Dear Investor,

With effect from 6 February 2000, the present way in which Stamp Duty is paid on unit trusts will end and a new regime called "Stamp Duty Reserve Tax" (SDRT) will come into force.

SDRT is a liability of the Trustee of the authorised unit trust scheme. The amount of the liability is based on the value of purchases and sales of units in the trust, calculated on a rolling two week basis. The liability can be reduced by the proportion of the fund that is invested In exempt assets. An exempt asset is one which would not itself be liable to ad valorem stamp duty.

The unit trust regulations permit the amount of SDRT to be paid out of the unit trust. The regulations also permit, but do not oblige, the Manager to require from investors a separate payment or deduction of a provision against SDRT when they buy or sell units.

We have decided that with effect from 6 February 2000 any liability for SDRT will be paid from the unit trust fund by the Trustee. We do however reserve the right to make a deduction when investors sell units to the value of more than £100,000.00. The amount of this deduction will not exceed 0.5% of the value of the sale.

Under the current regime, the liability to Stamp Duty is allowed for in the difference between the quoted bid and offer prices of our funds. As a result of this change, I am delighted to advise that the actual bid/offer spread will reduce from 6.00% to 5.75%.

Yours sincerely,

Unit Trust Manager