It is now eight months since we launched netPEP. During this time the offer price of units has risen by 21% against the Index which is up almost exactly the same, illustrating that netPEP is keeping closely in touch with the Index despite the volatility of the market, helped by the fact that we deal at weekly intervals. If we dealt more frequently, there is a risk that the tracking error might increase.

The performance of the FTSE 100 Index surprised everyone. The doom and gloomsters were pointing in November to the awesome impact that the slump in the Asian economies was going to have on the western markets, now at around the top of the current stockmarket cycle. As it is the Index recorded a massive 8.85% gain leaving the index on 17^th December less than 3% below its 52 week high of 5367.3 and 31% above its 52 week low.

Once again it was the Financials which topped the leaders board with average sector gains of 13% with the biggest gains coming from Alliance & Leicester which will please the carpetbaggers (+22%) and NatWest, a previous laggard of the financials in recent months with a gain of 21% on bid speculation. Even the Asian affected banks managed to show gains with Standard Chartered rising 9% and large FTSE constituent HSBC rising 14%.

Other sectors did not perform so well although both the Consumer Goods and Utilities sectors managed useful average gains over the month of 11% and 9% respectively but bringing up the rear was Mineral Extractions sector (mainly comprising oil companies) which only just managed to keep its head above the water with a gain of 0.1%.

There were some exceptional individual performances amongst the pharmaceuticals with Glaxo Wellcome and SmithKline rising sharply on healthy forecasts with rises of nearly 20% but the star performer by a long margin was from the alcoholics drinks sector not in anticipation of big Christmas profits but bid speculation for Allied Domecq which shot nearly 60%.

MAJOR INDEX PERFORMANCES