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			M&G We purchased M&G Group P.L.C. (M&G) to enhance the group’s retail fund management presence. M&G is the oldest and largest retail unit trust manager in the UK and has a very strong brand. Performance in its first eight months since acquisition has been strong, with sales of £583 million and underlying profit of £56 million – both ahead of acquisition assumptions. At the end of 1999, M&G had £21 billion of funds under management. At the time of purchase we stated that we believed that the unit trust market would grow by 21 per cent compound over five years. Those estimates have been already superseded with the market growing by 39 per cent in the first year. This confirms completely our view of retail fund management as a strong growth market. M&G embraced Individual Savings Accounts (ISAs) from the outset. Taking full advantage of the changes in regulations which allow customers to invest by telephone or internet, we are one of only a handful of companies that give investors the chance to buy an ISA on-line. In the last quarter of 1999, sales through the internet increased dramatically and, as we enter 2000, six per cent of our direct business is sold via the internet. We will be making a substantial investment in our systems over the next three years. The project will create an efficient and uniform system for collective investment vehicle administration and a platform for operating in an electronic environment. Sales of ISAs, through both the intermediary and direct channels, have been good since launch, securing a five per cent share of the unit trust ISA market. In 1997 we redesigned our investment process in order to create a more diversified fund range and greater investment flexibility within the fund management team. These efforts have resulted in a broader range of offerings, including growth, fixed interest and themed funds, and are now delivering better performance from the traditional M&G equity income funds. During 1999, we introduced innovative products, including the M&G Global Managed Bond Fund and the M&G Global Technology Fund, to strengthen M&G’s reputation in the retail market. In November we reduced the annual management charge on our UK Index Tracker from 0.75 per cent to 0.3 per cent resulting in a six-fold increase in the daily rate of sales.