Factors that contributed to the Fund’s weak relative performance during the market rally of the past year appeared to have largely abated as the market returned to what we view as more normal conditions. During the March 2009 through April 2010 rally in the S&P MidCap 400® Index, stocks with the highest volatility, the smallest market capitalizations, lower growth, and generally lower quality led the rally. We have now seen the relationship between these factors and mid-cap stock prices return to more neutral patterns that do not favor any particular theme, as is more typically the case. One exception was that stocks with the highest volatility did perform the worst during the market weakness in the second quarter of 2010. Since the Munder Mid-Cap Core Growth Fund was slightly less volatile than the market, this was marginally beneficial to the performance of the Fund.

The sectors of the Fund that had the strongest relative performance during the second quarter were information technology and consumer discretionary. In the information technology sector, the biggest contributors were Akamai Technologies, Inc. (1.2% of the Fund), ARM Holdings PLC (1.2%) and Sybase, Inc, which was acquired by SAP AG during the quarter at an attractive premium. Akamai benefited from investor enthusiasm over increased streaming of video content over the Internet, a practice that will benefit the company. ARM Holdings is a leader in intellectual property for semiconductors used in mobile technologies, and benefited from new product offerings by Apple, Inc. and other providers.

In the consumer discretionary sector, Chipotle Mexican Grill, Inc. (1.5%) experienced very rapid earnings growth that had exceeded expectations for several quarters in a row. In addition, investors continued to gain confidence in the company’s ability to expand its store base. Similarly, New Oriental Education and Technology Group, Inc. (1.1%), a Chinese educational services company, continued its rapid growth and recently reported earnings above consensus estimates. Another strong performer, O’Reilly Automotive, Inc. (0.9%), also experienced rapid growth and rising earnings estimates.

The health care sector was the only significant detractor from the Fund’s relative performance. BioMarin Pharmaceutical. Inc. (1.3%) was down in sympathy with other biotech stocks, which have been very weak during the recent downturn in the market. This weakness came despite the fact that BioMarin is one of the few companies in the sector that was profitable and had successful products on the market. Amedisys, Inc. (1.1%) was down during the quarter due to Senate Finance Committee hearings on home health care issues related to therapy utilization and physician relationships. Catalyst Health Solutions, Inc. (1.0%) was weak during the quarter despite strong earnings trends and an absence of negative news. Prior to the peak in the market, the stock had been an above-average performer and this sell-off appeared to be a temporary correction.

The focus of the Mid-Cap Core Growth Fund continues to be on earnings momentum and reasonable valuation. Over the past twelve months, earnings per share for the typical company held in the Fund grew at 17%, compared to 3% for the benchmark. Revenue growth over the past twelve months was 0.3% for the Fund and -3% for its benchmark. Return on equity, a basic measure of profitability, was 14% over the past twelve months for the Munder Mid-Cap Core Growth Fund, compared to 12% for the S&P MidCap 400® Index. Despite these favorable fundamental characteristics, the valuation of the Fund was quite reasonable, with a price-to-earnings ratio on projected earnings over the next twelve months of 17 times earnings, only slightly higher than the S&P MidCap 400® multiple of 15 times earnings.* We believe this combination of fundamental strength and reasonable valuation positions the Mid-Cap Core Growth Fund for strong competitive performance in the year ahead. These are the characteristics that have historically contributed to the Fund’s long-term record, and we firmly believe that they will continue to serve our investors well.