Legal & General Investment Management

CAF UK Equitrack Fund

20 May 2008

John Tickle - Head of Institutional Investment

2

CAF UK Equitrack Fund

• A UK Equity Index Common Investment Fund designed to capture the return of the FTSE All Share Index

• Managed by LGIM’s successful index team who look after £200bn

• Trustee: Royal Bank of Scotland

• Operator: L&G(UTM) Ltd

• Launched 7 Feb. 2005

• Current size £198m

• Underlying yield 3.60%

3

Index Fund Characteristics

• Lower Risk

– Eliminate stock selection risk

– Match index return within tight tolerances

• Lower Cost

• Performance

4

Investment Risks

Number of Stocks

Risk

Market Risk

Stock Specific Risk

Index Funds avoid stock specific risk

0 100

5

Index Fund Characteristics

• Lower Risk

• Lower Cost

– Low turnover

– Low fees

– Low restructuring costs

• Performance

6

Index Fund Characteristics

• Lower Risk

• Lower Cost

• Performance

– Consistent market returns

– Accurate tracking

7

Our Trading Strategy

• Low cost objective - including market impact

• Crossing - internal/external through crossing networks

• Phasing strategy for new issues based on stock liquidity

• Concentrate transactions at points of greatest liquidity

• Index constituent changes are a major focus

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Index Changes

• Additions / deletions

• Free float changes

• Alterations in share capital

• Rights issues

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FTSE All Share Index Structure

Source FTSE at 30.04.08

Index Constituents % Yield%

Large Cap 100 84.75 3.71

Mid Cap 250 12.44 3.03

Small Cap 314 2.81 2.73

Total 664 100.00 3.60

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Investment Returns Comparedfrom February 2005 to date

14/5/08

2005 2006 2007 2008

90

100

110

120

130

140

150

160

FTSE ALL SHARE - TOT RETURN IND

FTSE W WORLD EX UK £ - TOT RETURN IND

FTA BRIT.GOVT. FIXED ALL STOCKS - TOT RETURN IND Source: Thomson Datastream

UK equities

Overseas equities

Gilts

11

Investment Returns Comparedfrom 30 April 2007 to date

14/5/08

M J J A S O N D J F M A M

85

90

95

100

105

110

FTSE ALL SHARE - TOT RETURN IND

FTSE W WORLD EX UK £ - TOT RETURN IND

FTA BRIT.GOVT. FIXED ALL STOCKS - TOT RETURN IND Source: Thomson Datastream

Gilts

Overseas equities

UK equities

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Performance by Capitalisationfrom 30 April 2007 to date

14/5/08

M J J A S O N D J F M A M

70

75

80

85

90

95

100

105

110

FTSE 100 - TOT RETURN IND

FTSE MID 250 - TOT RETURN IND

FTSE SMALL CAP - TOT RETURN IND Source: Thomson Datastream

Top 100

Mid 250

Small Cos

13

UK Equity Sector returnsYear to 30 April 2007

Sector Return%

Oil & Gas 23.92

Basic Materials 50.66

Industrials -12.64

Consumer Goods -1.81

Healthcare -18.10

Consumer Services -23.90

Telecommunications 4.63

Utilities -2.31

Financials -19.80

Technology -18.85

Year to 30 April 2008 -4.31

Source :LGIM / FTSE

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CAF UK Equitrack FundTracking results to 30 April 2008

Source: LGIM Total return data before expenses based on closing monthly values to 30 April 2008

Last 12 Months % Since Inception % pa

CAF UK Equitrack Fund -4.27 10.64

FTSE All Share Index -4.32 10.58

Tracking Deviation 0.05 0.06

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Price Performance

Source: Morningstar Workstation, bid to bid prices, net reinvested income to 30 April 2008

2005/6%

2006/7%

2007/8%

Three Years% pa

CAF UK Equitrack Fund

37.07 13.56 -4.39 14.18

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How the CAF Equitrack Fund can help your charity

• Captures the market return efficiently

• A unitised alternative to a segregated portfolio

– Zero cost objective for transfers

• An ideal core investment

• Very low fees

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UK Equity Market

• The UK economy is deteriorating as looser monetary policy is not being passed onto consumers.

• Domestic profits may be under pressure form inflation and high interest rates.

Sterling’s value

16/5/08

2001 2002 2003 2004 2005 2006 2007

70

80

90

100

110

120

130

140

150

EURO TO UK £ (WMR&DS) - EXCHANGE RATE

JAPANESE YEN TO UK £ (WMR) - EXCHANGE RATE

US $ TO UK £ (WMR) - EXCHANGE RATE Source: Thomson Datastream

Euro

Yen

USD

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UK Equity Market

• Attractive valuations relative to gilts

• Resources exposure should benefit if Asian growth holds up

• Vulnerable to rising risk aversion

• Domestic recession, falling house prices and rising import costs to hurt earnings

16/5/08

2001 2002 2003 2004 2005 2006 2007

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

FTAGOVT(RY)/(100/TOTMKUK(PE))

1.0

Source: Thomson Datastream

Gilts better value

Equities better value

UK Gilt-Equity earnings yield ratio

19

External assets = 78%

LGIM Funds Under Management

Index

£bn

Active

£bn

Total

£bn

UK Equities 75.65 5.59 81.24

Overseas Equities 58.89 3.51 62.40

Bonds 64.52 45.84 110.36

Property n/a 8.61 8.61

Structured Solutions n/a 14.04 14.04

Ventures n/a 0.15 0.15

Cash 0.84 4.60 5.44

Total 199.90 82.35 282.25

Source: LGIM 31st March 2008 internal data

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Legal & General Investment Management does not provide advice on the suitability of its products or services.

Authorised and Regulated by the Financial Services Authority

The ultimate holding company of Legal & General Investment Management Limited is Legal & General Group Plc

Registered Office:One Coleman StreetLondonEC2R 5AA

Registered in England No.2091894

The FTSE UK, FTSE All-World™ and FTSE4Good™ index series are calculated by FTSE International Limited (“FTSE”). FTSE does not sponsor, endorse or promote these funds. The FTSE Global Bond index series is operated by FTSE International Limited in conjunction with Reuters, the Institute of Actuaries and the Faculty of Actuaries. FTSE, Reuters, the Institute of Actuaries and the Faculty of Actuaries accept no liability in connection with the trading of any products on these indices.

All copyright in the indices’ values and constituent lists belong to FTSE. Legal & General Investment Management Ltd has obtained full licence from FTSE to use such copyright in the creation of this product..

“”FTSE™”, “FT-SE®” and “Footsie®” are trade marks of the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited (“FTSE”) under licence. “All-Share, “All-World” and “FTSE4Good™“ are trade marks of FTSE.”

Past performance is not necessarily a guide to the future and the value of investments can fall as well as rise.

Investment in overseas equity and bond funds may involve exposure to a currency other than Sterling. Investors are warned that changes in the rate of exchange prevailing at any given time may cause the value of investments in those funds to go down as well as up.

A brochure describing our range of units trusts is available on request.