 5.86% 31 December 2049 EUR 300.000 293,697 0.49 Fortis Hank 4.63% 31 December 2049 EL:R 400,000 391,911 0.66

685,608 1.15 Cayman Islands Biltavia Credit Card 5.88% 16 March 2009 DEM 190,000 99.698 0.17 MIJFG Capital Finance 2 4.85% 31 lkcemher 2041) ELjR 520,000 313,194 0.52 Norinchukin Fin;mce 4.25% 28 September 2016 EUR 500.000 494,570 0.83

Denmark Dong Energy Dong Energy

907.462 1.52

4.63% 21 June 2011 ECR 200,000 201,624 0.34 5.50% 29 June 3005 ELK 380,000 383,052 0.64

Finland Fortum 4.50% Forturn 4.63%,

France Assuranccs Gcncrales dc France luLA

Ax4 Banque Fetlerdtivt. 1111 Crcdit Mutucl Houygucs Casino Cruichard Permchon Casino Guicharci Pcrrdchon Credit Agricok France Telecom Prance Telecom Frmw ‘Iklecorn France ‘I’clecom G I E I’SA’Ircsorcric Lafarge Pernod-Ricarri Kcnault Societe Genenle Veolia Environnement Vivendi

4.65% 4.16% 5.7m 4.47% 4.50% 4.88% 6.00% 4.34% 4.75% 6.75% 7.25% 8.13%

6.00?4 4.75% 4.63‘% 4.38% 4.88% 4.38% 3. nnx,

20 June 2016 EUR 19 November 2010 61’R

3 I 1)cccmhcr 2049 51 Dcccmher LO49 31 December 2049 31 December 2049

24 May 201 5 10April 2014

27 February 2012 3 I I>ecemher 2049

21 February 2017 14 March 2008

28 January 20 I3 28 January 203.7

19 September 2035 23 March 2020

6 Ikcember 20 13 24 May 2013

18 December 2014 1 I December 2020 I5 Fcbruary 2012

ELR E[ -R ELR EL R E l It EIJR EUR Eun EI JR EUR ElJR EI:R EllR EVR EUR EL-R El -R EIJR EUR

165,000 3 13,000

490,000 200,000 390.000 150,000 200,000 700,000 302,000 829,000 580,000 358.000 439,000 153,000 246,000 83,000

250,000 40( ),OOO

180,000 185.000 591,000

584,676

475,415 168,701 403,581 144,280 199.492 693,596 317,429 690,626 576,716 366,129 4T.6 14 178.828 261,762 80,191

245,807 595,262 182,372 173,116 569,826

0.98

0.27 0.53

0.80

0. no 0.28 0.68 0.24 0.54 1.16 0.53 1.17 0.97 0.61 0.84 0.50 0 44 0.13 0.41 0.66 0 31

0.96 0.29

6,629,743 11.12

46

F8C Portfolios Fund SICAV - FBC European Corporate Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value 6 Assets ___ .. __ _ _

Germany Baver Baverische Hypo-und Vereinsbank Hcrtclsmann Commerzbank Deutsche Postbank Germany (Republic of)

(;ermany (Kcpuhlic of)

Germany (Republic of)

Ckrmany (Republic of)

Germany (Republic 04 H7'1 Funding Rheinmetall Vdkswagen Bank

6.00% 6.13% 1.58% 4.13% 5.951% 3.75% 4.501% 4.7% 5.25% 5.50% 6.35% 3.50% 3.88%

10April 2012 16 July 200Y

26 Septcmher 201 2 13 September 2016 28 December 201 1

4 July 2013 4 January 2013

4 July 2034 4 July 2010

4 January 2031 3 1 1)eccmher 2049

2 1 June 20 I0 3 Decembcr 20 I4

EUR NIL; EUR EUR El JR EUR EUR EIJR EUR EUR EUR CUR E l l R

174,000 c)oo,ooo 574,000 400,000 180.000 450,000 375,000 170,000 700,000 476,000 nx5,ooo 165.000 481.000

185,421 425,390 570,264 394,246 190,177 442,817 383,645 183,508 725,295 561,116 933,680 160,310 474.208

0.31 0.71 0.96 0.66 0.32 0.74 0.64 0 31 1 2 2 0 94 1.57 0.27 0.80

5,630,086 9.45

Credit Suisse Group Finance Guernsey 3.63's 23 January 2018 EUR 410,000 391,878 0.66 Guernsey

Ireland GE Capital European Funding 4.63% 22 February 2027 EUR 700,000 69 2,206 1.16 Porsche International Finance 3.88% 1 February 2016 BUR 560,000 527,604 0 UY

Italy AC M Autostrade c 1.B Gruppo Editoriale L'Espresso Lottomatica 'I'elccom ltalia

Telecom Italia

1,219,810

4 88X 23 July 2014 EUR 220,000 223,677 5 88% $J Junc LO24 EIJR 300,000 553,594 5 75% 16 Decctnher 2024 EITR 125,000 117,891 5 13% 27 October 2014 EUR 265,000 262,522 8 25% 31 hlarch 2066 EUR 250,000 274,358 5 25% 17 March 2055 EllR 700,000 596,647 5 38%, 29 January 2019 EIJR 600,000 597,420

2.05

0.38 0.56 0.20 0.44 0.46 I .oo 1 .oo

2,405,909 4.04 Japan Resona Bank 3.75% 15April 2015 EUR 505,000 495,458 0.83

Jersey EFG Hellas Funding 4.57% 31 December 2049 EI!R 210,000 198,551 0.33 Fortis Capital 6.25% 31 December 2049 EUH 187,000 193.647 0.33 Kommunnlkredit Capital I 4.W% 31 December 2049 EUR 45,000 37,069 0.06 RESPARCS Funding II 7.50%) 31 1)ccernht.r 2049 EUR 750,000 790,800 1.33

1,220,067 2.05 Luxembourg hrcclor Financc 4.63x 7 November 2014 EIlR 774,000 272,001 0.46 CIK International 5.25% 10 March 2009 EI:R 308,000 311.507 0.52 Danaher European Finance 4.50% 22 July 2013 EUR 240,000 238,577 0.40

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 47

F&C Portfolios Fund SlCAV - F&C European Corporate Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv Descriotion Maturity Nominal Valuation % of Net

Rate Date CCY Value € Assets

Luxembourg (continued) Gaz Capital (Gazprom) Gaz Capital (Gazprom)

Holcim Finance RS Finance SBS SES Teleconi Italia Finance Tyco International Group VTB Capital

Gal: <.>dpitdl ((;Upr(KIl)

4.56% 5.03% 5.44% 4.38% 6.83% 4.00% 4.38%) 6.88%) 6.13% 4.25%

9 December 2012 ECR 25 February 2014 ECR 2 Novcmhcr 2017 E l X

23 Junc 2010 ELI1 16 September 2009 EUR

EUR 21 Octohcr 2013 EI:R 24 January 2013 EI:R

4 April 2007 EUR 15 February 2016 EUR

15 March 20 1 1

155,000 430,000 Z50,OOO

299,000 260,000 449,000 337,000

389,000 339,000 110,000

151,701 426,345 249,687 298,827

259,951 440.768 33 1.480 427,348 339,013 107,757

0 25 0 71 0.42 0.50 0.44 0.74 0.56 0 72 0.57 0.18

Mexico IJnited Mcxican States

Iinited Mexican States

3,854,962 6.47

5.38% 10 Junc 2013 ElJ l l 85,000 89.038 (J.15 5.50%, 17 Fehruary 2020 EIJR 173,000 183,518 0.31

Netherlands ABN Amro Bank ADN Amro Bank Aegon H,MW Finance Ilcutsche Tclekom International Finance Deutsche Telekom Intcrnatioiial Finance E. ON 1nrermtlon;il Financc F M > S Finance EDP Finance ELM DV for Swiss Reinsumncc Enbw 1nternation:il Finance European ,Moi-tgagc Securities F Van 1.anschot Hankicrs Genenli Finance I NG Wan k International Endcsa KaLkomrncrts lntenatioiial KDC 1ntem:ition:il Finince Koninklij ke KI'N NIB Capital Bank SaintGobdn Nederland 'rclefonica P,urope 'I'urmAlcm Financc Wolters Kluwer

5.25% 6.00% 7.694

4.50% 8.13% 5.75% 4.63%

4.13%* 5.251% 4.25%

4.86% 5.32% 5.38% 5.38% 6.88% 6.25% 4.5096 2.85% 5.00% 5.88% 6.25% 6.25%

5.00%

5.n8x

30 June 2008 17 March 2009

3 1 Ileccmbcr 2049 6August 2018

25 October 2013 29 hllay 2012 29 May 2009

3 March 20 10

29 Junc 2020 31 December 2049 I9 October 2016

l? Scptcmhcr 2007 3 1 December 2049 3 I Ilcccmber 2049

10 March 2008 21 February 2013 13 February 2017

31 Ilcccmbcr 2049 21 July 201 1

2 I February 2040 16April2010

I4 February 2033 27 Scptcmbcr 201 1

11 June 2007

LlEM 200,000 NLti 420.000 N1.G 560,000 EIJR 178,000 EIJR 456,000 ECR 388,000 ECR 629,000 E l I< 99,000 ELK 35 1.000 EUR 150.000 EUR 300,000 N1.G 1,000,000

E L K 350,000 EI:R 250,000

NIX; 80,000 ELR 363,000 ECR 500,000 N1.G 210,000 kI;K IU6,000 EI:R 160,000 EI'R 153,000 ECR 533,000 E L X 450,000 NI.G 9o.nno

772,556

103.37~ 196,35H 263,602 184,827

451,347

647,160 w , i n 9

99,hH4 328,446

149,347 292,8 I8 456,868 241,300 350,212

36,654 379,638

95366 1843 1 0

103,800 155,553 559,843 44 5,500

489,250

40,981

0.46

0 17 0.33 0.44 0.31 0.76 0.75 I .09 0 17 0.55 0.25 0.49 0 77 0.40 0 50 0.06 0.64 0.82 0.16 0.31

0 17 0.26 0.94 0.75 0 07

Norway Statkraft

6.707,43 I 11.25

4.63%, 22 September 2017 EIJR 270,000 267,503 0.45

48

F&C Portfolios Fund SICAV - F&C European Corporate Bond Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rate Date CCY Value € Assets

Romania Banca Conierciala Romana 3 75% 5 IXccmher LOOR ELR 350,000 345,529 0.58

South Africa South Africa (Republic of) 7 00% 10April 2008 EIiR 38.000 80,036 0.13

Spain Hancaja Emisioncs Popular Capital Telefonica Emisiones

4.63% 5 I Ikccmbcr 2049 EI!R 292,000 284,273 0.48 4.41% 31 Deccmbcr 2049 EUR 101,000 88,249 0.15 3.75% 2 February 2011 EUR 592,000 576,107 0.96

Supranational N S P

wn,62<> 1.59

6.51% 15 October 2013 ELR 261,000 265,894 0.45

Sweden Nordra Bank 4.22% 31 Ikcemher 7049 ELX 230,000 194,409 0 33 Skandinaviska Enskilda Banken 4.13% 28 May 2015 l X R 274,000 27 1,844 0 45 \5ttenfaIl Treasury 5 . 3 ~ ~ ) 29April 2024 E I X 252,000 268,6613 0.45

United Kingdom AIH IX 1 hnglian Water Services Financing Anglo Irish Capital IJK BAA Harclays Hank Barclays Hank BAT 1nternation;il Finance Carnival FCE Hank FCE Bank C;allaher Group HSHC Holdings Lloyds Bank LloydsTSB Bank National Grid Wtional Grid National (;rid Electricity Transmission Old Mutual SL Vodafone Group W I T Group WPP Group

4.78% 4.63% 4.53%

4.75% 4.88%, j . l y4 4.2% 4.91X

3 . w %

7.13% 4.63% 4.20% 5.63% 5.63% 4.13% 4.j8X 4.13% 5.00% 5.3136 4.7 5% 4.38% 6.00%

31 Deccmbcr 2049 EI'R 7 October 2013 EI!R

31 December 2049 EUR 15 Febmaq 2012 ECR

31 1)eccmhct 2049 E L X 31 Decemher 2040 ELK

9 July 2013 ECR 27 November 201 3 kI R 30 Scptcmbcr 2009 EI:N

16 January 2012 EIJR IOJimc 2011 EUR

22 hcptemher 2014 tllR 17 November 2024 EIJR 31 December 2049 EUR

1 0 March 2020 EIN 18 September 2008 EllR 31 December 2049 EKR 3 1 December 2041) ELI<

14 Junc 2016 EL'R 5 Ileccmher 201 3 EI-R

18 June 2008 ELR

2 I ;MdKh 20 13 EUR

680,OOO 167,000 3 10,000

1,120,000 2.5 10.000

329,000 400,000

600,000

190,000

744,000 604,000 304,000 1 14,000 327,000 236,000 520,000 592,000 461,000 139,000

325,000

247,000

115,000

734,916

(143.207 168,556 259,704 3 16,285 979,03 1

2,418.61 1

336,990 393,572 24 1.937 601,212 116,251 190,757 774,426 6 19,968 296,721 107,883 326.403 228,400 515,958 59 1.00K 455,285 141,56H

1.23

1 OH 0.28 0 44 0 53 1.64 4.06 0.56 0.66 0.41 1 0 1 0.19 0.32 1.30 1.04

0.50 0.18 0.55 0.38

0.99 0.76 0.24

0 3 7

United States AT&T

10,723,733 17.99

4.38% 15 ;March 2013 EUR 600,000 594,515 1 .oo

F&C Portfolios Fund SICAV Interim Report tl Accounts 2007 49

F&C Portfolios Fund SICAV - F&C European Corporate Bond Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value € Assets

United States (continued) Rank of America Cargill (%group Citigroup DainilerChrysler NA Holding DaimlerChrysler NA IIolding 1)aimlcrChryslcr NA Holding Deutsche Postbank Funding Trust I11 Dow Chemical Golthdn Sdchs GroUp Goldman Sachs Group Goldman Sachs Group Goldman Sachs Group Goldman Sachs Group HSHC: Finance Intcrmtional Uusincss Nwhines JPMorgan Chase Jl’Morgdn Chase Lehmati Brothers Holdings Lehinan Brothers Holdings Lehmdn Brothers Holdings Mcrrill Lynch Merrill Lynch Morgan Stanley Pcmrx Project Funding MAster’rrList Polo Ralph 1:aurcn Procter 8; Garnble Residential Capital Zurich Finance USA

4.00% 4.38% 3.63% 3.95%) 4.13% 4.38% 4.3Kx 7.00% 4.63% 3.75% 4.00% 4.09% 4.23% 4.75x 6.501% 4.00%

4.15% 4.00% 4.25% 4.75% 3.98% 4.25% 3.38% 5.50% 4.50% 3. jsw 5.13% 4.50%

3 . m x

28 March 2018 29 April 2013

30 November 2017 10 October 2013

18 November 2009 16 March 2010 21 March 2013

31 December 2049 27 May 201 1

4 Februaq 2013 2 February 2015 4 February 2013 4 October 2012 2HJanudry 2014

5 May 2009 1 November 201 1

31 March 2018 12 Ocrohcr 20 I 5

4 May 201 1

26 September 2016

H February LO10 22 March 201 1

20 July 2012 24 February 2025

4 Octobcr 2013 7 December 2012

16 JdnUdr)’ 2014

17 ‘May 2012 17 September 2014

ELR ECR ECR ELK EUR EVR EI:R EIJR ECR ECR E1.H EKR EKR ELR El ,*R EI:R ECR E I : R ELR ECR EL-R EI:R

ELR EVR EUR ELI<

ELR EUR ECR

400,000 350,000 410,000 050,000 300,000 400.000 2 50,000 748,000 459,000 707,000 466,000 409,000 384,000 5 19,000

398,000 450,000 500,000 joo,ooo 480,000

1,000,000 5 14,000 287,000 188,000

86,000 430,000

250,000 386,000 8 10,000 650,000

370,220 346,798 392,498 63 1,973 297,420 398.476 245.988 3 10.378 460.540 678,383 446,698 408,857 385,098 522,488 414,730 443,764 482,245 500,465 470,729 980,310 5 15,718 287,259 188,836 406,978 84,818

247,165 367,970 785,468 650.030

0.65 0.58 0 66 1.06 0.50 0.67 0.41 0 52 0.77 1.14 0.75 0.69 0.65 0.88 0.70 0.74 0 81 0.50 0.7’9 1.64 0.87 0.48 0.32 0.68 0.14 0.41 0.62 1.32 1 .0$l

Total Investments Other Net Assets

‘Ihtdl NCt Assets

13,l 56,815 22.04

j8,046,550 97.39 1,553,549 2.61

57,600,099 100.00

The accompanying notes forin an intcgral part of thcsc financial statcmcnts.

50

F&C Portfolios Fund SICAV - F&C European Corporate Bond Distribution of Investments by Economic Sector

Sector % of Net

Assets

Bmking 8; Financial Scrviccs 48.79

Insurance 5.34 Sovereign 4.44 Auto S1:mufacturcrs 3.57 Electric Utility 3.47 Oil 81 Gas 2.51 Entertainment 2.16 Media 1.66 Electric 1.49 Publishing 1.48

‘I’clecommunicitions 1 1 -73

Building Sr Construction 1.10 (:hcrnicak 1-08

Advertising 1 .00 I\.liscellaneous Manufxturing 0.84 Computers 0.74 l’ravcl 0.66

Agriculture 0.58 ‘lransportation 0.56 Metals & Mining 0.46

Investment Cornpanics 1 .(I8

Food. Devenge & Cnnsumer Goods 0.62

Electrical Component S; Equipment 0.45 Apparel 0.41 Rcvrnges 0.41 Witer 0.29 Finance Sr Financial Services 0.25 lohacco 0.20

Total Investments 97.39 Other Net Assets 2.61

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 51

F&C Portfolios Fund SICAV F&C BioPharma

Performance

For the six months to 3 1st March 2007, the portfolio was down 5.44% (net of fees), compared with a fall in the benchmark (if

1.77% (10%) MSCI Hiotcchnology, 15% MSCI Healthcare Equipmcnt Sr Supplies, 15'% MSCI Hcalthcare Providers and Services,

60%~ MSCI Pharmaceuticals) which was caused by a number of factors. Poor pcrformincc from biotechnology assets was the

main prohleni area. Colcy Pharmaceuticals suffcrcd an upsct in one of their clinical trials.Arena Pharmaceuticals was wcak tluc

to a lack of newsflow and a follow-on offering. Gilead, one of our favourite holdings was weak after they annowiced the acquisition of Myogen, a rival biotech compny On the positive side, Zimmer was strong on better than expected pricing

developments in orthopedics, Medco were strong on continued M&A speculation after the CVS Caremark transaction and

Alcon rose on good quarterly sales data and market share giins.

Market Review

Thc pharmaccutical scctor continucd a strong recovcry with Mcrck raising guidance on highcr sales and hetter margins.l'he

big news story over the period was thc acquisition of Carcrnatk, the IJS Pharmacy Benefits Manager VBM) hy CVS, the drug

chain.The market did not see the benefits of CVS buying a PRM, the main problem being that LTS make money in their

pharmacy by prescrihing hranded drugs, whereas PBMs make the most money when generic drugs are prescribed. Other

:icquisitions included Ahbott buying Kos Pharmaceuticals to bolster their cardiovascular franchise, Abbott also announced an agrccment to divest thcir core laboratory diagnostics business to G E for $8.1 3 billion in a s h , and Gilead buying Myogcn to

add another therdpeutic category to their focus. Both Amgen andJohnson and Johnson were weak as the market worried about

competitive products and slowing growth as well as problems surrounding the dosing of their EPO anemb drug franchise.

Iko scpamtc studies, CHOIR and CREATE, were puhlished in the Ncw England Journal of Mcdicine. questioning the risks of

aggressive anemia treatment through high dosages of epoetii'l. Pfizer dropped one of their lntc stage drugs for schizophrenia

which was another blow to their pipclinc but announced they were to cut their salesforce by 20% gcnerdting significant cost

savings.

Outlook

We continue our bullish ground-up view on the worldwide healthcare sector based on demogrdphics, innovation, bilrriers to cnrry and unmct nccd. We arc looking to increase our exposure to [IS pharmaccuticals as we believe that there out-

performance will he sustainable

Niall Kirk

Portfolio Manager April 2007

Notc. The information containcd in this rcport is historical and not indicativc o f future performance.

Sratenients contained in this report concerning future performance are the opinions of management and there can be no

guarantcc that such opinions will prove to bc corrcct.

52

F&C Portfolios Fund SICAV - F&C BioPharma Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of

Shares Valuation % of Net

E Assets

SHARES France Sano fi-Avenr is 4,205 273,741 2.70

Japan lhkeda Pharmaceutical 4,000 194,325 1.92

Switzerland Alcon 4,780 47 1,667 4.M1 Novartis 9,200 395,116 3.90 Roche Holding 4,190 555,081 5.49

1.42 1,864 14.05 United Kingdom AstnZeneca 6,260 252,219 2.49 GlaxoSniithKline 31,300 644,386 6 37

United States Ahhot t Laboratories Amgcn Arena Pharmaceuticals Hosron Scientific Cardinal Health Coley Dharmaccutical Group Eli Lilly Gcncntcch Gilead Sciences Henry Schcin Inqte Johnson Sr Johnson Mcdco Health Solutions Medtronic Mcrck

Neurogen F’anacos Pharmaceuticals Pfi %c r Salix Pharmaceuticals St. Jude Medical Stereotaxis Thcrmo Fisher Scientific LnitcdHealth Group WellPoint W’yeth Zimtner Holdings

896,605

8,390 350,447 5.430 227,134

19,320 157.059 5,172 56,292 5,000 273,037

27,000 193,622 3,600 144,739 1,510 ‘22,822 5,550 203,290 5,470 225,941

30,000 147.990 14,340 64(i,S51 5,060 274.723 4,900 179,949 5,000 165,319

72,070 350,666 28.000 97,043 39.470 746.325 20,010 188,731 6,040 170,046

25,000 222,696 5,540 193,873 6,550 250,992 2,000 121,416 7,340 274,886 7.430 475,033

6,430,920

8.86

3.46 2.24 1.55 0.56 2.70 1.91 1 .ql

0.72 2.01 2.23 1.46 6.39 2.71 1.78 1.63 3.47 0.96 7.37 1.87 1.68 2.20 1.92 2.48 1.20 2.72 4.69

63.54

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 53

F8C Portfolios Fund SICAV - F&C BioPharma Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

% of Net f Assets

Valuation

9,217,460 01.07 90.3,6-3-3 8.9.3

The accompanying notes forrii an intcgml part of thcsc financial statcmcnts.

54

FBC Portfolios Fund SICAV - F8C BioPharma Distribution of Investments by Economic Sector

% of Net Sector Assets

Medical ~ Drugs 44.82 Medical - Products 21 -76 Medical - Biomedical/(;cnctics 9.05 Medical - Services 6.39 Mcdical - Itistrumcnts 6-55 Medical -Wholesale Drug I)istrihution 2.70

Totdl Investments 91.07 Other Nct Assets 8.93

Total Net hssets 100.00

F&C Portfolios Fund SICAV Interim Report 8 Accounts 2007 55

F&C Portfolios Fund SICAV F&C Global Real Estate Securities

Performance Over the six month period to 31st March 2007, the net asset value of the portfolio rose on a tot:rl return basis of 11.94% (net

of fees) in Euro terms.This compares to an increase of 11.6 5.X in the benchmark, the CiPR250 Property Shares Index World ex

Asia and Africa, over the same period.

During the period, all three regions showed strong results. Europe was up +18.71, the Pacific showed a positive return of +14.9% and thc Amcricas wturncd +7.11%.

The performance was above the benchmark. Regional allocation was positive, due to being overweight outperforming Europc

and underwrcight underperforming hnlcricds. Country allocation was also positive. we were ovcnveight in OUtpCrfOrming

France and Finland and underweight in underperforming Canada. Stock selection had the strongest attribution: the UK and

France had a positive impact.

Market Review

The indirect real estate market had again a stronfi six month period after the strong third quarter

Europe (owweight) showed a positive pcrformancc: +18.7X. Most countries showed doubledigit positivc returns, led by

Poland (+76.7%), Finland (+62.7%) and Italy (+39.9%). Spain (-1.3%) and Greecc c4.lU) were the only countries with negative

returns. We remain overweight, especially France anti the CK.'l'hc main news was on Real Estate Investment 'l'rirsts (RElTsj across Europe; IJK: as of 1st January 2007, eight UK companies converted to REIT status and at least four companies arc expected to convert. Finbnd: a committee of the Finnish parliament issued a positive statement regarding the introduction of

Finland Kcal Estate lnvcstmcnt Trusts (Finn-HEl'l's), hut this will br on thc (ncw) govcmmcnt-s agenda after the elections in

mid-March 2007. Germany: the Bundastag arid Bundesrat agreed to the introduction of German Real Estate lnvcstment Trusts

(G-REITS) from 1st January 2007, although residential assets are excludcd. Italy: the Italian govcrnmcnt approved REI'I' legislation. to apply as from 30rh June 2007.

lhc rnarkct in thc Pacific (ovcnvcight) was also posilivc: +14.9%,.A~rstralia was in line with this: +14.H%.'I'he Japanese Redl

Estate Investment Trusts U-REITs) in Japan showed strong double digit returns: between +28.h% and +56.6%. In Australia. the

reporting season showed solid retail anti improving offcc fundamentals with I k r t h and Hrisbane already strong and New

South Wales residential market is not expectcd to recowr until '08 hut Perth and Queensland remain strong. Merger and

Acquisition (MkA): Centro announccd it would acquire New Plan Excel (US) for CSD 33.15 per share in cash. In Japan the

vacancy rate in the five main wards ofTokyo was 2.9396, and avenge asking rents continued to rise, up 10.5%) year on year.

Official land priccs wcrc announced by the Ministry of Land, Infrastructure ;md Transport in Japan and showed that the

nationwidc average price of residential and commercial land turned up for thc first tinic in 16 years.Thcrc was a widc recovcry

in land prices, fmni loh-o , Osaka and Nagoya to key regional cities.

56

FBC Portfolios Fund SICAV F&C Global Real Estate Securities (continued)

Market Review (continued)

In the Americas the market was up +7.8%, the US was up too +B.(J%.The valuation of the sector remains expensive. REITs are

still expensive especially rel-ative to (corporate) bonds and stocks (price/earnings (P/E) multiples). Relative to direct real estate,

valuation stayed inexpensive, although this moved back and forth. M&A continued: EOPs shareholders voted to approve the

mcrgcr with Hlackstonc (thcy offcred $55.50 per sharc in cash (nearly IJSI) 40 billion), the biggest private-equity dcal in

history. This was announced after \’NO terminated its proposal to acquire EOl? Mills will begin talks with Simon Property

Group and FarJllOli GlpitJl Management to consider their GSD 1.56 billion bid for them (USD 24 per sharc). outbidding the

IJSD 21 per share bid by Brookfield Asset Management. Sunrise REIT (Canada) received a topping bid from Health Care

Proprrtics, 20% abovc thc V’I’H bid and Spirit Finance Corp agreed to be acquired by ;Ciaccluarie Bank (Austdin) and Kaupthing

Hank (Icclantl) for 1:SI) 14.50 per sharc in cash (around LJSt) 3.5 billion). Next to that, S&P announccd that AvalonHay, Host

and DDH ate heing added to the S&P 500, resulting in thirteen REITs in this index. Douglas Emmett (owner/operator of offices and apartments i n 1.A and Honolulu) wcnt public and KEl’l’s continucd to be wry active on thc convcrtiblc market (ycar to

date IJSD 8.1 billion). Risks arc still on the macro economic side, likc slowing economic growth (and its inipact on job growth

and tellant demand) and the level of interest Ntes and changing investor demand due to the strong valuations.

Outlook

Wc kcpt our positivc stance for global real csfatc sccuritics now that thc F&C economic scenarios with, as o f fdl 2007,

recovering gross domestic product (GDP) growth seem still more supportive although the current move of interest rates is

closely’ monitored as well as the concerns over the sub prime lending industr!’ and its impact on real estate securities :mi consumer con~dencc/spending. We expect to cliange our view when this scenario changcs to strong growth or reccssion.

IJnder the current scenario, downside risk is changing investor demand (capital outflow) related to the high nluitions, a change in tlic currcnt macro cnvironmcnt of modest C i I W growth and low intcrcst rates, highcr yiclding altcrnativcs and rcdl

estate debt costs going up and its impact on real estate prices/cap mes.

The long term investment case remains; high risk adjusted returns compared to bond and equities, diversification of portfolio

outside bonds/equities with low correlations, good way to get rt.Al estate exposure and an asset class which grows to maturity

and is undergoing a sccular change.

Dirk Molenaar

Portfolio Manager April 2007

Note, ‘I’hc information containcd in this rcport is historical and not indicative of futurc performance

Statements contained in this report concerning hiture performance are the opinions of management and there can be no guanntee that such opinions will prove to he corrcct

F&C Portfolios Fund SlCAV Interim Report & Accounts 2007 57

FBC Portfolios Fund SICAV - FBC Global Real Estate Securities Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares E Assets . . . . .. . . . ________._. __ ___- -

SHARES Australia Centro Properties Group 279,000 1,439,494 1.24 CFS Retail Property '['rust 734,000 991,422 0.85

Commonwealth Property Office Fund 5.3 1,000 444,229 0.38 GIJT Group 655,000 1,944.782 1.68 Macquarie Goodrrian Group ri02.000 2,527.291 2.18 ,Mirvac ~0h,000 973,717 0.84 Stockland 28,500 139,415 0.12 Stockland 477,000 2,350,786 2.02 Wrstfield Group 403,000 5,063,313 4.36

15,874,449 13.67 Austria Meinl Europcan I.atid 15,816 32Y289 0.28

Belgium Wirehouses De Ihnw 9,775 527,850 0.45

Canada Brookfield Properties Canadian Real Estate Investment 'I'nist

88.900 n.200

2,709.780 2.34 165,034 0.14

Finland Citycon Sponda

87,400 57,760

2,874,814 2.48

5 12,164 0 44 747,992 0 64

France Icadc Nrxity SILIC Socii.ti. de la Tour Iiiffel Lnihail

1,260, I56 1 .on

20,342 1,118,810 0.96 12,000 76 5,600 0.66 8,756 1,179,433 1.02 8,278 1,157,761 1 .oo

18,861 4,279,184 3.68

Germany WG Iinniobilien Pittrizia Iminobilirn Viwcon

22,975 35,846 6,230

8,500,788 7.32

823,654 0.7 I 599,704 0 52 168,833 0.14

Italy Beni Stabili Imniohiliare Grande lhstribuzionc

561,000 141,381

1392,191 1.37

701,251) 0.60 587.791 0.51

1,289,041 1.11

FBC Portfolios Fund SlCAV - F&C Global Real Estate Securities Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares E Assets

Japan Japan Real Estate Investment Japan Retail Fund Investment Nippon Huilding Fund Orix JREIT

17 168,636 0.15 46 339,306 0.29 18 222,050 0 19 59 272,793 0.25

Luxembourg GAGFAH ProLogis European Properties

1,002,785 0.86

14,484 292,577 0.25 35,400 550,470 0.48

Netherlands Eiin)commcrcial Properties Rodamco Europe

843,047 0.73

2 1,028 925,442 0.80 8,893 325,317 0.79

1,850,759 1.59 Spain

Kcnta Corpo~icion Rcal Estatc 19,100 690,083 0.59

Sweden

CdStdlLKIl 95,600 1,035,603 0.83 Klovcrn 118,500 415,605 0.36

1,451,208 1.25

Atlas Estates W/I 62,100 306,350 0.26 British Land 92,737 2,088,248 1 .80

Ikrwent London 60.385 1,931,944 1.66

United Kingdom

Capital S: Regional 52,840 1,199,193 1.03

Grcat Portland Estates 291,158 3,329,631 2.87 IIammerson 133,577 5,611,425 2.94 Land Seciiritics Group 157,057 4,953,095 4.27 Shafltcshury 77,000 861,835 0.74

United States Alexandria Rcal Estate Equities AMH Property Archstone-Smith Trust AwlonHay Cornrnunitirs Hoston I'ropcrties H I W Properties 'A'

Camden Property Trust CBl. & Associates Properties Cousins Propertics 1)cvclopcrs Diversified Realty Douglas Emmett

F&C Portfolios Fund SICAV Interim Report & Accounts 2007

16,200 44,600 78,600 36,700 44,900 37,000 25.000 19.')00 4 2 . 3 u ) 32,200 66,400

18,081,721

1,217.152 1,962,747 3,193,658 3,571,375 5,945,849 1,749,046 1.31 '1,780

667,951 1,040,481 1,516,116 1,268,951

15.57

1.05 1 .69 2.75 3.07 5.40 1.51 1.1.7 0.57

0.90 1-30 1.09

59

.. . . . - . .

F&C Portfolios Fund SICAV - F&C Global Real Estate Securities Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % C

Shares Net

f Assets

United States (continued) EastGroup Properties Equity Kesitlential Federal I<calry Investmenl 'I'rust General Growth Properties Homc Properties Host Hotcls & Resorts Kilroy Realty Kimco Rcalty p mace rich

Maguirc Properties t'cnnsylvania Real Estate Investmcnt Triist Prologis Public Stomgc Regency Centers Simon Propcrty Group SL Green Realty Vomado Realty Trust

27,300 25,800 23,600 32,100 20,500 46.700 3 1.300 87,400 29,700 26,300 20,900

100,200 19,169 34,soo

33,017 4 3,400

69,000

1,042,832 931,457

1,600,892 1,55 1,546

810,394 919.737

1,727,955 3,188,769 2,053,366

700,073 693,538

4,870,115 1358,432 2,176,405 5,746,126 3,390,427 3,877,054

0.90 0.80 138 1.34 0.70 0.79 1.49 2 74 1.77 0.60 0.60 4.19 1.17 1.87 4.95 2.92 3 34

'I'otal Invcstincnts Othcr Net Assets

Total Net Assets

58,088,274 50.01

114,256,455 98.36 1,901,548 1.64

116,158,003 100.00

'Ihc accompanying notes form an integral part of thcso financial statcmcnts

60

F8C Portfolios Fund SICAV - F8C Global Real Estate Securities Distribution of Investments by Economic Sector

% of Net Sector Assets

Red Estate 98-36

'Ibtal Invcsimcrits Other Net Assets

98.36 I .64

Total Net Assets 100.00

F&C Portfolios Fund SICAV irterim ReDort 8. Accounts 2007 61

F&C Portfolios Fund SICAV F&C Global Convertible Bond

Performance Ovcr the six months to 31st March 2007 thc Portfolio rosc by 4.46% (net o f fees) coinparcd to a rise in thc benchmark, 1JHS

Customised Global Focus Index, of 6.68%.'rhe return for the six months totalled 1.6% for convertiblcs, relative to 2.6%) for

equities and 0.27% for bonds on a like for like basis.The IJS dollar depreciation depressed returns by around 60 basis points.

Industrials were thc most important driver for returns, with merger-related speculation driving gains in mtomotivc stocks such

as Daimler,Mileo and Michelin. Siemens was mother strong contributor to pcrforniance. Cyclical services (CSX, CapGemini,

Accor, Publicis) also did well, while the portfolio benefited further from thc merger negotiations by ABN Amro. Results by

pharmaceutical companies Amgcn, Kochc and Novartis wu-c rcccivcd ncgativcly hy the markct and the energy sector wcighcd further o n pcrfixniancc.

Relltive to the UBS Global Focus Customised Index the portfolio return 1agged.This was miinly duc to the strong performance

by some index heavyweights, such as the Bayer mandatory (6.6% of the Indcx, 45 hasis points negative attribution) and

IYaimlcrChryslcr mantktory (2% of the Index, 30 basis negative attribution)

Due to the high concentration of the Index (xvith the top 20 now accounting for 45% of the Index) and the very volatile

composition (with a 35% churn in the first quarter). we do not believe it is desirable to position the portfolio relative to the

benchmark.Just to go neutcil, FkC mould have to buy about j'% of cemain issucs.'l'he F&C Convertibles team therefore sticks

to its total return investment philosophy.

In February, FB;C won the Lipper Germany award for best global convertible bond over the past three years, winning against a peer group of 22 competing convertible bond funds.

Market Review Convertible bonds made a strong start to 2007. During the first quarter, the total return on convertibles was almost equal to

that of equities and suhstantially ahovc the return on bonds. Initially, strong fourth quartcr company rcports drove convertihlcs

to new highs. However, uncertainties in relation to the Chinese equity markct as well as the sub-prime mortgage market in the

US temporarily put pressure on equities in the latter part of the quartetAfter il rise in stock markets from their June 2006 lows of around 20%, the convertible market was also vulnerable to set backs. However, rising volatility helped to mitigate the decline

in convertibles. In addition, the tight supply sitliarion in Europe supported vdluations of convertibles. Due to rising stock

markets, many convcrtiblcs arc trading dccp in the moncy and demand for thc so-called halanccd segment rcmains strong.

Ikspitc somc interesting ncw issucs, lagc redemptions of convcrtibles limited nct supply. However, new issuc activity in the 1;s andAsia remains good.'l'he large number of new issues in Real Estate has been particularly notable.

Strategy Portfolio strategy remained focus on reducing exposure in high delta convertiblcs. Although valuations of the underlying

securities was gcncrally supportive, the downsidc risk of the convertible hond portfolio relative to the bond floor had been

rising. Holdings in Accor, St Crobain, Siemens, Kcrry Properties and Vinci w-crc rcduced. In the US, cash was reinvcstcd in

Floating Kate Convertibles that offered an attractive currcnt yield, low conversion premiums and were trading close to redemption v;~lue. In addition, an overweight position was built in Asia of approximately Z.S%.This was executed by adding a number o f high-quality bonds with very strong growth prospects. In China, two food producers were pUKhASCd - Chaoda

Modern, the largest Chinese fruit &vegetable grower and China Milk. Both are anticipated to benefit from governnicnt policies to stirnulatc food production.0ur strdtcgy in China is to focus on companies that benefit from rising consumption, rather than

being reliant on cxports. Wc added to our holdings i n the 'Telecom sector by purchasing Telekom Malaysia and Reliance

Communications (lndia). After the drop in the prices of European Financials we expanded positions in Deutsche Bank, Eurobank of Greece,Axa and Allianz.

62

FBC Portfolios Fund SICAV F&C Global Convertible Bond (continued)

Outlook ‘The strong dcclinc in equitics markets in thc lattcr part of the first quarter is considcrcd unwarranted on hndamcntals.

Although we expect a modest slowdown in growth in the second and third quarters, wc scc balanced growth for thc full year of about 2% in the I:S, Europe and Jap;m.The valuation of equities is still attixctive, also vis-kis bond yields. However, the

uncertainty of I I S sub-prime mortgages and the weakening housing market in the US will keep volatility high over coming

months. Convertibles are vulnerdhle to falling equities markets, but rising volatility supports the option part of convertibles and offcrs sornc protection.

Strategy will ;11so focus on reducing positions of convertibles that have benefited from the strong appreciation of the

undcrlying securities in the past few years. particdarly in Europe.Attractive investment opportunities in the balanced segment

are available especially in Asia, where higher yields and growth offer an attractive total return.The portfolio is currently ahnut

2.5‘% overweight in Ash at the cxpcnse of Europe.

Anja Eijking Portfolio Manager April 2007

Norc: The information contained in this rcport is historical and not indicative nf future pcrformmcc.

Statements contained in this report concerniiig futirrc perforinance are the opinions of n~an~gement and thcrc can be no

guarantcc that ruch opinions will provc to hc corrcct.

F8C Porttolios Fund SlGAV Interim Report & Accounts 2007 63

FBC Portfolios Fund SlCAV - F&C Global Convertible Bond Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv DescriDtion Maturity Nominal Valuation % of Net

Rate Date CCY Value € Assets

CONVERTIBLE BONDS Belgium Ilelhaix Group Sagcrpar

2.75% 30 April 2009 ECR 250,000 3 10,900 0.24 2.95% 27 April 2012 ELR 1,700,000 1,963,823 1.55

Bermuda Shui on Construction

1.77 2.274,723

31 July 2009 HKI) 2,0OO,O(J(J 220,358 {).17 0.00x

Cayman Islands C:haoda hlodern Agriculture China Milk Products EFG Ow Funding I1 FUJI Food S; Catering Scrviccs Goldcn Eagle Rctail Group Hengan International Group K~ystone Capital NC International

0.00'lo O.O( )K

1 .00% 0.00'Yo 0.00x 0.00% 0.10% 0.00%

8 m y 201 1 5 January 2012

29 November 2009 9 November 2009 23 October 201 1

16 May 201 1 4 April 201 3

15 March 201 1

HKD 2,500,000 [!SI3 400,000 EUR 1,020,000

BKD 2,820,000 HKI) 2,330,000 HKD 2,820,000 JPY 52,000,000 JPY 10,000,000

281,82 1 303,3 16

1,345,502

257,571 35 1,460 380,753 82,31 1

389,521

0.22 0.24 I .05 0.30 0 . 2 0 0.27 0.30 0.06

3,392,2s5 2.64

Datang 1nternation.il I'owcr Generation 0.75% 9 September 2008 I;SIl 58,000 60.5 I 0 0.05

China

France Arlrmis Conscil Calyon Cap Gcrnini

Compagn~e Gcncralc des

France Trlecom I'uhlicis Groupc Ral1J-e Societe Gcncrale Option Europe Socicte (;ener;rle Option Europe Societe Gcnerdle Option Eumpe Societe Genemle Option Europe Societe Generalr Option 1:iirope bocietc (;cncralc Option Europe Valeo Vivendi Wcntlel Investisseinent

Establissements Michelin

2 00% 31 July 2011 EUR 806,650 1.00% 30 September 2010 EUR 540,000 2.50% 1 January 2010 ElJli 13188,300

0.00%, 1.60% 0.75% 3.75% 0.ZSVu 0.25'Vu 0.50% 0.50% I .00% 1 .00% 2.38% 1.75% 2.00%

Germany Krcditanbtalt filer Wieiederaiifhiu Kreditanstalt fuer WiCdCFdUfbdu RWE SWISS BE Germany IIolding

1 January 2017 EUR 1,401,570 I January 2009 ECR 1,66Y ,907

17 July 2OOH ELR 920,750 1 January 2008 ELI{ 246,400

29April 2010 ECR 2,450,000 1 Scptemhcr 201 1 EliR 465,000

25 June 2010 EUR 1,485,000 19 Octoher 2010 EUR 280.000 3 October 201 1 EUR 1,290,000

19 April 20 12 EIJR 900,(JO(J 1 January 201 1 EI!R 719,200

30 October 2008 E1:H 384,092 19 June 2009 ELR Y27.343

0.50% 3 Febniarv 2010 EUR 500,000 0.75?4 H August 2008 EUR 2,150,000 0.00% 22 June 2007 EUlt 450,000 6.13% 23 July 2007 EUR 814,000

935,395 720,792

1,429,737

1,472,796 1,646,424 1,163,817

293,080 2,990,2 2 5

494,275 1,528,807

408,660 1.277,100

993,150 800,ZjS 437,979

1,368,102

0.73 0.56 1.11

1.15 1.28 0.91 0.23 2.33 0.30 119 0.32 0.99 0 77 0.62 0.34 1.07

17,960,597

605,300 2,101,582

469,413 890,516

13.99

0.47 1.64 0.3: 0.69

64

F&C Portfolios Fund SICAV - F8C Global Convertible Bond Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rate Date CCY Value E Assets

Germany (continued) Wuertt 2.25% 17April 2008 DE41 1,560,000 784,654 0 61

Guernsey Calyon Financial Products Calyon Finintial Products Calyrm Financial Products

4,851,465 5.78

0.25% 27 February 2011 EUR 750,000 756,375 0.59 0.5006 23 December 2010 EUR 275,000 416,570 0.32 1 00%, 3 July LO1 1 ELR 800,000 9 1 2.800 0.71

2,085,745 1.62

Allanii I’rivatiaanios t‘s V;rgyonkezelo 1 OOX 28 scptcmhcr 2009 EUR 600,000 691,416 0 54 Hungary

India 1:arscn & Touhro Reliance Communications Reliance Communications Knitcd Spirits

0.00% 28 January 201 1 F.UR j0,000,000 260.990 0.20 0.00% 10 May 201 1 USD 400,000 344,430 0 27 0.00% 1 March 2012 IJSD 400,000 308.406 0.24 2 00% 30 March 201 1 USD 400,000 343,65 1 0.27

Ireland Magnolia Finmcc. 4.00% 20 March 2049 EUR 1,100.000 1:nicrcdito Italiano Hank Irchnd 2 50% 19 Ilcccmbcr ZOO8 liUR l,600,00o

Italy (hpitalia City of Nil;in Telccom Italb

1 . c , j x 7 May 2009 FUR 1,250,000 2.25% 22 Decemher 2009 EUR 445,200 1.50% 1 January 2010 EUR 630,000

0.9H 1,257,477

1.255,617 0.98 1 ,s93.6oo 1.47

3,149,217 2.45

1,532,625 1.19 573,186 0.45

0.60 766,395

Japan Alps Elcctric Assct Managers Central Glass CSK iloldings Dainippon Scrccn Manufacturing Fujitsu Hamarnatsu Photonics LMarui Matsui Sccuritic-s Nagoya Railroad Nippon Yusen Kabushiki Kaisha NTN Park24 Rico h Sharp Shoei

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00x 1.15% O.OO‘%,

0. ()ox, 0.Oox~ 0.00% 0.00% 0.00x

0.00% 0.00%

3 1 March 20 10

31 March 2010 2 September 201 1

30 Srptrmber 2009 27 May 2009

30 Septemhcr 2009 31 January 2012

3 I March 201 1 30 March 20 12

24 September 2026 19 March 2009

10 April 2026 7 Ikcembcr 201 1

30 Septenibrr 2013 30 Deccnibcr 2009

I8 iMarch 201 1 JFY 12,000,000 Jl’U 10,000,000

JPY 1 5,000,000

JPY 24,000,000 JI’Y 120,000,000 JPY 14,000,000

JPY 36,000,000 JPY 13,000,000 J PY 20.000,OOO JPY 2 1,000.000 JI‘Y 18,000,000 J I’Y 55,000,000 JPY 25,000,000 JPY 14,000,000

JPY 21,000,000

JPY 19,000,000

2,872.206

82,887 71,219 92,481

144,127 191,338 780.730 143,639 132,813 25 1,266 93,088

158,080 185,113 121,326 4oi,nn3 173,874 105.181

2.24

0 07 0 Oh 0.07 0.11 0.15 0.61 0 1 1 0.10 0.20 0.07 0.12 0.14 0 10 0.31 0.14 0.08

65 F&C Portfolios Fund SICAV Interim Report & Accounts 2007

F&C Portfolios Fund SICAV - F&C Global Convertible Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Security Description Rate Date

Japan (continued) Sony 0 00?4 18 December 2008 Sumitorno Electric Industries 0.2% 30 September 20OH Sur.uki Motor 0 00% 29 March 2013 'I'okyo Seiiiiits~i 0.00% (7 Octohcr 2008 Toray Industries 0.00% 12 March 2012 'I'oshiba 0 00% 21 July 201 1 Yamada lknki 0 00% 30 Scptcmbcr 2009

Nominal Valuation CCY Value €

JPY 105,000,000 776,172 JPY 16,000,000 145,846 JPY lO5,OOO,OOO 779,75 1

JW 10,000,000 66,100 JPY 30,000,000 284,597

JPY 25,000,000 171,688

J PY 5,000,000 97,258

% of Net Assets

0.61 0.11

0.61 0.13 0.05 0.22 0.08

5,450,657 1.25 Jersey hldar Funding 5.77% 10 Novcmher 201 1 1.IS1) 720,000 571,974 0.45

Punch Taverns Redwood 5.00% 14 Ikceniber 2010 GBP 730,000 1,409,826 1 .10 1113s 0.13%) 9 February 2009 LJSIl 610,000 532,877 0.41

UBS 4.35% 18 February 2010 EUR 650,000 948,350 0.74

Lonza Finance 1.50% 15.luly 2009 CHF 1,200,000 983.769 0.77

IJBS 2.00%, 22 February 2010 GRD 500,000 734,634 0.57

Vecbnta Financc 4.60'k 21 February 2026 IlSD 900,000 846,474 0.66

6,027,904 4.70

SK l'elccom 0.00% 27 May 2009 USD 320,000 286,199 0.22 Korea

Luxembourg Allegro Illvestment 0.00% 27JuIy 2010 EUR 2,050,000 2,078,187 1.62 Allegro Invcstmcnt 0.251% 15 June 2009 EUR 400,000 481,500 0.37 Allcgro Invcstmcnt 0.501%1 28 June 2010 ElJR 680,000 757,350 0.59 Allcgro Investment 1.50%* 15 January 2010 EIJR 350.000 372,750 0.29

JP Morgan Bank hxembourg 4.50% 4 February 2008 EUR 700,000 1.021,125 0.80 IlcpCon 1.uxcmbourg 4.50% 26 January 2011 I:SD 585,000 660.504 0.51

Fortfinlux S . lY4 7 November 2072 EUR 1,750,000 2,334,430 1.82

Sonata bccurities 1.50% 9 Ilecember 2010 CHF 1,900,000 1,400,709 1.09

9,106.55 5 7.0!1 Malaysia Amcorp Capital L~baun 1.00% 8 February 2010 USD 200,000 163,560 0.13 Commercc Capitdl I.abuan 0.00% 22 Septcmber 2009 USD 100,000 139,887 0.11 Fcringghi Capital 0.00%) 22 Ilcccmbcr 2009 US) 400,000 344:741 0.27 Rafflesia Capital 1.25%) 4 October 201 1 1lSD 300.000 250,584 0.19

898,772 0.70

Schlumberger 1.50% 1 June 2023 r:SD 303,000 434,350 0.34 Netherland Antilles

Netherlands AHN rimro Hank 1.88% 27 October 2010 EIJR 2,050,000 2,580.458 2.01 Adidas-Salomon International Finance 2.50% 8 Octoher 2018 EI!R 250,000 416,705 0.32 Bayer Capitjrl 6 63% 1 June 2009 EUR 2.000,000 3,867,875 3.01

66

F&C Portfolios Fund SlCAV - F&C Global Convertible Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rate Date CCY Value f Assets

Netherlands (continued) BNP Pdribas Arbitrdge I5sll:tnCe Conti-Gummi Finlnce Fugro Hagemeyer Infineon 'Technologies Holdinfi Linde Finance Mnr Aero Engine* Financc Pagesa Q-Cells International Finance Royd Nuniico Scarlct birinens Financc Socictc Gcnerdle Accrptance IJSG Pcoplr

0.00% 1.639s 2.38% 3.50% 5.00% 1.25% 2.77'!% 1.70% 1 . 3 ~ ~ 3 . 0 0 ~ 4.25% 1.38% 0.00% 3.00%

5 September 201 1 19 May 201 1

27 April 2010 30 March 2012

5 June 2010 5 May 2009

1 February 2012 27April 2013

28 February 2012 11 July 2010

15 Februan. 2012 4 June 2010

7 March 2010 18 Octobcr 20 12

EUR EUR WR El JR EUR EUR HJll CHF EUR EG'R EIX ECR EC'R RIjR

845,000 300,000 160,000 62,000

550,000 300,000 200,(100

1,065,000 200,000 225,000 joo,ooo

1,400,000 575,000 150,000

952,991 59 1,000 256,904

90,005

665,159 417,573 233,744 715.279 207,092 427,163 281,250

2,026,738 767.625 271,800

0 76 0.46 0.20 0 07 0 52 0.33

0 56 0.16 0 . 3 3 0 .21 1.58 0.60 0.21

o. in

14,769,341 11.50 Panama Carnival 2.00'X I5 April 2021 LSI) 370,000 344,2 17 0.27

Philippines SIM Invcstmcnts 0 .OO%, 20 March 2012 CSD 390,000 295,587 0.23

Portugal I'arpubliu 2.69% 16 December 2010 EUR 450,000 542,025 0.42

Singapore

Somerset Global 0.00% 12 January 2009 SGD 750,000 452,683 0.35 Flextronics International 1 .00% 1 August 201 0 LSD 680,000 491,204 0.3')

Sweden Svensk Esportkredit Svensk Exportkredit

943,887 (1.74

o. 13% 30 April 2009 USD 900,000 633,blH 0.49 0.25% 14 July 2007 ElJR 1. j95,000 1,486,373 1.16

Switzerland Sw-is:, Lift Holding 0.63%

Taiwan Asustek Computer Chinatrust FinAnCiill Holdings Powerchip Semiconductor Qu:mra Computer I, nitcd M icrorlectronic~

0.00'% 0. O( )'%

0.00% 0.00% 0.00'!4

2.1 19,991 1.65

10 Junc 2010 CHF 685,000 6 18.084 0.4H

I5 January 2009 LJSD 2 10,000 173,747 0.14 H July 2007 IXII 235.000 235,281 0.18

2 February 2010 I!SD 580,000 446,106 0.35

10 May 2007 I;SD 300,000 253.i62 0 20 26July 2010 I!SD 233,000 173,626 0.13

1,282.520 1 .00

F&C Portfolios Fund SlCAV Interim Report & Accounts 2007 67

F&C Portfolios Fund SICAV - F&C Global Convertible Bond Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rate Date CCY Value 6 Assets

Thailand Bangkok Dusit Medical Service 3.75% 12 July 2011 USD 600,000 525,488 0.41

United Kingdom .Ji Group 1 jux I nugust 2 0 0 ~ PAIR 815,ono 1,128,188 0 88

Harclays Bank 2 13% 1 June 2009 GDP 670,000 1.078.703 0.84 Credit Suisse First Hocton International 2 00% 3 Ikccmbcr 2007 IX1R 646,000 902,494 0.70 Friends Provident 5 25% 11 Ilcccmber 2007 G H P 520,000 HH5,028 0 09

AngloGold .4shanti Holdings 2.38% 27 February 2009 USD 800,000 597,650 0.47

United States 3 M ADC: Telecommunications Nlegan Alli;uit Techsystems Amgcn 144A Andrew A r m o r Holdings

Cadence Design Systems Cheslpeakc Encrgy Cohcrcnt 14414 csx Devon Energy Digital Rivcr 144A Dominion Kcsourcrs Electronic I)aia Systems Electronics for Imaging EMC Fair Isaac Fair Isaac 144A Fisher Scientific Internitional Gcncral Mills Hallihurton HCC 1nsur;ince Holdings Health Management Associates Henry Schcin Hewlett-l'ackard Intel 144A Itron Juniper Nctwnrks L-3 Communications Lehman Brothers Holdings Liberty Mcdia Liberty Mcdia I.0WC'S

HCSl Buy

2.40% I .00% 1 . i0% 2.75% 0.13%, 3.25% 2, ()( )'%

2.25"x, 1.38% 2.75')r, 2.75% 0.00% 4.90?/0 1.25% 2.13% 3.88%,

1.50%, I .75% 1.50% 1.50% 3.25% O.( n )%,

3.13% 2.00% 1 . i O %

3.00"x, 0.00% 2.95% 2.50% 0 . (1( )%I

ww, 1 .00% 0.75% 3.25%~ o.nc?x

21 November 2032 15 June 2008

I April 2026 15 Fcjchruary 2024 1 February 201 I 15Allgust 2013

I Novcmher 2024 I5 January 2022

15 Deceniber 201 1 15 Novcmbc'r 2035

1 March 201 1 30 October 2021

15 August 2008 I January 2024

1 i Ilcccmber 2023 15 July 2023 1 June 2023

1 December 201 1

15 August 2023 15 August 2023

1 March 2024 2H October 2022

15 July 2027 1 September 2021

I Ailgust 2023 15 August 2034

14 Oclohcr 20 17 15 December 20.15

1 August 2026 15 June 2008

1 August 2035 2 1 July 2009

30 Mdrdl 2023 15 March 2031

19 October 2021

IJSD C'SD I,.SI) 1;SD LSD IISI) IJSI) I!SD USD CSD IJSll IJSD USD USD LSD I-SD CSD US11 IJSll IJSD I!SI) IJSD IJSD IXD C'SD 1:511 KSD CSU LiSD lJSI)

I!SD lJSD USD I,.SIl LSD

900,000 g10,000 690,000 495,000

2,300,000 2yZ, 300 160,000 440,000 350,000 650,000 J20,OOO 290,000 250,000 310,000 n40,ooo 400,000 330,000 6oo,aoo Ji0.000 200,000

1.080,000 500,000 240,000 280,000 370.000 350,000 500,000

I,050,000 520,000 5.30,ooo 750,000

1,300,000 920,000 460,000 445,000

4,592,063

608,859 222.908 545,094 445,887

1,572.312 223,125 167,726 369,605 297,171 508,814 256.949 3 10,158 262,087 314,729 754,101 316,718 258,141 479,632 287,251 156,027

1,092,992 284,920 307,079 504,439 298,637 346.280 270,885 686,096 468,055 438,052 603,801

1.008,646 807.409 204,443 365,354

3.58

0.47 0.17 0.43 0.35 1.23 0.17 0.1j

0.29 0.23 0.40 0.20 0.24 0.20 0.25

0.59 0.25 0.20 0.37 0.22 0.12 0.85 0.22 0.24 0.24 0.23 0.27 0.21 0.53 0.37 0.34 0.47 0.79 0.63 0.23 0.29

68

F&C Portfolios Fund SlCAV - F8C Global Convertible Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Nominal Value/

Maturity Number of Valuation % of Net Security Description Rate Date CCY Shares f Assets

United States (continued) LSI Logic Lucent Technologics Medtronic Merrill Lynch Millipore Nabors Industries NcsLle Holdings Omnicom Group Prudential Financial Red Hat Rochc Hold~ngs Sanljisk Symantec Teva Pharmaccutical Finance Vornado ltealt!p’I’rust Walt Dime). Wyeth

4.00% 2.75% 1.50% 0.00%> 3.75% 0.00% 0.00% 0.00% 2.61% 0.50% 0.00% 1 .00%, 0.75% 0.50% 3.6SX 2.13% 4.88X

15 May 2010 15 June 2023 15 April 201 1

13 March 2032 1 June 2026

15 June 2023 11 June 2008

1 July 2038 I5 November 2035

15 J a n i i q 2024 25 July 2021 15 May 2013 15 June LO1 1

1 February 2024 15 Novernbcr 2026

15 April 2023 15 Jdnuary 2024

310,000 325,000

2.105,000 1,980,000

370,000 460,000

1,600,000 950,000 600,000 400,000

2.08j,000 680.000 370.000 c)~0,000 400,000

1,250,000 750,000

249,232 246,442

1,799,199 297,811 358,765

1,493,489 765,405

1,62~,076

462,937 324,294

1,481,928 44x,350 297,701 807,029 303,304

1,123,363 598,383

0.19 0.19 1.27 1.40 0.23 0.28 1.16 0.60 0.36 0.25 1.15 0.35 0.23 0.63 0.24 0.88 0.47

28,620,992 22.30

CNOOC Fitlance 2004 0.00% 15 December 2009 CSD 660,000 594,232 0.46 Virgin Islands (British)

SHARES France PPI1 2,631 316,957 0.25

Germany DeutscIrc Post 52.408 1,187,566 0.92

Netherlands Hagemeyer

. - .._ __

76,470 272,233 0 . 2 1

United States Mctlifc 40,2 2 5 963,545 0 75

CONVERTIBLE PREFERRED BONDS Australia Futuris 7.00% 31 December 2007 All11 117,800 179,182 0.14

United States Ford Motor Co. (:spital Trust 11 6.50%) 15 January 2032 I.:SI) 20,726 554,803 0.43 Travelers Property Casiialty 4.50% 15 April 2032 [!SI> 37,300 71 1,434 0.56

1,266,237 0.99

F&C Portfolios Fund SlCAV lnterlm Report & Accounts 2007 69

FBC Portfolios Fund SlCAV - FPXC Global Convertible Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value 6 Assets _______ ____

UNQUOTED SECURITIES United States Gcnryme 144A 1.25')b 1 December 2023 ['SI) 405,000 313,019 0 24 Ncws Corp FinanceTrust I1 144A 0.7 5% 15 March 2023 I W 1,160 883,220 0.69 Sealed Air 144A 3.00% 30 June 2033 LSI) 350,000 267,513 0 21 \%hay Intertechnology 144A 3.63% 1 August 2023 IJSI) 130.000 97,921 0.08 Wshington Mutual Capital Trust 2001

(Lonvertihlc Preferred 13ond) 5 38% 5 May 2041 VSl) 6,700 269.826 0.21

Total Investments Other Net Assets

1,831,499 1.43

122,284,052 95.26 6.090,064 4.74

Total Net Assets 128,374,116 1 0 0 . 0 0

'I'he accompanying notcs form an intcgral part of thcsc financial statcmcnts

70

F&C Portfolios Fund SICAV - F&C Global Convertible Bond Distribution of Investments by Economic Sector

Sector % of Net

Assets

Banking & Financial Senices Information Technology Chemicals Tclccommunications Medical - Drugs Electric, Electronic Equipment and Engineering Insurance Electric LJtility IMedical - Products Holding Companies-Diverse Auto Parts & Equipment Industrial Conglomcrdtcs Media Food, Beverage & Consumer Goods Oil & Gas Advertising Medical - Biomedical/Genetics Rc1ail ‘li-ansporvation Miscelhneous Manufxturing Miscellaneous Aerospce & Defense Vcnturc Capital Semiconductors Computers Electrical Component Sr Equipnient Investment Companies Met;rls & Mining Auto Manufacturers Consunicr Goods AgriCUltlJrt! Medical - Hospitals Finance & Financial Services Entertainment Food Scrvice IIealtlicare-Products Travel Hevengcs Heal Estate Medical - Services Internet Softwire Distrihution~holesile Human Rcsourccs I’apci-, I’ulp & 1)ackaging Enginecring d Construction Construction tk Building Materials Cornmerical Services Building Lyr Construction

41.30 3.86 3.78 3.71 2.91 2.84 2.71 2.53 2.12 1.80 1.77 1.76 1.73 1.72 1 .hh 1.50 1.47 1.42 1.56 1.06 0.95 0.95 0.88 0.87 0.72 0.70 0.68 0.61 0.61 0.52 0.46 0.41 0.34 0.34 0.30 0.21 0.27 0.27 0.24 0.23 0.23

0.21 0.21 0.2 1 0.20 0.17 0.10 0.07

0.23

‘Ihtnl liivestnients Other Net Assets

95.26 4.74

‘Ihtnl Net Assets 1 00.00

F&C Portfolios Fund SlCAV Interim Report & Accounts 2007 71

F&C Portfolios Fund SICAV F&C Emerging Markets Bond

Performance Over the past six months the A share class returned 0.74% (nci of fees), maginally outperforming its benchmark, the JPM EMBI Plus’l’ruc Index which rose by 6.72%,.’l’he B sh:ire class returned 5.94% (net of fees) underpcrforming the same benchmark.

The Commerzbank Global Emerging Markets bond EUR Hedged sharc class rcturncd 5.7% (nct of fees) compared to the risc

in its index, the JPM EMDI Hedged Index of 6.25%.

Market Review Over the coursc of tlic rc!porting pcriod the last three months of 2006 contributed positively to thc overall performance of

the portfolio. High risk appetite and volatility at historically- low levels were supportive for emerging market bonds. The

portfolio was overweight in longer kited bonds of Latin Aniericm issuers which benefited from thc positive market

environment. hrtcr a positive start in January 2007, risky assets sold off in February on the back nf a plunge in Chinese equities.

The portfolio cndcd the rcporting pcriod almost unchanged versus the benchmark.

Outlook Progrcbsivc debt managcmcnt, mucturdl reforms and a favourible overdill economic environment have resulted in historically

low levels for sovereign debt spreads Risk factors for the asset class are mostly external and include a changc in glohal risk

sentiment, or tightening in global liquidity.

We see interesting investment opportunities in crncrging markets government lionds denominated in local currency. In particular, currencies supported by external surpluses are rxprctetl to perform well in a weak US Dollar scenario.

Helene Williamson Portfolio Manager Ami1 2007

Note: The information containcd in this rcport is historical and not indicative of futurc performance.

Statements contained i n this report concerning future performance are the opinions of management and there can lie no guamntec that such opinions will prove to he corrwt.

72

F&C Portfolios Fund SICAV - F&C Emerging Markets Bond Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Securitv Descriation Maturity Nominal Valuation % of Net

Rate Date CCY Value $ Assets

BONDS Argentina Argciitina (Republic of)

Argentina (Kcpublic of)

Argentina Qepuhlic of)

Argentina (Republic of) Argentina (Republic of)

r\rgentina (Republic of)

15 1)cccmhcr 2035 31 Dcceinher LO38

3 August 20 I2 28 March 20 I I

12 September 20 13 31 Ilcccmhcr 2033

Brazil Brazil (Fcderal Republic of)

Brazil (Federal Republic of) H r A d (Fcdcral Rcpuhlir: of)

k i z i l (Federal Rcphlic of)

Brazil (Federal Republic of) RraA (Frded Republic of) Hrdtil (F'ederd Republic of) Brazil (Federal liepublic of)

Brazil (Federal Republic of)

6 .()OX

7.13% 7. HH'X 8.00% 8.25% 8.88%

1 0.25X 11.00% 12.50%

1: January LO17 20 Jdnuary 2037

7 ,March 201 5 15 January 2018 70 January 2054

14 Octoher 2019

17 August LO40 5 Januav 2022

10 January 2028

6,000,000 827,700 1,500,000 780,750 3,250,000 2,307,022

700 .ooo 669,589 3,000.000 2,881,833 1,591,053 1,855.964

9,322,858

1,000,000 3,000.000 1,000,000 5,000,000 2,600,000 1,000,000

2,000,001~ 2.500,OOO

1,900,ooo

1,010,500 3,320,250 I , 140,500 5,650,000 5,263,650 1,265,250

921,187 2,69i, 500 1,421,090

0.88 0 83 2.47 0.72 3.08 I 38

9 96 ~

1 08 3.55 I .22 6.04 3.49 1.35 0.98 2 88 1.52

Bulgaria Bulgaria (Republic of)

20,6n9,927 22. I 1

8.25% 15Januar)- 2015 I 3 1 1 400,000 474,000 0.51

Colombia Colombia (Kcpublic of)

Colombia (Rcpuhlic of)

Colombk (Republic of) Colombia (Republic of) Colombia (Republic of)

7 16% 16 November 201 5 IS11 750,000 792,375 0 85

7 3H% 27 January 2017 K;W 1,000.000 1,090,000 1.17 7 38% 18 September 2037 CSD 500.000 544,500 0.58 n 13x 21 May 2024 LSI) 500,000 584,375 0.62

10 7% 15 January 201 3 [,SI) l,OOO,OO() 1,242,000 1.33

Croatia Croatia (Republic of)

4,253,250 4.55

6.22%, 31 July 2010 KISD 636,362 640,498 0.68

Ecuador Ecuador (Kcpublic of) 9 58% 15 Ileccmber 2015 LS1) 250,000 239.81 2 0.26

Indonesia Indonesia (Republic of) lndoncsia (Republic of)

6. HHOb 9 March 2017 LSD 500,000 529,250 0.57 8.50%, 12 October LO35 M I ) 750,000 721,375 0.98

1,450,625 1.55 Ireland I1ali (3piral (Vncshtorghank) 7.00% 13 April 2009 R U H 55,000,000 2,140,955 2 29

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 73

F&C Portfolios Fund SICAV - F&C Emerging Markets Bond Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value $ Assets

Malaysia Malaysia (Republic of) 3.87% 13lpril 2010 MYR 8,500,000 2,488,996 2.66

Mexico Knited Mexican States United Mexican States United Mexican States United Mexican States Unitcd Mcxicm States I:nited Mexican States

5.63% IiJanuary 2017 K:SD 1,500,000 1,513,500 1.62

7.50% 8 April 2033 LSD 1,500,000 1,787,625 1.91 8.00% 24 Scptcmbcr 2022 lJS1) 1,000,000 1,235000 1.32 8.13%) 30 December 2010 US11 1,000,000 1,230,000 1.31 8.30% 15 August 2031 CSD 750,000 968,250 1.04

6.75% 27 Septcmbcr 2034 USD 1,500.000 1,638,375 1.75

Panama Ismama (Republic of) lhnama (Kcpublic of)

Panama (Republic of)

8,370,750 8.95

6.70% 26 January 2036 USD 500,000 519.250 0 56 7 1 j% 29 January 2020 I:SD 500,000 541,875 0.58 7.25% 15 March 2015 I313 1,000,000 1,086,000 1.16

2,147,125 2.30 Peru Peru (Ihqmblic of) 6.13% 7 March 2017 IJSD 705,000 705,000 0.75 Peru (Republic of) 7.35% 21 July 2025 CSD 1,000,000 1,140,750 1.22 Peni (Itcpublic of)

Peru (Kcpublic of) 8.38% 3 May 2016 I;SD 243,570 280,554 0.31 8.75% 21 Noverribcr 2033 IISI) 250,000 329.187 (1.35

2,464,491 2.63 Philippines

Philippines (Republic ot) 7.50%) 25 September 2024 KJSD 1,500,000 1,651,837 1.77 Philippines (Republic of) 8.00X 1S.lanuarV 2016 USD 130.000 146,893 0.16 Philippines (Republic of) 9.88%~ 15 Janiwry 2019 CSD 1,000,000 1,292,450 1.38

Pliilippincs (Rcpuhlic of) 6.58% 15 January 2032 IISI) 2,000.000 1,947,500 2.08

Philippines (Kcpublic of) 10.6YX I6 March 2025 1;SI) 500,000 710,625 0.76

5,749,305 6.15 Russia

Russia (Federal Ikpublic of) 7 50% 31 March 2030 KJSD 11,250,000 12,7;5,7H2 13.66 Russia (Federal Republic of) 1 1 .OO% 24July 2018 USD 500,000 722,500 0.77

Turkey Turkey (Republic of)

Turkey (Kcpublic of)

‘I’urkey (Kcpublic of) ‘hrkcy (Republic of) Turkey (Republic of)

Turkey (Republic of)

‘L’urkcy (Republic of)

6.88% 17 March 2036 CSD 2,000,000 1,915,000 7.00% 26 September 2016 I.iSI) 1,400,000 1,424,841 7.25% 15 March 201 5 IJSI) 2,000,000 2,076,870 7.38% 5 February 2025 IJSD 1,500,000 I , 543,125 9.00%, 30 June 2011 USD 500,000 555,925

11.50% 23 January 2012 GSD 500,000 610,313 1 1 .88% 15 January 2030 LS1) 500,000 768,750

14.43

2.05 1.52 2.22 1.65 0.60 0.65 0.82

8,894,824 9.51

74

F&C Portfolios Fund SICAV - F&C Emerging Markets Bond Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value $ Assets

Ukraine Ukraine (Republic of) Ukraine (Republic of)

6.58% 21 November 2016 USD 530,000 5 37,288 0.57 7.65‘% I1 June 2013 USD 500,000 542,775 0.58

1,080,063 1.15

United States k m c x Projcct Funding Master trust 7.75% 31 Ileccmhcr 2049 U D 1,000,000 1.040,500 1 . 1 1

Venezuela Venezuela (Republic 01) 0.00% 15April 2020 USD 14,180 517,570 0.55 Venezuela (Republic of) 5.75% 26 February 2016 USD 1,000,000 941,500 1 0 1 Vene~ueh (Rcpuhlic of) 7 651% 21 April 2025 USI) 1,000,000 1,062,250 1.15 Venezuela (Republic of) 8.50% 8 October 2014 USD 400,000 446,500 0.48 Vtnezuel.1 (Republic of) 9.25% 15 September 2027 USD 2,750,000 3,461,563 3.70

6,429.3R3 6.87

Total lnvestmcnts Other Net Assets

91,575,644 97.67 2,1H2,831 2.33

‘ l i W Nct Assets 93,558,475 100.00

The accompanying n0tc5 form an lntcgral part of thcsc financial statcrncnts

FBC Portfolios Fund SICAV Interim Report & Accounts 2007 75

FBC Portfolios Fund SICAV - F&C Emerging Markets Bond Distribution of investments by Economic Sector

% of Net Sector Assets

Sovereign 94.27 Banking & Financial Services 2.29 Oil & Gas 1 . 1 1

‘Lhtal Investments Other Net Assets

97.67 2.33

‘1i)tnl Net Assets

76

100.00

F&C Portfolios Fund SICAV F&C Euro Inflation Linked Bond

Performance

During the six month to the 31st March 2007, the portfolio fell 1.81% (net of fees) versus a fall of 1.56% in the henchmark,

Barclays European Inflation Linked Bond Index, The untlerperformancc wab mdinly due ti) the fact that the portfolio was

positioned for a dccrcase of bond yields, but o n halancc yields rose during this period. Longer datcd inflation-linkcd bonds fcll largely as a result of rising real yields and a steep increase in new supply of longer dated bonds durin& the first quarter. Other

portfolio activity addcd to performance, such as the underweight position in French inflation-linked bonds and the overweight

in Italian honds.After reducing duntion in December last year,we increased portfolio duration at the end of February as riskier

assets sold off aggressively and economic growth prospects for the US were weakening. Howevcr, in the last weeks of March

equity markets rebounded and fears of a strong slowdown in IJS growth receded.This improvement in the outlook for IJS

growth triggered a cut of our overweight duration position back to neutral.

Market Review h s a result of strong economic growth data and furthcr interest rdtr increases hp the ECB, 1O-year European nomind bond

yields rose from 3.70%) to 4.06% over the six months.bt the end of February, the financial markets started to worry about the

growth prospects in the US as a result of the ongoing problems i n the US housing market and the possibility of a knock-on

effect on consumption growth and the stock markcts.'l'his temporarily caused a bond ral ly in all major markets. However, once

the risk iiversion receded, risk assets rehoiinded and bond prices fell. Inflation expectations in Europe dropped (luring the

pcriod mostly as a result of benign inflation numbers and the incrcasc in issuance o f inflation-linkcd bonds.

Outlook The world economy will most likely keep growing at an ahove average rate, despite the relatively weak numbers printed in

the I:S. Many central hanks, including the ECB, will therefore continue to increase their official rates. Otherwise, inflation

numbers might increase further as demand for commodities and high capacity utilisation can push prices up.'l'hc cxception

to this ongoing tightening is the US centixl bank, which perhaps would lower interest rates to support economic growth if

thc current high inflation numbers fail to remain 1ugh.The outlook for the Europcan bond mwkets is closely linked to the

dcvelnpmcnts in the LIS. If growth would pick up in that region as well, interest rates would continue their path higher.

Inflation-linked bonds might outperform nominal bonds in this environment, because of their protcction against adverse

inflation movcmcnts. Hut rohust cconomic growth rates might rcsult in a furthcr risc o f real yields as well.

At the end of the period, tlic pi)rtfOlio duration had a neutral position.As 3. result of the conflicting signils on the direction of economic growth. especially in the 1;s. a tactical approach mill be used on duntion policy. Up to now, bond prices have

dropped as market participants have incre:ised their economic growth forecists, however, this might changc rapidly if risk

a55rts scll off.l'his might cause a change in the market direction for bonds.

Michiel de Bruin

Portfolio Manager April 2007

Note 'Ihc information contained in this report is historical and not indicative of future performance.

Statements contained in this report conccrning future pcrformancc are the opinions of managenlent and there can be no

guanntec that such opinions will prove to bc corrcct

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 77

F8C Portfolios Fund SICAV - F8C Euro Inflation Linked Bond Schedule of investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value E: Assets

BONDS France Caisse d'Aniortisscrncnt dc la Dette

Sociale Inflation h k c d France (Government of3 Inflation Imked Frmce (Government of) Inflation Linked Frmce (Government of) Inflation Linked France ((;ovcrnment of) Inflation Linkcd France (Govcmmcnt of Inflation Linked France (Gowrnment of) Inflation Linked Frdncc (Govcmment of) Infhtion Linked France (Govcrnmcnt of) Inflation Linked

3.40% 1.60% I .no'% 2.25% 2.50XB 3.00X 3.00% 3.15% 3.40%

25 July 201 1 EKR 25 July 201 1 EKR 25 July 2040 EUR 25 July 2020 EUR 25 July 2013 H l R 25 July 2009 ElJH 25 July 2012 EUR 25 July 2032 BUR 25 July 2029 E l X

1,543,558

2,325.259

4,396,866

3,077,253 5,120,078 5,159,317 3,486,089 1 ,046,49 I 3,475,266

1,630,923 4,327,395 2,227,261 3,177,664 5,281 3 4 5,278,910 33698,078 1,781,282 4,292,788

2.82 7.47

3.85 5.49 9.12 9.1 1 6.38 2.21 7.41

31,196,225 53.86 Germany Gcrmany (Federal Republic of) Inflation Linked1 -50% 1 j April 2016 EIJR 6,942,006 6,700,022 11.57

Greece Greccc (Rcpuhlic of> Inflation Linked 2.9OX 25 July 2025 El:R 2,894,320 3,175,937 5 48

~ ~~~~~~ -.

Italy Italy (Republic of) Inflation Idinked 0.95% 15 September 2010 EIjR 2.871.633 2.793,889 4.82 Italy (Repuhlic of) lnflarion Linked 1.65% 15 September 2(J08 EIJR 770,754 772.619 1.33

Italy (Republic of) Inflation Linked 2.10% 15 September 2017 EIJR 5,365,385 5,183,718 9.30 Italy (Republic of) Inflarion I.inked 2.15% 15 September 2014 EIJR 5,031,756 5,101,698 8.81 Italy (Republic of) Inktion Linked 2.35X 15 September 2035 ECR 2,888,340 2,928,199 5.06

Total lnvcstmcnts Otlicr Net ASst'ts

16,980,123 29.32

58,052,307 100.23 -134,892 (0.23)

57,917,4 15 100 00

I h e accompanying notes form an intcgral part of thcsc financial statcmcnts.

78 I

F&C Portfolios Fund SICAV - F&C Euro Inflation Linked Bond Distribution of Investments by Economic Sector

% of Net Sector Assets

Sovereign 100.23

Total Inrcstme~its Other Net Assets

Total Net Assets

1 00.23 4.23

100.00

F8C Porttolios Fund SICAV Interim Report & Accounts 2007 79

F&C Portfolios Fund SICAV F&C European SmallCap

Performance For the six month period to 31st March 2007, the net a5set mlur of the Portfolio rose by 20.0% (net of fees) in euro terms compared to a retwn of 21.9% from the benchmark HSHC Smallcr Europc (incl. CK) Index.

The Portfolio’s mdrgindl underperformance compared to the index return can be attributed to the Continental European selection whereas the UK portion of the Portfolio registered strong relative gains over the period. Notable winners in the IJK wcrc food and bcvcmge opcrator Restaurant Group with a rise of 52% in local share pricc terms, international serviccs company Serco which surged 47%, following good 2006 hill year results, and Laird Group, up by 4% following the disposal of its building products division. In Europe. another strong pcrformancc fmm Ncochimiki, up by h j% over the six month period, prompted us to crystallisc a sizeable accumulated gain since first purchase and exit from the position entirely. Other winners in Europe included capital goods company Andritz which rose by 56%. and I)ulch-hascd enginccring consultancy Arcadis which put on 38%. Both these companies remain i n the Portfolio as we believe that there is further upside left in their rcspectivc sharc price. Performance in the Continental European portion of the Portfolio was Ict down hy the French selection in particular, with aerospace parts supplier Litkcokre off by 14% and media 1iardmm-e concern I1F Company down by 9%; the lattcr company now sold.7‘here were also disappointmcnts from natural gas tanker transport company Hcrgcscn Worldwide Gas, down by 11%. and Finnish anti-vims software provider F-Secure, 8% lower.

Market Review ‘I’hc pcrformancc of the European smaller company asset class over thc period cnd September 2006 to end hlarch 2007 conformed to the classic seasonil pattern established in recent years.The run-up to Christmas often sees investors willing to chase smaller company share prices higher in anticipation of the traditional nllv at the beginning o f the ncw calcnilar ycar. The result is that prices rise throughout the late autumn to early spring period only to consolidate or even retrench during the summer months. In 2006/7 the seasonal uptrend was given added momentum by the mergers and acquisition (M&A)

fxnzy which picked up towards the end of the year and has continued into 2007. Over the entire 2006 year. MsrA deals in the small capitalisation asset class totalled almost 1;SS400 billion in Cotitinental Europe alone.

l h e economic climate was also conducive to strong share pricc gains. In (hntincntal Europe the cxport-led surgc spilled ovcr into higher capital expenditure and improved consuiner confidence. In the I:K the economy showed little sign of a significant slowdown dcspite interest rate incrcascs from the Hank of England

Outlook Strong earnings releases and takeover activity and speculation have so far supported the sharc prices of smaller conipanies in 2007.’I’his in itself is no guard against a correction at some point. Currcnt valuations imply a high douhlo-digit intrcase in rarnings again this year - something which might well he difficult to achicvc if economic growth starts to hlter and sterling and curo continue to strcngthcn against other world currencies.We intend to focus the I’ortfolio on names which are capablc of delivering sustainable earnings growth and shareholder value creation i n 311 economic conditions. These names include many stocks which have remained within the 1’r)rtfolio sincc inccption and which continue to trade on attractivc mtings. Wc are also finding selective opportunities among realistically-priced international public offerings.

Crispin Longden Portfolio Manager April 2007

Note: The information contilined in this report is historical and not indicative of future performance.

Statcments rontainrd in this report concernmg future performance arc the opinions of managcmcnt and thcrc can hc no

guarantee that such opinions will prove to be correct.

80

F&C Portfolios Fund SICAV - F&C European SmallCap Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares E Assets

SHARES Austna Andritz 26,000 4,882,540 4 69

Belgium hletris International Holding 60,536 966,154 0.93 1'iC;cn ix 174,621 1,187,423 1.14

2,153.577 2.07 Cyprus Bank of Cyprus 305,000 3,464,800 3.73

Denmark Topdanmark 30,250 4,384,539 4.21

Finland F-5ecui-e 471,637 933,841 0 90 O K 0 Bank 'A' 175,000 2,233,000 2.14 Outokumpu 'I'cchnology 69,656 1,942,009 I x7

5.108.850 4.91 France 1.atccoerc ?6,000 1,72 1,400 1.65 Xlanitou 54,000 2,149,200 2.07 Neopost 24,830 2,656,810 2 55 Nexity 65,000 4,147,000 3.98

10,674,410 10.25 Germany K+S 27,500 2,264.350 2.18 hlTlj Aero Engines Holding 81,000 3,627,990 3.48

5,892,740 5.66 Greece Frigoglass 1 I 5,000 2.035.500 1.95

Ireland C M : Group 175,000

Iaws Group 135,000

Norkom Group 400,000

CPL Resources 1 1 1,342

Kingspan Group 160,000

Italy Digital Multimedia 'Icchnologics Hem

37.807 86 5,000

1,995.000 H46.199

2,352,605 3,189,997

i91,927

1.92 0.81 2.26 3.06 0.76

9,175,728

2,731,934 2,724,750

8.81

2.62 2.62

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 81

F&C Portfolios Fund SICAV - FBC European SmallCap Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares € Assets

Italy (continued) I’iaggio & C 700,000 2,665,250 2.56

8,121,334 7-80 Netherlands Arcadis 49,145 2,358,360 2.27

Norway Bergesen Worldwide Gas BW Offshore Ekornes

265,000 650,000 106,300

2,503,495 2.40 2,040,215 1.96 1,903,789 1.83

Spain Indm Sistemas

6,447,499 6.19

100,ooo 1,887,000 1 .HI

Switzerland Logitech lnterndtirrnal Schweizerhall Holding

3.29 13,943 1,652,350 1.57

165,000 3,43 1,319

United Kingdom Avevii (;roup I ritcrtck Group Gier Group Laird Group LMcggitt

Meggitt (Rights) Morgan Crucible Ratlibone Brothers Rcsrdurdnt Group Serco Group SIC; Victrex

218,090 169,500

375,000 480,522 240,261 556.500 138,950 642,500 446,000 176,940 229,297

81,500

5,063,669

2,632,239 2,264,348 2,883,735 3,OJ 4,613 2,113,797

351,414 2,195,838 2,684,52 1

3,455,983 3,023,419 3,306,366 2,622,176

4.86

2.53 2.17 2.77 2.89 2.03 0.34 2.11 2.58 5.32 2.90 3. 18 2.52

Total Invcstmcnts Other Net Assets

30,548,449 29.34

102,199,795 98.15 1,929,609 1.85

‘Ihtal Nct Asscts 304,12y,404 100.00

l h e accompanying notcs form an intcgrdl part of thcsr financial statcmcnts

82

F&C Portfolios Fund SICAV - F&C European SmallCap Distribution of Investments by Economic Sector

Yo of Net Sector Assets

Building & Construction 11.27 Macliiner).-l>iversified 8.7 1

Aerospace & Defcnsc 7.50 (:crrnputcrs 5.82

Comrnerical Services 5.08

Banking & Financial Senices 8.05

Icetail 5.15

Cheniicds 4.69 Insurance 4.21 Food, Beverage & Consumer Goods 4.18 Real Estate 3.98

Information Technology 2.71

Energy 2.62 Auto Manufacturers 2.56

Transportation 2.40

Oil & Cas Senices I .96 Macliiner!.C:onstructi~n~~ining I .87

Electric Products 2.90

Telecomm unicatiorls 2.62

Officc/Husiness Equipment 2.55

Manufacturing 2.11

Software 1.69 Jnwstment Companies 1.57

Hunian Resources 0.81

Total Investments 98.15

Hiotcchnology 1.14

Other Nct Asscts 1.85

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 a3

F&C Portfolios Fund SICAV F&C Far East Equity

Performance

The Portfolio performed well over the six months to 31st March 2007and rose by more than 17.5% in euro terms (net of fees),

which is significantly ahead of the benchmark, the FTSE All World Asia Pacific Ex Japan, EXAUStrdlid, Ex New ZealandTR Index

which increased by 11.24%.

Market Review

Markets were very stmng, rising in aggregate hy over 13% since thc end of Septcmber 2006, driven primarily by South East

Asian equities.This was partl!: a rcsult of the refldtionary domestic environment, which is an area that the fund has increased

cxposure to throughout the last year. Indonesia was the earliest market to show concrete signs of its positive economic

growth, followed by Malaysia in 2007.The Philippines. although having already performed well in stockmarket terms, was later

in the economic cycle and only in 1)ccembcr saw a significant increase in loan growth above 10X.lhis is the rcsult of a strong

fiscal position m d subdued inflation allowing interest mtes to remain low.The strong economy is aided by hraltliy repatriation

by forcign workers, reaching USS1.3 billion in Decemher alone.

Thc exccption to thc South East Asian reflationary succcss story w i s the I'hai market, w-hcre a c w p led to a sclf-installcd

military government. which aims to hold powcr until thc constitution can he re-writtcn and elections held, likely to he towards

the end of 2007. One of the new govcmment's early acts was to impose capital controls in an attempt to stop theThai baht

apprcciating.'I'his took intcmationxl investors by surprisc. and causcd a selloff of almost 15% in a single day, following which

the measurcs wcrc partially withdrawn.The inconsistency of the policy is the most concerning factor, and although the market

has recovered much of its losscs - driven in part by interest-nte cuts - future policy shocks cannot he rulcd out.

The otlrer key event for equity markets over the past six months has been the very stlung returns of the A-share China market,

and an enormous appctitc for IPOs of mainland Chincsc Hong Kong listings 'I'hc hcight of this was the record-breaking listing

of ICHC in 2006.Wiile the fund flows arc likely to remain a supportive factor for equity markets in the foreseeable futurc. wc

are concerned that thc Vdhmtion5 achieved by the A-share marker no longer reflect funtlamental value.

Outlook

Ilcspite the rcccnt markct correction, valuations in Asia still look to hc quite full. Howcvcr. wc beliew that Asian cquitics will

drrivc some support from domestlc growth and eirnings expansion. In addition. the prospect that Asian econoniles will

hccome less tied to the US (the pcrccntagc of total export5 to the US is declining) reinforces our view that there will he

opportunities to generatc rctiims. Continued demand from China is likely to support the resources sector, and we continue to

hvour companies well placed to bcncfit from this theme, particularly in Auswalia.

Although the effects of a weaker US economy can be significant in this region and should not be underestimated, strong

current accounts and morc rclaxcd fiscal policy in Asia should provc heneficial for domestic demand.

Mark Williams

Portfolios Manager April 2007

Notc. 'I'trc inforination containcd in this report is historical and not indicative of futurc performancc.

Statements contained in this report concerning hiture performance arc the opinions of manigement and there can be no

guarantec that such opinions will prove to hc corrcct.

F&C Portfolios Fund SICAV - FBC Far East Equity Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares f Assets

SHARES Australia 1Wacquaric Airports 899,745 2, Ii2,038 1.91 Orica 162,357 2.490,142 2.18

Zinifex 15 j3 207 1.481.ni3 1.30

10,162,650 8.91 Bermuda Jartline Stntegic Holdings 45,500 430,104 0.39

Hio 'I'into 84,280 4,018,657 3.52

Cayman Islands China 1nfr;lstructure Machinery Holdings Shui On l a d

Tingyi Holding

392,000 575,795 0.51

890.000 642,552 0.jb 2,271,000 1,415,317 124

China China Communication Scrvices China life Insurance 'H' China Merchants Bank 'H' Industrial & Commercial Bank of China 'H' Shanghai Jin Jiang International Hotels Group 'H' Sgncar Food Holdings

4,472,000 85 3,000 820.500

3,987.000 2,420,000 2,460,000

2,633,664 2.31

2,26~,196 1.90 1,840,156 1.62 1,241,391 1.09 1,674,339 I .47 1,051,0n2 0.92 2,430,754 2 13

Hong Kong (.hcung Kong Holdings China Overseas Land & Investment CNOOC I h h Sing FinanciA Oroup Haitian International I3oldings Hdng Lung Group Hang Lung I'ropcrtics Link Htl7' New World Development Pacific Basin Shipping Pic0 Far Pa+t Holdings Sun Hung h'ai Properties

154,000 3,988.000 1,727,000

168,400 1,150,000

4'~0,000 1,252,000

2 13,000 1,527,515 3,567,000 #,OOX,O00

3 17,500

1,460,293 3.758,649 1,134.243 1 , I O 1,158

485,147 1,30 1,364 2,622,883

383,529 2.595.209 2.29 1.400 1397.393 2,748,872

9.22

1.28 3.30 0.99 0.97 0 42 1.14 2.30 0.34 2.28 2.01 I .23 2.41

India Infosys Technologies AL)R

Subex Azurc GDR 36,700

156,701

2 1,280,140 18.67

1,373292 1.21 I ,438,149 1.31

Indonesia FT Astix Intcrndional

F&C Portfolios Fund SICAV lnterlm Report & Accounts 2007

2,877,44 1 2.52

1,9n4,005 1.74

85

F&C Portfolios Fund SICAV - F&C Far East Equity Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares € Assets

Indonesia (continued) R Bank Mandiri PT Telekomunikdsi Indonesia

7,570,000 2,370,500

1,553,094 1.36 1,916,187 1.68

5.453,286 4.78 Korea 1)aclim Industrial 28.140 2,020,083 1.77 Daewoo Motor Sales 50,590 1,196,748 1 .os Dacwoo Shiplmilding & Marine Engineering 83,560 2,299,471 2.02 C;S Engineering Sr Construction 4 1.870 2,807,996 2.46 GS Holdings 72,050 2,l 17,590 1.86 KCC 6,474 1,467,021 I .29 Kookmin Bank 48,381 3,252.361 2.85 NIIN 15,413 1,694,134 I .48 Sdrnsung Electronics 1,550 695,059 0.61 Samsung Securities 49,739 2,028,376 1.78 SK 40,912 3,010,951 2.64

22,580,791 19.8 1

Malaysia Hong Leong Financial Group 227,200 283,268 0.25 IGB 2,499,900 1,360.561 1.19 1’1’13 Oil Ihlms 295,600 833,239 0.73

2,477,068 2.17 Philippines Ayah 35,820 31 1,590 0.27 Megaworld 24,500,000 1.274.915 1.12

Singapore <:hin3 Energy City Developnirnrs Cityspring Infrastnicture Trust Ezra Holdings Kcppcl ScmhCorp Industries Want Wml Holdings

2 3 26,000 461,000 625,000 249,000 370,000

1,12~>.0 l>0 162.000

1,586.505

1,344,533 3,325,201 460,089 664,307

3,473,211 2,837,164 236,924

1.39

1.18 2.92 0.40 0.58 3.05 2.49 0.21

Taiwan Cornpal Elccrronics (GDR) IJnited Microelectronics AI)K

Wistron

67,951 416,986 334,000

12,341,5 19 10.83

0.19 21 3,620 0.89

370,802 0.33 1,012,276

Thailand Kasi kornhank 279,900

1,605,698 1.41

381,204 0.34

86

F&C Portfolios Fund SICAV - F&C Far East Equity Schedule of Investments as at 31 st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares f Assets

Thailand (continued) MT Expiontion Jz Production Siam Commercial Bank 'I'hanachart (:apitAl

899,500 1.73 1,801 1.52 1,009,300 1,446,603 1.27

544,000 164,086 0.14

WARRANTS Luxembourg Reliance Con~municatioris 25.01.201 I

3,728,694 3.27

226,400 1,638,867 I .44

Netherland Antilles Mcrrill Lynch 26.10.201 1 116,341 100,555 0.09

Taiwan Asustek Computcr 19 .O I .20 17 885,728 1,560,219 1.37 CTCI 9.11.2007 554,086 364,091 0.32 Delta Electronics 24.01.2017 518,000 1,249,736 1.10 1)clta Electronics 7.05.2007 168,351 406, I67 0.36 Fubon Financial Holding 13.03.2007 1,161 .000 779,422 0.68 Fiibon Financial Holding 13.09.2007 377,000 254,194 0.22

Mega Financkil Holding 13.02.2009 2.6$)7,000 1,318.082 1.15 Hon Hai Precision Industry 19.1 1.2007 469.800 2,359,793 2.07

Siliconwarc Precision lndustrics 27.07.2007 409.41 7 571,187 0 . 5 0 Siliconware Precision Industries 30.01.2017 1,620,000 2,260,098 1.98 Taishin Financial Holdings 26.01.201 1 2,005,627 77 1,448 0.68 Zjxel Chnmunications 20.09.2006 464,790 577,347 0.51

12,471,784 10.94

'lotal Invcstmcnts Otlicr Net Assets

'Total Net Assets

1 1 1,892,686 98.15 2,114,027 1.85

114,006,713 100.00

'1-hc aucornpnnying notcs form an integral part of these financial statcmcnts

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 a7

F&C Portfolios Fund SICAV - F&C Far East Equity Distribution of Investments by Economic Sector

Sector % of Net

Assets . ~. ....

Real Estate Banking & Financial Services Building Lk Construction Electric, Electronic Equipment and Engineering Oil & Gas Ttlecon~~nunicatinns Metals Sr Mining Manufacturing Computers Holding Companies-Divcrsc Information Technology Food Transpottation Diversified Holdings Airport Auto Mmufactui-c ts Insurancc Internet Chemicils Misccllancous l:.ncrgy Retail h.IachinerpConstnictionssMitiiii~ Lodging Agricul ture Inwstment Companies Enpinerring & Construction Iliversificd Finan Scrv Fond, Beveragc Lk Consumer Goods

19.51 14.10 6.72 5.43 5.16 5.11 4.82 4.20 3.96 3.32 3.03 2.70 2.59 2.24 1.91 1.74 1.61 1.49 1.29 1.23 1.18 1.05 0.93 0.92 0.73 0.40 0.32 0.25 0.2 1

. . . . - . ..

Total Investments 98. I5 Oilier Nct Asscts I .ti5

Total Net Asscts 100.00

F&C Portfolios Fund SICAV F&C Stewardship International

Performance During the six months to j l s t March 2007 the I share class rose 6.09% (net offees), outperforming the benchmark indcx (MSCI

World TR Index) return of 5.91%.The outperformance was driven by a combination of stock 5ekctioIl and asset allocation.

'I'hc A share ciass was launchcd on 26 October 20(J6 and rose b y 1 7% over thc pcriod from inception to 31st March 2007,

compared to ;1 rise in the benchmark over the same period of 1.66%.

Review Through ti) thc end of February equity markcts continued their strong performance, drivcn higher by continued robust

company profitability and further hcctic merger d acquisition activity.'l'hc cnd of February saw markets experience a sharp

hut short correction in reaction to the combination of weak durahlc goods figtires in the LS, comments from LS Federal

Reserve Chairman Alan Grecnspan that the I'S could face a rccession in 2007 and fcars that thc Chincsc Authorities werc going

to intervcne to curb the pace of growth in Chinese equities

Throughout, our strategy focused on offering investors exposure to the world's stock markets with a vicw to providing capital

growth over thc long term. Portfolio composition reflected our top-down views but was prcdominantly driven by bottom-up

stock selection based on rigorous research and company analysis, with performance driven by strong stock selcction.

In trrms of asset allocation we increased our wcightings towardsJapan,Asia and the L X , where valuations look most attractivc,

and at thc expense of the IIK and European markets Our overweight to emerging markets was also retained with strong

pcrformanre from position3 in China, India and Mexico.The Fund has a longer term average of around 506 in global emerging

markets.

Pcrformancc throughout the period has bccn driven by strong stock sclection, with particular strength from our holdings in

alterndtive enerL7 names, though we took the opportunity to cut exposure to the sector as valiiations began to look very

expensive. In particular w c sold our positions in KEC:, First Solar and MEMC Electronics, whilst trimming back Solarworld,

however this was to some extent offset by our participation in the 11'0 of Chinese solar mannfacturerJA Solar, which rallied

stiungly on listing.

Elsewhere, we trinimed holdings in Deere and Starbucks as they reached the upper end of our price expectations, while high

end I 3 rctailcr Nordstrom was also sold down after a strong recovcry, with the proceeds used to establish a position in

homcwarc retailer Wil1iarns:ionoma. We also estahlished a new position in university provider Laureate. a beneficiary of

ongoing education spcnd, especially in Latin Amcrica, and which was subsequently the subject of a successful hid approach

from its managcment team.

1)iiring Fcbruary we increased the Fund's cash weighting on concerns over the shorter term sustainability of glohal cquity

pcrformance, which provided a boost to relative performance. In March we cautiously started to rcinvcst our cash holdings

into stocks in which we have long-tcrm conviction, such as AH F(JociS,Apple.AccentUre and Countrywide Financial.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 89

F&C Portfolios Fund SICAV F&C Stewardship International (continued)

Outlook

We remain cautiously optiniistic on the outlook for equities given that valuations appcar reasonable on a historical view and in the belief that corporate performance will remain on an upward trend. We feel that inflationary pressures in the US will

moderatc and that thc economy will slow rather than go into reccssion. However, markets will he looking closely at economic

data emerging from the US. Elsewhere, China, the Pacific Basin and Europe look reasonably robust, while in the UK we expect

to see fiinher rate riscs as the Hank of England looks to reign in inflation.

Oiir stixtegy will remain focused on identifving thi)sc! companies dc.monstraring attractive growth prospccts yet to be

recogniscd hy the wider investment coiiiiniinity. Wc will continue to shun those areas/ firms which are felt to harm the world,

its people or its wildlife.

Sophie Horsfall

Portfolios Manager April 2007

Notc- 'rho information contained in this report is historical and not indicative of futurc performance.

Statements contained in this report concerning hitiire performance arc: the opinions of management and there can he no guardnrec that such opinions will prove to hc cw-rcct.

90

FBC Portfolios Fund SICAV - F&C Stewardship International Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares f Assets

SHARES Australia Energy Devcloprncnts

Sonic HedkhCarC Woodside Petroleum

k n d I.cdbC

67,446 196,153 0.44 24,193 289,83 1 0.65

13,390 31'1,284 0.71 (I 2 I 894 557,161 1.25

1,358,429 3.05 Austria 'ltlekoni Austria 37,188 695,787 1.56

Bermuda

Nabors Industrics 22, I90 492,834 1.11 Accentwe 'A' 19,140 552,179 1.24

Brazil Companhia Energetica de Minas Gerais ADR

1 ,O45,O13 2 35

12,260 446,477 1.00

Canada Carinanah Technologies Tim IIortons

98,995 194,096 0.44 8.420 191,382 0.43

Cayman Islands China Sun Biwcheni Technology Group JA Solar Holdings

S85,478 0.87

I , l25,OOO 302,711 0.68 32,900 445,5 13 1 .oo

. .

748,227 1.68 China 'I'ianjm Capital Environmcntal I'rotectmn 'H' 820,( too 241,907 0.55

Denmark William Ilcmant Holding 6,905 458,716 103

Finland 'lietoenator Y11'

12,191 265,764 0.60 13,020 335,916 0.75

France Essilor International Vallourcc

601,680 1.35

3,145 270,470 0.61 2.400 459,792 1.03

Germany Celesio HJ-po Real Estate Holding

5,707 13,100

730,262 1.64

268,457 0.60 625,394 1.41

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 91

F&C Portfolios Fund SICAV - FBC Stewardship International Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares € Assets

Germany (continued) Rhoen-Klinikum 9,216 41 1,126 0.93 SAP 6,036 201,421 0.45 Snlanvorld 5,372 512.274 0 70

Hong Kong Esprit Hnldings

1,818,672 4.09

hh.000 575.81 1 134

India Infvsys Technologies AI111 16,758 630,354 1 4 2

Italy hstwcb 9,400 449.414 1.01

Japan Benessr Ccntrdl Glass EaSt Japan IkAilWAy Fanuc Ke yence Matsushita Electric Industrial Mitsiibishi listate Ricvh Ryohin Keikaku Sewn & I Holdings Sumitorno Elcctric Industries Toyvta Motor l l S S

12,400 66,000

5,400 2,260

24,500 24,000 15,000 7,900 9,100

36,100 14,500 ;,410

7n

343,733 327,771 443,412 368,442 374,075 366,887 567,715 221,541 360,684 206,579 40 1,947 685,066 266.953

0 77 0 74 1 .00 0.83 0.84 0.82 1.28 0.50 0.81 0.46 0.90 1.54 0.60

4,734.H55 1 1 09

Shinsrgae 790 351,810 0.79 Korea

Luxembourg Oriflanic Cosmetics SDR 19,900 574,142 1.29

Mexico Alsea 195,680 271,931 0 61

Netherlands Konin klijkc Wcssanrn 2r3,nw 326,168 0 . 7 3

Norway Statoil 22.254 453.345 1.02

92

F&C Portfolios Fund SICAV - F&C Stewardship International Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Number of Valuation % of Net Security Description Shares € Assets

Philippines Manila Wdter 1,618,000 243,438 0.55

Portugal sonae SGPS 152,761 258,166 0.58

~~

Spain Ebro I'ulcva 23,997 424,027 0 95 Grupo Ferrovial 4,279 324.134 0 73 Inditex 9,874 459,437 103

1,207,598 2 71 Sweden Assa A b l y 'U' 20,080 545.663 0.78 Scruritas '13' 25 ,tOO 287,849 0.65

Switzerland Suntcch Power Holdings Al)H

633,512 1 4 3

8,110 210,l 1 1 0.47

Taiwan Tdiwan Semiconductor Manufdrturing ADR 32,777 263,757 0.59

United Kingdom Associatcd British Foods 54,126 6 8 ~ 6 n 1.55 H G Group 37,i07 407,3 16 0.91

Cairn Energy 'H' 21,865 107,300 0.24 Cilttles 45,573 275,022 0.62 Hammcrson 14.229 363,395 0.82 Infornia 48,564 435,135 0.98

RClJterS GroUp 80,349 551,788 1.24 sS1. Intcmational 72,080 425,15!, 0.95

Cairn Encgy 17,764 407,077 0.91

Northern Rock 39,500 666,512 1.50

Trading Emissions 99,905 182,564 0.41 Wolsele y 33.173 582,240 1.31

5,092,676 I 1.44 United States

Alltel 207,641 0.47 npplc 553,259 1.24 Applicd Materials 434,680 0.98

Automatic Dit:i Pnxxssing 250.372 0.58 Best Buy 491,431 1.10

Community IIralth Svstenis 364,189 0.82

A f l a C 305,772 0.69

Autoliv 38 1,973 0.86

Burlington Northern Sanfa Fe 642.043 1.44

8,680 4,474 7,955

31,697 8,935 7,159

13,475 10,664 13,802

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 93

FBC Portfolios Fund SICAV - F&C Stewardship International Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Number of Valuation % of Net

Shares f Assets

United States (continued) Countrywide Financial Crown Castle International (.WS

DaVita Dean Foods Dell cHay Encrgen Ericgy Conversion Devices Evergreen Solar Frcddic Mac PiielCell Energy Grant Prideco Hain Celestial Group Henry Sclicin Intel Kellogg Laurcatc Ediication Marriott International 'A'

Microsoft Motoroh Ormat 'I'cchnologics PepsiCo PerkinElmc r Qualcornni Scholastic S1.M

Sprint Nextel Starbucks Sunpower 'A'

I-nited Rentals VeriSign Wholc Foods Market WillianisSomona

Total Invcstnients Clthrr Net Absets

Total Net Assets

15,272 14,440 36,545 20,740 8.928

24,600 16,995 9,659 8,640

41,310 4,762

39.730 IO. 100 17,291 1 1,630 27,500 8,852 8,600 7,990

19.000 36.016 7,310 7,010

36,790 15,200 16,800 5,873

18,915 26.618 14,024 33,000 17,085 19,l98 14,900

384,572 347,299 933,937 827,799 312,370 427,402 42 1,726 367,952 225,976 301,499 21 2,060 233,758

S89.206 480,3H3 393,798 340,788 379,626 292,HZ9 396,384 476,385 229,604 3.3.3,525

485,390 39 1,107 179,808 268.455 6 2 4. N 5 5 477,650 679,317 321,263 644,552 395,504

376,s 13

667,006

0.86 0.78 2.10 1.86 0.70 0.96 0.95 0.83 0.51 0.68 0 48 0.52 0.85 0.87 I .08 0.88 0.77

0.85 0.66 0.89 1 .(I7 0.52 0.75 1.50 1 .09 0 88 0.40 0.60 1.40 1.07 1.53 0.72 1.45 0.89

17,860,936 40.13

42.888.672 96 37 1,616,697 3.63

44,505,369 100 00

'I'hc accompanying notcs form a n intcgral part of thcsc financial statcments.

94

F&C Portfolios Fund SICAV - F&C Stewardship International Distribution of Investments by Economic Sector

% of Net Sector Assets

Retail Food, Bwenge & Consumer Goods .Ielccommunications Oil & Gas Banking Sr Financial Services Energy Electric. Electronic Equipment and Enginrcring Medical - Services Medical - Products Computers Software I<eal Estate Transporntion Electrical Component 8; Equipnient Educational Serviccb Auto Manufacturers Comrncrical Scrviccs Medics1 - Instruments Building lk Construction I)istribution/Wholcsdle Cosmetics / Personal Care Consulting Services Waicr Stcrl Electric IJtility EnergyAltcmatc Sourccs Media Semiconductors ECommcrcc/Servicrs Medical - Hospitals I'u hl ish i ng Auto Pwts & Equipment Metals d Mining htdnufacturing Internet Insurancc Hiotcchnology Leisure Sr Tourism Security Services Mcrlical ~ Drugs Information Technology Office/Business Equipment Invcstrncnt Companies

11.51 8.38 6.58 6.58 6.50 4.41 4.03 3.93 3.67

2.76 2.74 2.44 1.79 1.63 1.54 1.53 1.50 I .48 1.34 1.29 1.24 1.09 1.03 1 .00 1.00 0.98 0.98 0.95 0.92

0.86 0.78 0.74 0.72 0.69 0.68 0.66 0.6 0.60 0.58 0.50 0.41

2.80

0.88

'lijtal Invcstmcnts Other Nct Assets

96 37 3.63

'lhtal Net hsscts

F&C Porttolios Fund SlCAV Interim Report &Accounts 2007

100.00

95

F&C Portfolios Fund SICAV F&C GTAA Alpha Fund

Performance The I share class \VIS launched on 26th January 2007 and fell 4.87%~ (net of fees) over the period from inception to 31st March

2007, compared to a rise in the benchmark, :5 month Euribor, of 0.65% over the Same period.

Market Review Despite a positivc start for the portfolio over January and thc bcst part of February, market volatilin and increased risk aversion

took its toll at the end of Fchruary, so that the month ended down.'rhe (rclatively small) net long exposure to equities

detracted from pcrformante, as did the short exposure to bonds. Market selection within bonds was neutral, whilc sclcction

within equities added value, mainly via long exposure in Japan and short cxposure in the Eurozone.

Volatility in financial markets remained high over thc first two weeks of March. with tiiarkcts re-assessing thc potential spill-

over of the sub-prime issues to the rest of the Global econom?' via thc US consumer, and the effects of the potential unwinding

of the Yen c l t r y trade. Equity markets remained under pressure, drifting lower than the February lows, after a very short-lived

recovery. Bond yields movcd sirleways. Portfolio performance was negatively impacted by asset class sclcction, with equity and

fixed income selection bcing roughly ncutral, a w n the highly correlated regional returns over the period.The second half of

the month showcd a marked irriprovcmcnt in markct sentiment, with cquitv markets adwncing and rising ahove iniportant

psychological levcls, o n the back of the &l&A and liquidiv themes re-making headlines, and the focus on fundanrentds

rcturning. Equity positioning at that point, however, did not allow thc portfolio to participate in that short term rccovcry and

rc-gain some lost ground: the short positioning in Euroztlrrc cquitics against the long exposure to L S , UK andJapanese equities

contributed neg:itively to performmcc as European equities enjoyed a particulnrly strong recovery. A long Yen / short Euro

currency position, put in place as a hedge to further equity market weakncss on the hack of the potential unwinding of the

Yen carry ti'arle, detracted from performance further.

Outlook

A long equity hias to the portfolio positioning has been re-est:rblished. Initial concerns over the potential for contagion

eman;iting from the suh-prime area have moderated and the markct fundamentals remain sound. with the economic tuckdrop

developing in a broadly supportive manner and the inflation concerns diminishing. Against this background, equities are cxpcctcd to advancc from currcnt lcvcls, alhcit in a bumpy and volatile fashion. Honds are, in our vicw, fully priced at current

levels, already discounting excessive interest rate easing in the US - as such, we maintain a short exposure.

It has been a highly volatilc market environment for the best part of the first quarter of 2007.The portfolio's Fcaliscd rcturn

has been below target hut is within statistically expected outcomes, given the risk levels that the portfolios is and will be

running.'Ihc portfolio's lcverage allows for small capital participation to dclivcr mcaningful performance at the total balanccd

portfolio level and will inevitably result in high volatility, as outlined i n the fund launch.

Stergios Saloustros Portfolio Manager

A m 2007

Note The information conbaincd in this rcport is historical and not indicative of hiturc performancc.

Statements contained in this report concerning hiture performance are the opinioils of management and there can be no

gudrdntcc that such opinions will prow to hc correct.

96

FBC Portfolios Fund SICAV - F&C GTAA Alpha Fund Schedule of Investments as at 31st March 2007 Transferable securities admitted to an official exchange listing or traded on other regulated markets

Maturity Nominal Valuation % of Net Security Description Rate Date CCY Value $ Assets

BONDS Denmark Fiiiance for Danish Industry 4.06% 15 January 2010 EUR 3,000,000 3,000,528 1.26

France France (Republic of) 5.50% 25April 2007 EUR 1 j,l20,000 13,131,191 5.51

Germany Germany (Republic of) 4.50% 17.4ugust 2007 EUR jO,000,000 j0,052,770 12.61 Germany (Republic of) 6.00% 4 July 2007 EUR 30,000,000 30,144,990 12.65

United Kingdom Southern Gas Network

60,197,760 25.26

3.99% 21 October 2010 EI'R 0,000,000 6.005,lc)O 2.52

United States Bear Strarns 4.15?4 26 September 2013 EUR 6,000,000 5,989,572 2.51 Goldman Sachs 4.0% 4 FCbrUAry 2013 EUR 6,000,000 6,003,846 2.52 Lehman Hrothcrs Holdings 4.08% 5 February 2014 EUli 6,oOo,O00 5,964,600 2.50 Morgan Stanley 4.18% 1 March 2013 EUR 6,000,000 6,003,990 2.52 Merrill Lynch 4.06'XB 9 August 2013 EUR 6,000,000 6.014,130 2.53 SLM 4.22% 17 June 2013 EUR 4,000,000 3,999,728 1.68

33,975,866 14.26 COLLATERALIZED MORTGAGE OBLIGATIONS Italy ItalFinance Securitisation Ve hick

Series 2007-1 'B' 4.06% IdJanuary 2026 EUR 4,100,000 4,100,000 1.72

Ireland Ilcco Scrics 7-EZX 'H' 4 17% 27 January 2018 EUlt 3,954,389 3,948.159 1.66 Titan Europe Series 2007-CT1Y 'B' 4 03% 23 January 2017 EUR 6,300,000 6,300,000 2 64

10,248,159 4.30 Netherlands Windermerr CMBS Series IIM 'D' 4.64% 26 November 2012 EUR 1,816,956 1,816,956 0.76

Spain TDAC Series 4 'B' VCI Series 16 'C'

4.14% 26 June 2039 EIJR 4,000,000 3,984,128 1.67 4.44% 16June 2049 ECR 3,400,000 3,414,110 1.43

7,398,238 3.10 United Kingdom Airc Valley Mortgages Series 2006-1X '202' 4.15% 20 Scptcmbcr 2066 EUR 1,500.000 1,498,202 0.63 Estia Mortgage Finance Scrics 1 'H' 4.06% 27 April 2040 EUR 4,000,000 3,993,296 1.68

Granite Master Issuer Scrics 20063 'C3' 4.2 j%, 20 December 2054 EZJK 4,000,000 4,006,250 1.68 Granite Mortgages Series 2004-2 '2B' 4.17% 2O.Iune 2044 EUR 3,272,110 3,280,637 1.38

Holmcs Financing Serics 7 '4M' 4.55x 15 July 2040 EIJR 2,000,000 2,Ol 1,444 0.84

FBC Portfolios Fund SICAV Interim Report i3 Accounts 2007 97

FBC Portfolios Fund SICAV - FBC GTAA Alpha Fund Schedule of Investments as at 31st March 2007 (continued) Transferable securities admitted to an official exchange listing or traded on other regulated markets

Security Description Maturity Nominal Valuation % of Net

Rate Date CCY Value $ Assets ~ ~~ ~~~ ~~

United Kingdom (continued) Newgate Funding Series 2007-1X 'CB' 4.26% 1 December 2050 ECR 2,800,000 2,800,000 117 Permanent Financing Serws 6 '4C' 6.56% 10 June 2042 liUK 4,000,000 4,022,628 1.69 Southcrn Pacific Securities

Series 2005-3X 'RIA' 4.18% 10 December 2043 EUR 5,000,000 4,993,500 2.10

26,605.957 11.16 United States Landmark Mortgage Securities Series 1 'B' 4. j0X 17 June 2038 ELR 4,600,000 4,588.500 193

ASSET BACKED SECURITIES Italy CrediFarma Finance Serics I 'A 4.25% 31 October 2012 BUR 10,000,000 10.015,000 4.20

Ireland Landsrlowne Mortgage Securities

Series 1 'M2' 4.31% 15 June 2045 ElJR 5,750,000 5,755,050 2.41 Provide Bricks Series 2007- 1 'H' 4.19X 30January 2040 ElJR 4.200,000 4,200,000 1.76

Luxembourg I1.G.A T. Mczzanine Series 1-07 'A '

9,955,05(J 4.17

4.35% 2'2 February 2015 EI!R 5,800,000 5,805,800 2.44

Netherlands

ArI7dn Corporate 1r)ans Series 2006-1X '112' 4.90% 20 Junc 2025 ECR 2,000,00(1 2,015,000 0.85 Arcin Corpowte Loans Series 2006-1X 'C2' 4.50% 20Junc 7025 EUR 2,000,000 2,018,000 0.84

4,033,000 1.69 United States MHNA Credit Card Master NuteTrust

Series 200i-H3 'H3' 4.05X 19 March 2018 EIJR 3,000,000 3,003,300 1-26

'1i)tal Tnvesrnierits Othcr Net Assets

203,~80,495 85.55 34,420,515 14.45

Total Net AsSCts 238,3 10.oio 100.00

The accompanying notcs form an intrgrdl part of thcsc financial statcmcnts.

98

F&C Portfolios Fund SICAV - F&C GTAA Alpha Fund Distribution of Investments by Economic Sector

Sector % of Net

Assets .

Finance & Financial Services 44.80 Sovcrcign 30.72 Banking & Financial Scrvices 7.52 Oil & Gas 2.51

Total Invest~iierits 85.55 Othcr Net Asscts 14.28

Total Net Assets 100.00

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 99

F&C Portfolios Fund SICAV Combined Statement of Net Assets as at 31 st March 2007

F& C F&C F&C F&C US European High European North American

Smallcap Yield Bond Equity Equity Notes $ f E E

ASSETS Investments at market value 2 154,933,399 56.543,073 25,128,131 103,0611 143 Investments at cost 136,258,613 54,1392,256 23,064,01 3 94,575,771

Debtors: Invcstments sold 2 7,789 14,057 Subscriptions receivable 1.964.032 47,229 118,314 4.281,993 Uividcnds and interest 193.664 1,329,900 39,572 93,163 Llirrcalised gain on hitures contracts 12 88.190 I:nrc-alised gain o n forward foreign

Formation cxpcnses Mcrgr cxpenscs

exchange contrdcts 1 1

Balance at bankers: Cash and deposits 7,509,1i4 596.885 790,040 (3,657,308)

Total Assets 164,688,439 58,m,a76 26,090,114 103,798,991

LIABILITIES Creditors: Investmcnts ptrrchased (56,037) (7,804) (8,088) Redemptions pa)able (47,529) (19,020) (34 ,OO?l) Inve~tnicnt management fees 4 (184.514) (51,356) (21,707) (86,612) Printing & Publication (3.724) (1,714) (5.935) (3,s 1 ti) I:nrcalisud loss on Rnvard foreign

Ihrealiscd loss on fiitiires contracts Expenses and taxes (215,852) (102,018) (92.940) (191,341)

exchange contmcts 11 (1 1 ) 12

Total Liabilities (507,456) (1 81,923) (1 62,673) (281,469)

TOTAL NET ASSETS i m , i 80,9a3 50,342,953 25,927,441 103,517,522

Total Ne1 Assets - ClassA Shares outstanding Net asset value per share

Total Nct hsscts ~ Class €3 Shares outstanding Ne1 assel value per shore

'Iota1 Nct Assets - Class C Shares outstanding Net asset value per share

' h a 1 Net Assets - Class 1 Sharcs outstanding Net assc't value prr share

Total Net Assets - Class Cornmenhank Global

Shares outstmding Nct asset \aluc per sharc

lbtal Net Asscts ~ Class X Shares outsranding Kct asset voluc per sharc

T0t;ll Net Assets ~ Class I Euro Sharcs outstanding Net asset value pcr share

Enicrging Markets Bond - Euro (Hedge)

129,436,425 58,342,953 25,927,441 103.517,522 1.422,003 3,899,063 1,359,251 4,369.799

91 .OZ 11.96 19 07 23 69

34,744,559 3,489,994

9.96

The accompanying nutes form an integral part o f tlrrsc financhi hratements.

100

F&C Portfolios Fund SICAV Combined Statement of Net Assets as at 31 st March 2007

F&C F&C F&C F&C Japanese Pacific Global Emerging European

Equity Equity Markets Portfolio Corporate Bond Notes € 6 $ €

ASSETS Investments at market value 2 117,821,176 43.213,766 289,090,959 58,046,550 Investments a t cost 107,270,787 29.212.232 252,368.643 59,583,076

Debtors: Inrcstmcnts sold 2 2,330,485 1,524,236 4,985,707 1,090.765 Subscriptions receivable 1,459,094 317,084 1,809,144 528,651

L!tirealised gain nil futures contrdcts 12 11,200 Dividends and interest 666,367 140,543 421,278 1,230,137

1:nrealise.d gain on forward foreign

Formation cxpcnses Mrrgcr cxpenses 1,462

exchange contiacts 11

Balance at bankers: Cash and deposits 2,274,122 805.624 4,553.756 1 32,199

46,001,313 300,860,844 61,041 ,I 64 Total Assets 124,551,844

LIABILITIES Creditors: ltivestnients purchased (4,801,886) (1,599,802) (1,373,240) (1.298,5?2)

Investment rnanagcmcnt fces 4 (95,660) (42.196) (316,579) (41,991 1

1:nrcaliscd loss on foward foreign

Ilnrenliscd loss on futures contracts

Redemptions payable (1) (255) (9,3 3 3)

Printing & Publication (3,330) (1 ,3W (6,081) (1,?50)

lixpc*nses and taxes (229,256) (94,040) (.477.986) (89.4 19)

exchange contncls 11 12

Total Liabilities (5.1 30,712) (1,737,348) (2,174,141) (1.441,065)

TOTAL NET ASSETS 11 9,421,132 44,263,985 298,686,703 59,600,099

'l'otal Set Asset5 - Class A Shares outstanding Net asset value per share

119,421.1 32 44,263,965 298,686,705 59.600,099 4,192,849 1,077,120 14,120,509 3,290,097

28.48 41.09 21 15 18 11

Total Net ASSctS - Class B Sharcs outstanding Net asset value per share

Iota1 Net Assets - Class C Shires outstanding Net asset viloe per share

Total Net ASSCLS . Class 1 Shirrs outstanding Net asset value per share

Total Net Asset 'i . Class Commei7hank GIOhal Emcrging Markets Bond - Euro (Hcd~c)

Sliarcs outstanding Net asset value per share

Totdl Nclhssets - Class X Shares outstanding Net . . . . l i ~ ~ ~ t value per share

ToLil Net Assets ~ Class I Euro Shares outslanding Net asset value per share

The accompanying notes fornr an integril part of thesc financial statements.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 101

F&C Portfolios Fund SICAV Combined Statement of Net Assets (continued) as at 31 st March 2007

F&C F&C F&C F&C F&C Global Real Global Emerging Euro Inflation

BioPharma Estate Securities Convertible Bond Markets Bond Linked Bond Notes E 6 E $ 6

ASSETS

Investments at cost 8,972,956 80.108,071 1 1 4.967.271 86.605.837 59,635,877

Debtors:

7 Investments at market value I 9,217,460 114.256.455 122,284,052 91,375,644 58,052,307

Invcstiiicnts sold 2 3,316 22.957 704,700 4.028 Subscriptions rcccivahlc - 2,942,655 2,120,i34 535,537 Uividcnds and intcrest 9,207 203,652 752,454 1,315,340 895,028 Lltirralised gain on fiiturcs contracts I!nrt.alised gain o n forward foreign

exchange contracts 11 224.944 Formation cxpcnscs 1.329 Mcrger cxpenscs 1,462

Balance at bankers:

12

Cash and deposits 939,915 (260,777) 4.795.909 698,050 (125,881)

Total Assets 10,171,360 11 7,164,942 130,657,849 94,150,844 58,825,482

LIABILITIES Creditors: lnvrstnients piircliascd (3.326) (397,805) (1,947,038) (XOl.IC7Jj Redemptions pa)abie - (282,477) (8,392) (366,401) Investment manageinrnt fees 4 (11,198) (125,089) (109,247) (89,404) (6,977) Printing & Puhlicition (395) (3,347) (3,748) (2,049) (1,779) Unrcaliscd loss o n forward foreign

IJnrealised loss on futures contracts Expenses and taxes (35,326) (1 98,22 1) (2 15,288) (1 3 4 3 15) (98,148)

cxchangc contrxts 11 12

Total Liabilities (50,245) (1,006,939) (2,283,733) (592,369) (908,067)

TOTAL NET ASSETS 10,121 ,115 116,158,003 126,374,116 93,558,475 57.91 7,415

Total Net Assets . Class A 5harcs outstanding Net asset valiic per sliarr

Total Nct Asscts - Class R Shares outstanding het asset value per share

10.12 1.1 15 116.158.003 128,374,116 51,926.208 620,7111 5,661,932 9,916,600 4,013,180

16 31 20.52 12.9i 12.94

5.6hH.100 410.098

13 82

Iota1 &et Assets - Class C Shares outstanding Ket asset value per share

ToUI Ket ASSCIS . C ~ S S 1 Shares outstanding Net asset value per share

Total Nct Assets - Class Coninierzhank Global

Sharcs outst:inding Net asset ralur per share

Emerging hlarkcts Hond ~ Euro (Hcdgc)

Total Net Assets - Class X Shares o1itst:tndinji Ncl assct raluc pcr sharc

‘I’otal Xt‘t Assrls . Cklss I Euro Shares ourstanding &et asset value per share

Thc accompanying notes f r m i an intewal part o f these financial siatrmrnls.

57,Yli,415

9.65 6,003.0 19

26.927.282 249.833

107.78

102

F&C Portfolios Fund SICAV Corn bined Statement of Net Assets (continued) as at 31 st March 2007

F&C F&C F&C F&C European Far East Stewardship GTAA Smallcap Equity International Alpha Fund Combined

Notes € E € € f

ASSETS Investments at market value 2 102,199,795 11 1,892,686 42,888,672 203.880.495 1,569,264,264 Investments at cost 78,765,066 lO.i,150,0~4 41,474,752 204,015,240 1,416,227,428

Debtors: Invrstnients sold 2 1,145,544 2.556.125 332,586 13,468.944 Subscriptions receivable 879.985 1,958.100 87,232 11,270,000 29,236,397

I nrcalised gain on futures contracts 12 77,21 i Ilnraliscd gain trn forward foreign

Ilividends and interest 197,598 246,lO I 79,651 3,449,890 10.778.193

cxchangc: contracts I 1 168,384

klcrgcr cxpcnscs 2,924 hirmalion cxpcnses 64.435 65,430

Balance at bankers: Cash and dcposits 3,434,327 3,501,881 1,701.449 20,787,613 45,288,930

~~~

Total Assets 107,857,249 1 20,154,893 45,089,590 239,452.433 1,668,350,681

LIABILITIES Creditors: Investments purchased (3,231,430) (6,074,606) (-474,085) - (21,715,723) Redemptions payahlc (100,003) . (12,934) (776,056) Tnvestrncnt manigemrnt fees 4 (109.578) ( I 1.029) (33,9(ii) (213,186) (1.401.809) Printing Sr Puhlication (3,337) (583) (832) (522) (41.771)

exchange contracts 11 (11) Lnrcalised loss on futiires contracts 12 - (85'1.455) (879,455)

IJnrcdliscd loss on forward forcign

lixpcnses and taxes (283,497) (61,962) (62,409) (69,260) (2,443,1761 -. .

Total Liabilities (3,727,845) (6,148,180) (584,221) (1,142,423) (27,237,601)

TOTAL NET ASSETS 104.1 29,404 11 4,006.71 3 44,505.369 238,310,010 1,641,113,080 .... . .

Total Net Assets - Class A Shares outstanding Nct asset \.slue per share

Total Kct Asscts - Class R Shams outstanding Nct asset value per slyare

Ibtal Net Assets - Class C Shares outstanding Net asset value pcr share

'Ibtal Nct ASSCtS . Class 1 Sharcs outstanding Net asset value per share

Total Nct hsers - Class ~olllnlerzhank Global

Shares outstanding Nct asset ralur per share

lblal Net Assets - Class X Shares outstanding

Emrrging Markets Bond - Euro (Hedge)

asset Value per ShdW

Total Net Asscts . Class 1 Eun) Shares outstanding Net asset value per share

104.129.4O4

19.10 5,450,454

7,886,148 778,315

10.13

30,520,648 36,619,221 2,207,799 3,487,804

13.28 10.50

83,486,065 6,282, in1

13.29

238,3 10,010 2,5 04,983

95.13

Thc aL-cornpanying nntes form an integral pirl of these financial statenicnts

F&C Porffolios Fund SICAV Interim Report & Accounts 2007 103

F&C Portfolios Fund SICAV Combined Statement of Operations and Changes in Net Assets for the period ended 31 st March 2007

F&C F&C F&C F&C US European High European North American

SmallCap Yield Bond Equity Equity Notes $ f € E

INCOME Ihvidends (net of withholding tax) 2 887,475 21 85, I98 707,413

Securities lending income rcsult 16 135.225 6,558 14,751 141,136

1,133.706 2.090,427 105,627 860,709

Ititrrcst 2 1 Il.006 2 ,onj ,n6n 5,678 12,160

EXPENDITURE Iiivestiiient Management fcc 4 Custodian and administrdtion f w s "'l'axe d'ahonnement" H Directors' fees 5 Amortisation of formation expcnscs 7 UCI'I'S I11 Management Co. fees 6 Sundry expenses

874,785 288,992 114,309 528,070 64,456 44,296 53,660 54,036 36,664 14.720 6,174 25,623

2,324 1,840 1.724 1,840

40,702 19,491 12.602 31,187 80,444 75,800 13,876 75,320

Total operating expenses

Nct profit/(lossj from opcrations Net realised profit/(lossj

on sale of invesrineiirs Net reilised profit/(loss)

on foreign exchange and forward foreign exchange contracts

Net realised profit/(loss) On fUtUrCS COntI'dCtS

1,108,375 445,139 202,345 7 16,976

25,731 1,645,288 (967 1 8) 143,733

(327,956) 636,899 2,325,655 5,206,092

77 96,392 (9,751) (76,491)

(127,687)

Nct realiscd profit/(loss)

Net change in iinrealised for the yedr

appreciation/(depreci;ltion) on investments

Vct changc in unrcaliscd apprcciation/(dcprcclation j on foreign currencies

Nrt changc in unrcalised appreciatioii/(depre~~ationj on forward foreign exchange contracis

Net change in iinrcaliscd pprecidtion/(deprcciation) on futures contmcts

(430,2351 2.378,579 2,2 19.186 5,273,334

8,183,64(3 43,c)lR 372,252 (3,414,050)

( 1,660) 1,052 ( 16,772)

(40,285)

78,4150

7,832,364 2.380,552 2,592,490 i,n42,5 I 2 'I'otal net ~nvcstmcnt Income

Siibscriptions of shares Redemptions of shares Dividends paid from income l i

44,604,15 1 6,624,025 4.123.773 8,279,287 (13,296,918) (2,289,924) (1,017,609) (15,057,702)

(3,444,121) (203,142) (743,619)

'1hVdl finance costs 31,3o7,233 883,980 2,903,022 (7,522,034)

Ntt asscts at thc beginning of thc ycxr 125,041,386 55,072.421 20,431,929 109,197,044 Cuurcncy translation adjustment

Nct assets at thc end of ihc ycar 164,180,983 58.342,95.7 25,927,441 103,517,522

'The accompanying notcs form an integral part of thcsc financial statcmcnts.

104

F8.C Portfolios Fund SICAV Combined Statement of Operations and Changes in Net Assets (continued) for the Deriod ended 31 st March 2007

F&C F&C F&C F&C Japanese Pacific Global Emerging European

Equity Equity Markets Portfolio Corporate Bond Notes 6 f $ €

Income Dividends (net of withholding tax) 2 769,817 535,621 1,644,007 179 Intercst 2 275 3,528 82,024 1.425,293 Sccurities lending incomc result 16 7,856 2,519 19,821

541,668 1,745,852 1,425,472 777,948

EXPENDITURE Investment Managcmcnt fee 4 Custodian and adrninistntion Fees "'l'axe d'abonnement" H Directors' fees 5 Amortisation of formition expenses 7 K I T S 111 ~Managenient (Io. fees 6 Sundry expenses

597,319 263,661 1,403,964 236,105

30,087 10,807 72,227 15,O I6

335 33,ni I 15,507 60.408 19,798 82,817 27,556 117.533 96,868

98,193 49,224 241,632 19,268

1,810 1,810 2,324 I ,840

Total operating expenses 844.037 368,563 1,988,088 389,230

Nrt profit/(loss) from operations (66.089) 173, IO5 (242,236) 1,036,242 Net rcaliseci profit/(loss)

Net realised profit/Oocs) on sale of investinents 1,723.801 2,397,567 22,899,112 (305,261)

on foreign exchange and forward foreign cxchange contmcts (184,:06) (39,916) (98,453) (16)

o n fittiircs contracts 11,752 Net realiscd profit/(loss)

Net realised profit/(luss)

Net change in unrealised for the year

ai'precbtion/(depre~i~~ion) on investments

Net change in unrcalised ai'prcciatiotl/(dcpre~i~tion) on foreign currencies

Net rhangc in unrealised appreci.ltion/(deprcciation) on fonvard foreign exchange contracts

Net change in unrealised

1,468,004 2.530,756 22,558,423 742,917

(696,341) 6,171,007 13,628,067 (355,576)

(20,7381 4,112 26,508 IS

apprc.ciation/(deprcciatlon) on futurcs contracts 16,600

Total net investment income 7 5 0,9 2 7 8,705,875 36,2 12.908 403,056

Subscriptions of shares 26,240,813 1,910,536 101,093.474 4,124,343

Dividends paid from income 15 (712,354) (1,578,641) ('2,110,672) Redemptions of shares (29,196,773) (6,316,566) (26,908,102) (586,080)

'Lhtal finance costs (3.255.960) (5,118,184) 72,606,731 1,427,582

Net asst'ts at the beginning of thc yc:4r 121.926.165 43,676,274 189,866,974 57,768,561 Currency traiislation adjustment

Net assets at thc cnd of the ycar 119,421,132 44,263,965 298,686,703 5'1,600,099

Thc accompanying notes form an intcgrdl part of thcsc financial smcinents

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 105

F&C Portfolios Fund SICAV Combined Statement of Operations and Changes in Net Assets (continued) for the period ended 31 st March 2007

F&C F&C F&C F&C FBC Giobai Real Global Emerging Euro Inflation

BioPharma Estate Securities Ccnvertible Bond Markets Bond Linked Bond Notes € E 6 $ €

INCOME Dividends (net of svithholding tm) 2 57,276 1,468,345 93,558 46 Interest 2 10,429 - 901,581 2.958,875 655,344 Securities lending income result 16 9,078 174,424 8,735 8,393

655,390 76,785 1,642,769 1,003,874 2,967,268

EXPENDITURE Investment Management fee 4 65,189 756,082 645,995 463,267 43,922 Custodian and administration fccs 23,404 74,504 63,020 55,162 33,388 "'l'axc d'ahonnemcnt" H 2,549 29,493 32,749 15,926 2,Y I2 Directors' fees 5 1,724 1,840 1,840 2,184 1,840 Atnortisation of formation expenses 7 335 166 UCITS I11 Management Co. fees 6 12,602 34,277 35,922 27,177 19,600 Sundry expenses 7,272 58,792 88,785 76,862 40,293

'Ihtal operating expenses 113,075 954,988 868,311 658,744 141,955

Net protit/(loss) from operations (36.292) 687,781 135,563 2,728,524 5 13,435 Net realised profit/(lossj

Net realised profit/(loss) o n sale o f invcstttients 55,397 6,540,637 4,855,847 81 2,61 3 (336,100>

on foreign exchange and forward foreign exchange contrdcts (682) (8,947) (66,157) 829,627 15

Net realised profit/(loss) on futures contracts

Nct realisell profit/(loss)

Net change in unredliserl for the year

appreciation/(depre~iation) on inrcstnicnts

Nct change in unrcaliscd app~ciatiorl/(deprrciation) on foreign currencies

Net change in unreallsed appreciatiotl/(depre~i~ition) on toward foreign exchange contracts

Net change in unrealised apl"eciation/(deprcciation) (in futures contracts

18,423 7,219,476 4,925,253 3,970,764 177,350

(402,331) 6,510,472 699,942 1,997,368 (1,244,025)

( 140) 3,825 (4,800) 2,636 (7)

(17) 266,353

Total net investment income ( 3 8 4 . 0 4 ~ 13,733,773 5,620,378 6,237,121 ( i , o ~ m 2 j

Subscriptions of shares - 15,965,600 18,224,212 22,164,648 1,381,744 Redcrnptions of shares - (26,995,268) (21,098,257) (3,394,521) (9,660) 1)ividcnds paid from income 15 - (1,511,734) (308,920) (3308,684) (2,204,159)

'lhtal finance costs - (12,541,402j (3,182,965) 14.~61,443 (832,075)

Net :issets :it the beginning of the year 10.505,163 114,965,632 125,936,703 72,459,511 I 59,816,172 Currency translation adjustment

Net assets at the end of the year 10,12 1,115 116,158,003 128,374,116 93,558,475 57 ,9174 5

The accompanying notes form an integral part of thcsc financial statcmcnts.

106

FBC Portfolios Fund SICAV Combined Statement of Operations and Changes in Net Assets (continued) for the period ended 31 st March 2007

F&C F&C F&C F&C European Far East Stewardship GTAA Smalicap Equity International Alpha Fund Combined

Notes € f € f €

INCOME Dividends (net of withholding tax) 2 326.725 356,371 198,276 5 6,493,814

2 23,320 10,750 17,069 1 ,547,081 8,855,764 Interest Sccuritics lcnding income rcsult 16 31,103 10,117 528,601

EXPENDITURE Investment ,Manajiement fee Custodian and administntion fccs "'laxe d'ahonnement" 1)ircctors' fees Amortisation of formation expenses UCITS 111 Management Co. fees Sundry rxpenscs

381,148

4 710,040 125,528

H 28,456 5 I ,840 7 6 32,793

78,060

367,121 225,462

57,911. 165,426 51,137 43,724

j . j i 6 3,595 1,584 1,608

14,745 14,827 13,463 21,164

1,347,086

382,853 16,556 5,895

522 1,333

7,423

15,878,179

6,975,805 997,558 304,865

28,776 2,127

393,190 899.959

Total oprrdting expenses 974,717 122.196 250,344 414,382 9,602,280

Net profit/(loss) from operations (595,569) 244,925 (24,882) 952,704 6,275,899 Net reiliseci profit/(loss)

on sale of invc\tmcnts 16,084,883 670,069 1.000.484 (1,875) 58,358,226 Net realised profit/(loss)

on foreign exchange and forward foreign exchange contracts (34,872) (125,135) (16,267) (7,383) 68,474

Net realised profit/(loss] on futures contracts - (1 1,744,387) (11&2X,OlU)

Net realiscrl profit/(loss)

Net change in unrealised for the year

apprrciation/(depreci~tion) on investments

Net changc i n unrcalisctl appri~ciation/(dcpreciation) on foreign currcncics

Set change in unrc:tlised appreciation/(dcprrciation) on forward foreign exchange contrdcts

Net changc in unrealised appreciation/(depr~ciatic,n) o n futures contracts

15,456,442 789,859 959,335 (10,820,943) 52,874,581

5,781,622 5,644344 043,303 (134,744) 3 7 . 7 ~ 7 ~

720 (3,247) (222) 45,152 23.106

159,079

- (859,455) (783,756)

Total net investment income 21,238,784 6,425,456 1,902,416 (1 1,769,900) 90,015,808

Subscriptiom of shares 3,254.860 m,402,9ni 1 0 , 0 3 0 , 6 ~ 1~0,080,ooo 570,297,628 Redemption\ of shares (31,674.079) (50,300) (1,392.088) - ( 1 69,070,080) Dividcndr paid from itic~riie IS (420.294) ( I 38,936) - ( 1 5,456,402)

'total financc costs (28,859,513) 88,215,745 14,638,547 250,080,000 JH5,771,146

Net nssets ;it the beginning of thc year 1 1 1.730,133 19,367,512 27,964,406 - 1,165,326,130 Currrncy translation adjustnient (4)

Net assets at the end of the year

'I'hc accompanying notcs form an integral part of these financial statcmcnts.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 107

F&C Portfolios Fund SICAV Notes to the Financial Statements as at 31 st March 2007

1. F&C PORTFOLIOS FUND, (THE 'FUND') The Fund is a "SociclC d'hvestissement B Capital Variable" and is qualified as a 1.uxembourg iiivcstment company. IJndcr the

kaws o f the Grand Duchy of Luxembourg, the Company is registcrcd as an undertaking for collective investment pursuant to

part I of the law of 20th 1)ecemher 2002.The Board of United Kingdom HM Revcnue & Customs has certified the Fund a5 a distributing fund in rcspcct o f the accounting year ended 50th Scptcmbcr 2005, and thc Manager expects the Fund to he s o

certified for year end 30th September 2006.

KBS (1,uxcmhourg) S.A. has been tlesignated by the Directors of the Fund as management company, effective 1st January 2006

The Management Company was incorpordtcd as a "socikti anon)rme" undcr the laws of the Grand Duchy of Luxembourg on

10th November 2004 and its articles were published in the Memorial on 6th December 2004.nie Managenimt Company is

approved ;is management company regulated by chapter 13 of the law of 20th December 2002 relating to undertakings for

collcctive investment. The Management Company is a member of the K o y a l Bank of Scotland Group ("RBS Group"), which

provides services to the IJK collective investment schemes market, principally in the role of trustee to units trusts.

As at 31st March 2007, the Fund consisted of the following Portfolios:

F&C I:$ SniallCap, expressed in USD, offering ClassA :mri Class C (launch date: 31srJanuary 2007) Shares.

FSrC European High Yield Bond, expressed in EG'R, offering Class A Shares.

FWC European Equity, expressed in EI!R, offering Class A Sharcs.

F&C: North American Equity, expressed in ELK, offering Class A Shares.

F6;C Japancsc Equity, expressed in EUR, offering Class A Shares.

F&C Ricific Equity, expressed in Eljlt , offering Chss A Shares.

FSrC Global Emerging Markets Portfolio, expressed in KSD, offering Class A Shares.

F&(: European Corporate Bond, cxprcsscd in EI.'R, offering Class A Shares.

F&C Hiol'hdrma, expressed in EUR. offering Class A Shares.

FB;C Global Itcal Estate Securities, expressed in H J R , offering Class .4 Sharcs. F&C Glohnl Convertible Bond, exprcsscd in EVR, offering Class A Shares.

FSEC Emerging Markets Bond, expressed in USD, offering Class -4, Chss B and Class Conlmerzbank Global Emerging

Markets Bond - EIJKO (Hcdge) Shares. F&C Euro Inflation Linkccl Hond, expressed in EUR, offcring Chss I Shares.

F&C European SmallCap, expressed in EIIR, offering Class A Shares.

FWC Far I h t Equity, expressed in EUR, offering Class I and Class X (launch date: 8th Maroh 2007).

FSrC Stewardship Intcmational, expressed in EUR. offering Class A (launch date: 26th October 2006) and Class I Shares.

F b C G'IAA Alpha Fund (launch daw: 26th January 2007, exptvsscd in E l X , offering Class I Euro Shxres.

2. SIGNIFICANT ACCOUNTING POLICIES Presentation of financial statements The financial btatcmcnts haw been presented in accordance with thc reporting requirements of thc 1,uxcmbourg supervisory

authoritic-s and 1.uxemhoug generally acteptcd accounting principles ("GAAP").

Combined accounts The combined financial statements h a w been presented in Euros. the functional currency of the Fund. Financial Statements

stated in currcncies other than Euro havc bccn combined at cxchangc rates ruling at 31st March 2007 (Euro 1:$1.3351)). For

thc purpose of the combined financial statements. the investments arc wlued on the basis of the closing prices as of j l s t

March 2007.

108

F&C Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

Investments

As pct the prospectus and for thc purpose of determining the Net Asset Value used for subscriptions and redemptions, the

quoted investments and those tixdetl in other regulated markets are valued on the bdsis of the last available price at 31st March

2007. However, with effect 1st August 2002, the basis of the NAV calculation was changed from Offer pricing to Mid pricing

on F&C European High Yield Bond, F&C European Corporate Bond, F&C Global Convertible Bond and F&C Emerging Markets Hond.

Securities which are not quoted or dealt in on an offchl or another regulated markct. securities which are so quoted or dealt

in hut in which the last sale price is not available, ;mrl securities for which the last sale price is not representative of the fair

market value, thc value of such securities will be determined based on the reasonably foreseeable sales price determined

prudently and in good faith, upon the advice of the Investment Manager. by the Ilirectors.

I'urchase and sales of invcstments are recognised on thc trade date. Gains or losses on sales of investments are computed on the avcngc cost hasis.

Investment income

Dividends are credited to income, net of irrecoverable withholding tax, on the datc upon which the rclcvant securities are

declared 'ex-dividend'. Interest income, net of irrecovcnble withholding tax is accrued on a daily basis and includes thc

amortisation of preniiums and discounts.

Translation of foreign currencies Assets and liabilities denominated in currencies othcr than the Portfolios' reporting currencies have heen translated at the

rates of exchange ruling at 31st March 2007. Cost of investments, income and cxpcnditure denominatcd in currencies othcr

than the Portfolios' reporting cirrrency have heen tr~nslatcd at the exchange rates riiling on the day of transaction. The cxchange gain or loss arising frorii the translation of thcsc items is taken into account in the determination of the results of

operations.

Futures contracts on securities and indices Initial margin dcposits are made upon entering into futures contracts and can hc niadc either in cash or sccurities. During the

year the futures contract is opcn, changes in thc valuc of the contract arc rccognised as unrealiscd gains or losses by "marking-

tcrmarkct" on a daily basis to rcflect the market valuc of thc cmitmct at the end o f cach day's trading.Vatiation margin

payments are mark or rcceivcd, dcpending upon whether unrcaliscd losses or gains arc incurred. Whcn the contract is closed,

thc C:ompariy records ;r rcxlised gain or loss cqual to the difference hetwccn thc procecds from (or cost of) thc closing transaction and the Company's basis in the contract.

Forward foreign exchange contracts 'l'lic unrealised gain or loss on opcn forward foreign exchange contracts is ralculated as the difference between the contracted

rate and the rate to close out the contract. Realised profit or loss includes net gains or losses on forward foreign exchange

contracts which have been settled or offsct by other contracts with thc same counterparn.

3. EQUALISATION The Fund follows the accounting practice known as 'equalisation' by which a portion of the issuc and redemption pricc

rcpresenting, on a per share basis, accrued distributable investment income (excluding capital gains or lasscs), is credited or charged to distribrrtablc incomr.The xmounts attributahlc to this inronir equalisation account are included in the proceeds

from subscriptions to fund sharcs and payment Cor fund sharcs rcdccmcd

FBC Portfolios Fund SICAV Interim Report & Accounts 2007 109

FBC Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

4. INVESTMENT MANAGEMENT FEE

The Fund entered into an agrecmcnt with RHS (Iuxemboiirg) S.A. and F&C fiinagcmcnt Limited (‘FCM”) appointing FCM to

act ;is investment adviser to the Fund for a monthly fee calciilated on the average of the net asset value of each suh-funtl during

the preceding month at the following rates:

Portfolios Investment Management Fee

rates per annum

F&C I:S Smallcap - C:lassA

FBC US SmiillCap - Class C

F&C European HighYicltl Hond ~ Class,\

FSrC European Equity - Class A

F&C North American Equity ~ Class A

F&C Japanese Equity - Class A

F&C Pacific Equity - Class A

F&C Glohal Emcrging Markcts Portfolio ~ Class A

F&C European Corporate Bond - CIass A

F%C BioPharma - Class A

F&C Crlohal Real Esnte Securities - Class A

F&C Global Convcrtihle Bond - C h S A

FSiC Emerging Markets Ikmd - Class A

F&C Emerging Markets Bond - Class B F&C Emerging Markets Bond - Class Commcrzbank

Global Emerging Markets Bond - EURO (Hedge)

F&C Euro Inflation Linked Bond - Class I F&C European SmallCap - Class A

F&C Far PASt Equity - Cbss I F&C Far East Equity - Class X

F&C Stewardship Interiiational - Class I

FkC Stewardship International - Class A

F&C GTAA Alpha Fund - Class I ( E M )

1.25 {AB

1.50 96

1.00 %

1.00 o/.

1 .oo ‘X,

1 .OO ?4

1.25 X

1.25 ‘%

0.80 96 1.25 %

1.25 %>

1 .oo %

1 .00 u/o

2.50 %

1.00 x 0.15 %

1.25 %I

0.50 1%

1.50 x 0.75 ‘%

1.50 ‘>A

1 .OO%

FCM is a company incorpordtcd in England and regulatcd hy the Financial Scrviccs Authority (FSA).

5. DIRECTORS’ FEES Dircctors’ fees arc suhject to the approval of Shareholders a1 the next Annual (icneral Meeting Those mcmhers of the Board

who are employees of thc F&C Asset Managment Group, the ultimate parent o f the Investnwnt Manager, waive their fees.

6. MANAGEMENT COMPANY FEE ‘L’hc Fund pays to the Management Company an annual Management Company fce payable out of thc assets of the Fund of up

to a 15% of the net asset value (on a sliding scalc dependant on the size of the size of the SubFund),subject to a minimum of

ECR 25.000 pcr Sub-Fund, pcr annum.

7. FORMATION EXPENSES ‘Ihe formation expenscs of the Fund and each Sub-Fund have kccn or arr hcinfi aniortiscd over a five ycar pcriod.

110

FBC Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

8. TAXATION 1:ndcr current Luxembourg legislation, no Luxembourg tax on thc Fund's income or capital gains is prcscntly payable

~ Howcvcr, the Company is subject to an annilal 'taxe d'ahonnement' (subscription ILK) of 0.05% per annum, based on its total

net assets at the cnd of each calendar quarter, except for F&C Euro Inflation Linked Bond - Class I, F&C Far East Equity - Class

I, F&C Stewardship 1nternation;il - Class I and F&C GTAAAlpha Fund Class I (EUR) for which the fate is 0.01% per annum.

Dividend and intcrcst income received by the Company may be subject to non-recoverable withholding taxes in countries of

origin. 1)ividend and interest income are recognisetl in thc combined sratemcnt of operations and changes in nct assets on a net basis.

Gains rcaliscd upon disposal of securities hcld in certain counlrics by a Portfolio are subject to capital gains tax, payable prior

to repartition of sale proceeds.The tax is computed on net realised gains. In addition, the Portfolio accrues a deferred tzx

liability for net unrealised gain on such securitics.

As from 1st April 2007 investment vehicles listed in article 44, 1, d) of the Luxembourg VAT law (SICXVs, SICAFs and

management companies of FCPs) should be registered as taxable persons for VAT purposes. As taxahle persons for VAT

purposes these investment vehicles must comply with the sraidard obligations foreseen in the Iaxembourg VAT law such as

VAT rrgihtrdtion,VA'l' compliancc and payment of thc VAT duc on scrviccs subject to rcvcrsc charge.

9. RELATED PARTY TRANSACTIONS

F&C Management Limited may he entitled to il placing and/or introductory fee of not niore than 5%) of the subscription value of thc Company shares. OUL of this fcc, stockbrokers or other approved introducing agents may bc paid a proportion Hrown

Brothers Harriniin (Luxembourg) S.C.A. is entitled to receive fees in accortiance with normal banking practice in Luxembourg

for acting as Custodian, Registrar,Transfer. I)omiciliary, Corpomte, Paying and Administrative Agent.

Mr.AAntonioThomas, was an employee of F&C Asset Management plc, parent company of the Investment Managcr up to 18th

September 2006. Mf.?'hornas is now Managing Ilirector of HRS Fund Services (Ireland) Limitcd and an employee of RBS FSl.

Mr Nick Criticos. Hcad of Retail and InvestmentTrusts, F&:CAsset Managcmcnt plc, parent company of the Invcstmcnt Manager

is a Director of the Company.

Mr. Jacques Elvinger. Dircctor of the Company, is a Partner in Elvinger, Hoss 8: Prusscn, legal advisors to the Company in

Luxemhoug.Al1 payments to Elvinger, Hoss & Prussen are for actual senices provided.

Mr.AntSre Elvinger, a Director of the Company, resigned on 28th November 2006.

Mr, Scott Stevens was ctroptcd hy the Directors on 29th November 2006. Mr. Scott Stevens is an employee of F&C Asset

Management plc, parent company of the investment Manager.

10. STATEMENT OF CHANGES IN INVESTMENT

A list, specifymg for each investment the total purchases and sales which occurrcd during thc year under review, may be

ohtamed. upon requcbt, at the registered office of the Company and the Company's Registr~r/Administrdtive Agent.

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 111

FBC Portfolios Fund SICAV Notes to the Financial Statements (continued) I

1 as at 31st March 2007

11. FORWARD FOREIGN EXCHANGE CONTRACTS

As at 31st March 2007, the Fund had the following outstanding fonvard foreign exchange contracts:

FSrC Europcan HighYield Bond

Value IJnrealised

Buy Settlement 31.03.2007 Gain/(Luss) nlly EUR llatc ElJR I:SD

L3D 540,000 402,860 29.06.2007 402,850 (1 1)

FSrC Emerging Markets Bond

Valuc llnrcaliscd

Buy Settlement 3 I ,03 2007 Gain/(loss)

Sd!C EUR Date EIJH I313

I,'SL) 35,492,lc)5 26,719,009 26.04.2007 26,550,587 224,944

12. FUTURES CONTRACTS

As at 3 1st March 2007. the Fund had the following outst;mding futures contracts:

F&C I 3 SrnallCap

Huy Number of contrncts

Unrealiscd

Gain/lnss

IJSD

Russel 2000 Mini Futures Chicago Mercantile Exchange 58 JIlll-o7 88,190

F&C European hrpOi-dtC Hond tjnrealisrd

Salc Number of Gai n/l hss contracts EITR

Euro-Bund Future Eurex Deutschlilnd -10 Jun-Of 11,200

112

FBC Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

12. FUTURES CONTRACTS (continued) F&C GTAA Alpha Fund

HU)'

Knrealised

Number of Settlement Gain/Loss contracts Date EI!R

Swiss Market Index Futuw 28 1 Jun-07 ')(i,833

Amsterdam Index Futurc 120 Apr-07 (99.(i00)

Hang Scng Index Future 125 Apr-07 120,03 1

Dow Jones Euro SI'OXX 50 560 Jun-07 (56,000)

FI'SE 100 Index Future 168 Jun-07 180,701

lbpix Index Futures 417 Jun-07 1,17II111

MSCI SING Index Ets 300 Apr-07 83,039

MCSI Taiwan Indcx sjo Apr-07 (1 06,570)

S&P 500 Future 94 Jun-07 250,686

NASDAQ 100 Future 200 JunO7 (1 5 , 0 2 9

1,625,205

Number of

contracts

SPI 200 Future*

CAC40 10 Euro Future

EC'ROHI !ND Firtiire

SW/hlIB Index Future

IREX 35 Index Futurc

I:S 1OYR NOTE Future

US LONG BONIXCBT)

FI'SE/JSJSF'I'OP 40

Gain/I,oss

EUR

-1 5 0 -200

-200 -140

-80

-400

-150

-371

Jiin-07

Apr-07

Jun-07

Jun47 Apr-07

J un-07

Jun-01

JiJn-07

(348,398)

(13,975) 94,000

(1,469,878)

(754,444)

206,588

211.283

(410,037)

(2 ,484 ,660)

Total (859,455)

F&C Portfolios Fund SICAV lrterim Report & Accounts 2007 113

F&C Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

13. PERFORMANCE FEE The Investment Manager may, in addition to the management fee, be entitled to a perforniance fee for FSrC BioPharma, FSrC

Emerging Markets Bond, F&C Euro Inflation Linked Bond and F&C GTAA Alpha Fund (the "RelWAnt Portfolios").

The annual performance fee will be payable annually on the last business day of tlie accounting period, if the percentage

change of the net asset valuc per share over the previous 12 month period (after adding back any accrual for the performance

fee) exceeds the percentage cl~mge of the "Benchmark" of the relevant Portfolio (as defined in the appendix of the Prospectus

for each Portfolio) over the same 12 month period.

No pcrforrnance fee will be payable if the percentage change of thc net asset value calculated at the end of such a 12 month

pcriod is cq~ral to o r less than the percentage change of the Benchmark over the same 12 month period.

The perforniance fee, if any- will aniount to 20%, of the outperforniance of the Benchmark and will accrue daily

Such performance fee accrual will crystallise and be payable to the Investment Manager:

(i) upon redemption of shares during the accounting period; and

(ii) annually at the end of tlie rclcvant accounting period. by reference to the net asset value per share.

'I'hc annual performance fcc for FSrC: Portfolios GTMhlpha Fund Share Class I will bc calculatcd on a Share-1)). Share hasis so that each Share is charged n performance fee which equates preciwly with that Share's perfornrmce.?'lie perfornrance fee i n

respect of each Share will be calculated in respect of each period of twelve months ending on 31 December in each year. For

each calculation period. the performance fee in respect of each share will be equal to 20 per cent of the appreciation in the

Net Asscl Valuc pcr share during the calculation period above the Hurdle Rate (EIJRIBOR 3 months).Tlie performance fee will he deemed to accrue at each valuation day of the Fund.

N o performancc fce was due or paydbk in rcspcct of the Rclcvant l'ortfolios for the ).car undcr review.

14. USE OF DEALING COMMISSION With cffcct from 1st January 2006, the IJK Financial Scrviccs Authority ("FSA") introduced n c a rulcs in the interests of greatcr

tnnsparency which.

(d) restrict the use of dcaling commission to cxccution and rcscarch serviccs; (h) impose new disclosurc rcyuircmcnts relating to how cornmission payments have been spcnt and what services have been

acquired with them;

(c) cmhcddcd inccntivcs in the commercial relationship bctwecn investment managcrs and hrokcrs to securc value for clients

for txccution and rcscarch spend; and

(d) promote compctition betwcen those who producc invcstment rcscarch by removing thc regulatory distinction hctwecn

research services providcd by hrokcrs along with cxccution ("bundlcd services") and rcscarch provided b y third parties.

llndcr thc ncw rulcs the process known as "softing", whercby brokers uncicrtakc to pay for ccrtain scrvices in return for

guaranteed levels of business, has ceased.

Servlccs may bc paid for from commission but only if they are integral to either the execution of trades or to researc-h.These :ire known as"permittcd scrviccs".hccordin~~, any arrmgements that Company's Investment Manager or any of its connected persons had in phce for "softinp" wcrc not n-ncwed after the cmd of 2005 and in accordance with the trmsition period for

the nin-off of existing contmcts. :ill "softing" activities cczscd with cffcct from 30th June 2006.

114

F&C Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

1 14. USE OF DEALING COMMISSION (CONTINUED) The Fund’s investment manager executes trnnsactions on behalf of clients with a number of selected brokers. In the normal

course of business, the Fund’s investment nianagcr has entered or may enter in to arcingements (“Commission Sharing

Arrangements”) whereby tlie broker agrees to set aside a proportion of the commission earned on transactions and to use this

to discharge the cost of certain permitted services related to the execution of tmns~ctions on hehalf of clients and the

provision of investment research received. The services received under such arrangeriierits ate directly relevant to and assist

in tlie cost-effective provision of managcmcnt services generally by the Company’s Investment lManagcr to its clients and arc consistent with practices in the markets in which the Company’s Investment Manager does husiness.

In acrorkance with the FSA rules, the Fund’s investnient managcr will not enter into such Comniission Arrangements unless

the types of goods and services providcd arc rclatcd to the execution of trades on behalf of clicrits or comprise thc provision

of research and do not constitute goocls or services which the FSA has specified do not satisfy the reqtiirenients o f the rules

in rCSpKt of such arrdngcmcnts and will rclsondhly assist the Fund’s investment managcr in the provision of scrviccs to clients

on whose behalf orders are being executed.

15. DIVIDENDS DISTRIBUTION

It is intended to distribute to all holders of each Portfolio or class (if issued) at least 85 per cent, of the net investment income

(computed broadly in accordance with thc definition of net income under L!nited kingdom corporation tax principles) which

accrues to the Portfolio or class to wliicli such shares relate.

The Board niay decide to makc dividend paymcnt to Shareholders once a year or more frequently provided that no payment

will be made as a rrsiilt of which the total net :issets of the Fund would become less than the minimum required by Luxembourg law.

During tlic period from 1st October 2006 to 3lst hlarch 2007,dividends have hccn paid out to Shareholders as follows.

l’ortfolios

Amount o f

Dividends Paid

out to

1)atc Ihto (hrrcncy pcr Sharc Sharcholdcrs

Payment 1)ividcnd Exdividend

FJZC Europcan High Yield Bond - Class A

FGrC European Equity - Class A

FkC North American Equiy - Class A F M I’acific Equity - Chss A

FSrC Global Emerging Markets

Portfolio - ClassA

F M : Furopcian Corporatc Hond - Class A

F&C Global Real Estate Sccurities - ChssA FSrC Global Convcrtiblc Bond - Class A

FSrC Emerging Markcts Hond - Class A

F&C Emerging Markets Bond - Class B F&C Emerging Markets Bond -

Class Cornnierzl~ank Glohal bncrging Markets Bond - Euro (Hedge)

F b C Euro Inflation Linkcd Bond - Class I F&C European SmallCap - ClassA F&C Far E:ist Equity - Class 1

2 2.0 1 ,2007 22.01.2007 22.01.2007

22.01.200:

22.0 1 ,2007

2 2.0 1 ,2007 22.01.2007 22.01.2007 22.01.2007 22.01.2007

22.01.2007 22.01.2007

22.01.2007 22.0 1.2007

F&G Portfolios Fund SICAV Interim Report & Accounts 2007

3l.01.2007 31.01.2007 3 1 .0 1.200: 31.01.2007

31.01.2007 ~1.01.2007 31.01.2007 3 I .01.2007 31.01.2007 31 .01.2007

31.01.2007 ~1.01.2007

31.01.2007 3 1 .o 1.2007

ELR EUR EUR EI 1 R

1151)

E1 JR EUR

EUR I :ST) CTSD

[JSn 11513

IJSD USD

0.026 0.164

0.180 0.644

0.122 0.666 0.256 0.029 0.646 0.465

2.349 0.376 0.062 0.08 I

3,464,121 203,142

743,619 71 2,554

1,578,641 2,110,672

1,511,734 308,920

2.526,HlH

237,378

544,488 2,204,159

138,936

115

420,294

F&C Portfolios Fund SICAV Notes to the Financial Statements (continued) as at 31 st March 2007

16. SECURITIES LENDING

‘I’hc Fund may lcnd up to 50% of specificd securities portfolios (as lisrcd helow) to third parties.

The lending of seciirities will be niade for periods not exceeding 30 days. Lending transactions may not be carried out on more than 50% of the agfiregatc market valuc of the securities of the Relevant Portfolio, provided however thal 1111s limit is not

applicable where the Company has the right to terminate the lending contract at any time and obtain restitution of the

sccuritics Irnt.

As at 31st Warch 2007, the Sub-Fund’s valuation of securities on loan WAS as follows:

Sub-Funds Currency Securities on Loan

F&C: Emcrging Market Bond USD 12,514,310

FSrC Glohal Convetihle Bond EI!R 2,123,064

F&C European High Yield Bond EUR 7,153,468

F&C HioI’harrna El ; I1 1,491,474

FBrC Global Rel l Estate Securities El J R j6,696,07n

F6;C European SmallCap EUR 25,503.6n3

F&C Stewardship International EllR 6,007,305

FCkC U S SmallCap US1) 15,647,053

E’&(: North Anierican Equity [!SI> 7,365,197

The income earned from thr securities lending program is reflected in the Combined Statement of O]>emtions :mi Changes

in Net Assets.

17. CHANGES IN THE PORTFOLIO

A copy of the list oi changes in the portfolio during the reference period n i q be obtained free of charge at the custodian or

pxying :igents and ;It the paying and information agent in Germany, Wdyerische Hypo- undvereinsbank AG. 8031 1 Munich.

18. SUBSEQUENT EVENTS ‘I‘hc hllow~ng sharc classes have k e n launched sincc 31st March 2007.

F%C GTAAAlpha FuntlA shares (EUR) on 4th April 2007 F&C Far Eaa Equity A shares (EKR) on 17th April 2OO7

116

F&C Portfolios Fund SICAV Ad ministration

I Registered Office

2 8 , avenue Charles de Gaulle

B.F! 403 I.-201 4,I.uxemhourg

Management Company

lws (Luxcmbourg) SA. 33, rue de Gaspcrich - Building B

1.-5826 Hesperangc, 1.uxernbourg

Investment Manager

F&C Mu~dgement limited Exchange House, Prinirose Street

London EC2A 2NY, United Kingdom Autbo&ed und Regulated In thc [Jdted Kingdom by the Financial Seruices AtS thOr i t y VU)

Custodian, Registrar, Transfer, Domiciliary, Paying 8. Administrative Agent

Brown Brothers Harrintan (1,uxemhourg) S C.A.

2-8, avenue Ch.irles de Gaulle

U.I? 403 1.-2014, Luxcmhourg

Independent Auditor

Pricew;lrerhouseCoopers S.i r.1. Kkviseuf dentreprises

400, route d’Esch

B.l? 1443 1,-1014, Luxembourg

Legal Advisers to the Fund Elvingcr, Hoss L% Prussen

2, Placc Winston Churchill

D.P. 425. 1.-2014, Luxcmbourg

Paying & Information Agent in Germany

B;ryerische Hypo- untl Vcreinsbank A G

8031 1 Munich, Germany

Paying & Information Agent in France

Natixis 45, rue Siint-Dominirpie

75007 Paris

Frdncc

F&C Portfolios Fund SICAV Interim Report & Accounts 2007 117

FBC Portfolios Fund, 2-8, avenue Charles de Gaulle, B.P. 403, L-2014 Luxembourg Phone0035247AO66427 Fax00352 47 4066707