Metzler/Payden European Emerging Markets Fund Commentary

The second quarter of 2009 provided a remarkable recovery of global risky assets and Emerging Europe’s stocks markets were no exception. For the quarter, Hungary (+65.7%) topped the performance charts, followed by Russia (+43.1%), Poland (+36.6%), and the Czech Republic (+33.7%). Russia’s market benefitted from a combination of improved expectations for Chinese/global recovery and higher commodity prices. Concerns about the strength of the banking system in Central Europe also seemed to dissipate, while signs of a bottom in the slowdown of economic activity showed in surveys (such as the Purchasing Manager’s Index).

Given the strong rebound in Eastern Europe’s equity markets, there are concerns about the sustainability of the market rally. While corporate earnings suffered in the first six months of 2009, we believe that earnings will begin to improve as the year progresses. Should this happen, valuations would become more attractive compared to their historical averages.

For more information and to obtain a prospectus browse this website or call 866 673-8637. Before investing, investors should carefully read and consider investment objectives, risks, charges, expenses and other important information, which are contained in the prospectus. Investment in foreign securities offers different rewards and challenges from investing in domestic securities, including changes in exchange rates, political changes, and differences in reporting standards, and for emerging-market securities, greater volatility. The Metzler/Payden Funds are distributed by Payden & Rygel Distributors, member FINRA.