METRO BALANCED FUND (Formerly Metro Capital Growth Fund)

FUND CLASSIFICATION: BALANCED CLIENT SUITABILITY: Suitable for aggressive investors who want income and growth for their investments over a period of time. FUND PERFORMANCE as of 7/29/2011

FUND PERFORMANCE REPORT

July 2011

Period Past 1 month Past 3 months YTD YOY Past 3 Years

Fund 4.154% 0.725% 3.274% 23.037% 60.459%

Benchmark 3.323% 2.625% 4.628% 18.291% 47.982%

FUND OBJECTIVE: The Fund aims to provide for its participants high growth and high income by investing in a diversified portfolio of equities composed mainly of blue chip and select second line companies listed at the Philippine Stock Exchange (PSE) and peso-denominated fixed instruments. FUND SUMMARY NAV NAVPU PRODUCT FEATURES Base Currency Min. Initial Participation Min. Addl. Participation Investment Horizon Min. Holding Period Early Redemption Charge Trust Fee Custodian Fee Applicable Tax Valuation Dealing Day Redemption Settlement Fund Manager Custodian Launch Date OTHER DISCLOSURES
1. Prospective investment outlets shall be limited to those described in the Declaration of Trust of the Fund.

: Php 918.47 Million : 2.401297 : Php : Php 25,000 : Php 25,000 : Five years : 90 calendar days : 50% of income earned from the redeemed amount : 2.0% p.a. based on NAV : 0.015% p.a. : 20% Final Tax for Fixed Income Investments : Marked-to-Market : Daily up to 12:00nn : Next Banking Day from Date of Redemption : Metrobank-Trust Banking Group : Standard Chartered Bank : April 8, 2005

Rates shown are absolute. Benchmark is a combination of 50% Philippine Stock Exchange index (PSEi), 40% HSBC Local Currency Bond Index (HSLI) 1-5 years (net) and 10% Phil. 30-Day Special Savings Rate Gen. Average (net).

NAVPU TREND, Year-to-Date

2.40 2.30 2.20 2.10 2.00 1.90 1.80 8/2 9/2 10/2 11/2 12/2 1/2 2/2 3/2 4/2 5/2 6/2 7/2

TOP 10 HOLDINGS
Security TEL AGI SCC DMC ICT ALI FPH BDO AC FGEN % 6.71% 6.36% 6.22% 5.92% 4.99% 4.91% 4.83% 4.77% 4.17% 3.83%

FUND COMPOSITION
Deposits 36%

Stocks 57% GS 5 yrs up 7%

SECTOR ALLOCATION
Holding 17% Industrial 10% Power 9% Property 15%

Financial 13%

Others 4%

Mining 14%

Service 18%

FUND MANAGERS REPORT

Stocks

By John L. Padilla
PSEi 4503.63 + 4.95% MoM
Stocks reached a milestone in July, sustaining the surge in late June and advancing to a new intra-day record high 4515 on the back of renewed optimism on the economy and foreign inflows. The spillover of euphoria over the twin upgrades in credit rating helped to attract foreign funds into the local stock market as net foreign inflow surged to $277M from just $30M in June. The July inflow is comparable to the total net inflow form foreign funds in the six months prior to July. Funds are exiting the developed markets as outlook on these economies do not appear encouraging at the moment. The likelihood of a return to recession for the US economy has once again surfaced in the markets the last few days after a string of ugly economic data on manufacturing, consumer spending, slowing GDP, surging govt debt, and high unemployment. Europe has not been a source of comfort either as fears of a contagion is turning off investors for now. Locally, news have been mostly on the positive side. OFW remittance remains on track to hit the full year target of at least $19B. Inflation appears to be leveling-off. Interest rates remain accommodative for capital expansion and fiscal consolidation is in full swing. Mining stocks continue to shine amid the record-setting run in gold and reports of acquisitions. The month also saw the rebound of some market laggards (URC, FLI, MEG and RLC) which is sustaining interest in the market. Third-liners are also having a field day, giving market players something to be busy about while waiting for the next catalyst to return to main liners. The market sustained the surge from the previous month to push the index to close above the 4500 level, up 4.95% MoM. Outlook The market appears firmly in place to rise further after recently posting a new record high. However, in the interim we can expect the market to trade in choppy waters as fears of the

US economy falling into a relapse and the ongoing debt crisis gripping many eurozone economies dampen investors appetite for risk. While we are not in the same boat as these more developed economies, possible cooling off by investors could temporarily sap the wind off the sails of the index. But we remain confident that emerging markets like the Philippines will continue to prove it deserves the attention it is getting. Hypothetically, we think funds should move out of the US and Europe and find their way into markets like us where growth is solidly backed by a resilient consumer sector, benign inflation, prudent fiscal management, and a government that is committed to curb corruption. The current weakness in the US and European markets could push the index to test its breakout point of 4341 with 4150 as the secondary support. Despite the shock of the Dow Jones 4.6% drop on Thursday, the PSEi fought its way back to trim a 3.5% intra-day loss to by just 1.4% by the end of the day even as other bigger markets in the region posted wider losses. Overall we continue to see the index moving higher to 4700 initially then to 5000. We are bullish on mining (LC, LCB and PX) which will remain the favored sector due to the attractiveness of gold under the present environment. We continue to like power-related stocks (EDC, FGEN, AP) as supply of power should remain in shortage in the next two years. We also have our eyes on the banks (MBT, BDO, SECB, and BPI) after the strong loans growth in 2Q bolstered our optimism on the sector. We are positive on infra-related stocks (DMC, SMC, and MPI) as government remains committed to push its centerpiece program (PPP). For tourism, we will pursue AGI as it remains still the only play in town, at least for the moment. Strategy We are confident that despite the weakness in the developed markets, local stocks will remain buoyant. Thus, we are keeping our overweight call in the market but at the same time adopt a trading stance in order to take advantage of the volatility in the market. Our trading action will be focused primarily on the stocks mentioned but will also be open to other stocks that may warrant our consideration. We will take advantage of extreme selloffs to build up our positions in our key stock picks and will also look to lock in gains as prices approach interim resistance points. We will also position in stocks that may be the subject either of an acquisition or inclusion in the MSCI or the PSEi for trading opportunities.

Visit www.metrobank.com.ph or www.uitf.com.ph for daily NAVPUs and historical performance.

Participation in the Fund is NOT a bank deposit or an obligation of, or guaranteed, nor issued, nor insured by Metropolitan Bank & Trust Company or its affiliates or subsidiaries and therefore are not insured or governed by the Philippine Deposit Insurance Corporation (PDIC). Any income and loss arising from market fluctuations and price volatility of the securities held by the fund, even if invested in government securities, is for the account of the investor. As such the fund is not capital protected and may not be suitable for clients seeking preservation of capital. Historical performance when presented is purely for reference purposes and not a guarantee of similar future results. The Declaration of Trust of the Fund is available at the principal office of the Trustee upon request.