The sectors of the Fund that had the strongest relative performance for the first quarter were information technology and materials. The biggest contributors in the information technology sector were Cree, Inc. (1.8% of the Fund), Cognizant Technology Solutions Corp. (2.2%), ARM Holdings plc (0.5%), and Akamai Technologies, Inc. (0.6%). All four companies had recently reported positive earnings surprises and had issued favorable outlooks regarding near-term business trends. The relative strength of the materials sector was largely due to a 34% gain in Airgas, Inc. (1.5%). During the quarter, Airgas was the subject of a hostile takeover bid by a large competitor. The market perceived this offer as too low and the stock moved above the bid price, indicating the potential for even greater gains ahead. Compass Minerals International (1.1%) was up 19% on the prospects of strong demand for road salt due to a severe winter in many regions of the country.

The Fund's sectors that were the largest detractors from relative performance were industrials, consumer discretionary, health care, energy, and financials. In industrials, American Superconductor Corp. (0.6%) was down 29% in a short-term correction after a very strong 2009. Corrections Corp. of America (1.2%) was down 19% for the quarter, due to an announcement that it would be losing a large contract in Arizona over the next few years. In the consumer discretionary sector, GameStop Corp. (0.6%) was down slightly, due to reports of weaker than normal business trends. LKQ Corp. (1.9%) trailed the benchmark due to its defensive characteristics and Penn National Gaming, Inc. (0.5%) was down 2% because of lower earnings guidance by management. Among health care holdings, a few of the Fund's defensive names, including Laboratory Corp. of America Holdings (1.0%), Haemonetics Corp. (1.0%) and Masimo Corporation (0.5%) lagged the overall sector, which was very strong for the quarter. Humana, Inc. (0.5%), a health insurance and managed care company, underperformed due to the passage of health care reform, which had appeared likely to be defeated only a few months earlier.

In the energy sector, Southwestern Energy Company (1.1%) fell by close to 16% as natural gas pricing was very weak, hurting short-term earnings visibility. Arena Resources, Inc. (1.0%) was weak due to production problems at one of its facilities. The Fund's financial holdings included many strong stocks, but laggards outweighed the winners. Annaly Capital Management, Inc. (1.8%) and People's United Financial, Inc. (0.9%) trailed the benchmark due to their defensive profiles, while TD AMERITRADE Holding Corp. (1.3%) experienced weak trading trends by its customers.

The Munder Mid-Cap Core Growth Fund, with its emphasis on earnings momentum and reasonable valuation, continued to exhibit characteristics that compared favorably to its S&P MidCap 400® benchmark. For example, over the twelve months ended March 31, 2010, earnings per share for the typical company held in the Fund grew at 13%, compared to a negative 3% for the benchmark. Over the next twelve months, earnings growth of 15% is expected for the securities held in the Fund, slightly higher than the 13% growth expected for the S&P MidCap 400® Index*. Revenue growth over the past twelve months was down 0.6% for the Fund and down 7.0% 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 11% 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 18 times earnings, only slightly higher than the S&P MidCap 400® multiple of 17 times earnings*. We believe that the Fund is well positioned for the challenges that lie ahead in 2010. Our disciplined investment approach has served our investors well historically, and we believe this philosophy offers compelling opportunities going forward.

The sectors of the Fund that had the strongest relative performance for the fourth quarter were technology, energy and telecommunications services. In the technology sector, stocks with strong absolute price returns included Cree, Inc. (1.8% of the Fund), Cognizant Technology Solutions Corp. (2.4%), Check Point Software Technologies, Ltd. (1.3%) and Solera Holdings, Inc., (1.3%). All of these companies had recently reported better than expected earnings per share growth, and forecasts of near-term earnings were also very favorable. In the energy sector, Arena Resources, Inc. (1.0%) was a significant gainer, with help from a new pipeline transport agreement that will benefit the company through lower charges. Core Laboratories N.V. (1.7%), Southwestern Energy Co. (1.3%) and Atlas Energy, Inc. (1.2%) were other strong performers in the energy sector. Among the Fund's telecommunications services holdings, American Tower Corp. (1.5%) and NII Holdings, Inc. (0.8%) were up significantly more than the benchmark due to favorable trends at each company.

The Fund's sectors that detracted the most from relative performance were financials, materials, and consumer discretionary. In the financials sector, four stocks were significantly weaker than the market: Axis Capital Holdings, Ltd. (1.4%), Lazard, Ltd. (1.0%), TD AMERITRADE Holding Corp. (2.0%) and Lincoln National Corp. (1.2%). Lazard's chairman passed away during the quarter after a brief illness, but his successor has been named and the company is expected to successfully carry on. The other stocks were subjected to price weakness due to a combination of profit-taking and near-term fundamental concerns that do not appear to be significant to the long-term outlook for the companies. The same was true in the materials sector, where weaknesses in Crown Holdings, Inc. (1.6%) and Airgas, Inc. (1.2%) were due to profit taking and short-term fundamental factors. Many of the strongest benchmark names in the materials sector have a significant exposure to commodity prices, which was a positive for stock performance during the quarter. It was a slight negative for the Fund, however, which is underweighted in these names. In the consumer staples sector, GameStop was weak after a recent slowdown in growth from very high levels, although the company recently beat quarterly consensus estimates and management raised near-term guidance.

For 2009 as a whole, the Fund trailed its S&P MidCap 400® benchmark. Early in the year, when the market was declining, the Fund outperformed its benchmark due to a defensive bias. When the stock market began its dramatic rally in early March, stocks with low or negative earnings growth, low or negative return-on-equity and lower Standard & Poor's quality ratings were the market leaders. These were not the characteristics of the stocks held in the Fund and the Fund lagged its benchmark. Late in the third quarter, as the investment environment began to return to more normal conditions, low quality and the lack of earnings no longer defined the top-performing stocks and the relative performance of the Fund began to improve. For the twelve months ended December 31, 2009, the sectors that contributed the most to the Fund's relative performance were financials, telecommunications services and energy. In contrast, health care, consumer discretionary and materials detracted from relative returns.

The Munder Mid-Cap Core Growth Fund, with its emphasis on earnings momentum and reasonable valuation, continues to exhibit characteristics that compare favorably to its S&P MidCap 400® benchmark. For example, over the past twelve months, earnings per share for the typical company held in the Fund have grown at 11%, compared to a negative 11% for the benchmark. Over the next twelve months, earnings growth of 17% is expected for the Fund versus 13% for the S&P MidCap 400® Index*. Furthermore, revenue growth over the past twelve months was 0% for the Fund and a negative 8% for its benchmark. Return-on-equity, a basic measure of profitability, was 14% over the past twelve months for the Fund compared to 10% 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 18 times earnings, only slightly higher than the S&P MidCap 400® multiple of 17 times earnings*. We believe the Fund is well positioned for the challenges that lie ahead in 2010. Our disciplined investment approach has served our investors well historically, and we believe this philosophy offers compelling opportunities going forward.

The performance of the Fund reflected the strength of the rally, generating a positive double-digit return for investors. Even with its robust absolute return, however, the Fund lagged its S&P MidCap 400® benchmark for the quarter. The primary reason is that many of the stocks leading the rally were lower quality stocks that did not meet the criteria for inclusion in the Fund.

The top performing stocks in the S&P MidCap 400® Index during the third quarter shared the same characteristics as the second quarter leaders. Stocks with low or negative projected earnings per share growth were stronger than those with rapid projected earnings growth. Stocks with the lowest price/earnings ratios, including those with losses, were also among the strongest performers. Other characteristics of the stock market leaders were: low (or negative) return on equity over the past five years; low price/earnings ratios, including losses; a high beta (a measure of price volatility); smaller market capitalization; and low Standard & Poor's quality ratings. Stocks priced under $10, which had been beaten down by recessionary forces, were also above average performers (although they are a relatively small part of the market). In general, those companies that were hurt most by the recession or financial turmoil were those that showed the greatest rebound, with investors clearly hoping that these companies would thrive in the months ahead.

The characteristics of the stock market leaders during the second and third quarters did not, in general, meet the criteria for investment in the Fund, whose primary focus is above average and consistent earnings growth, coupled with a high return on capital. This focus on earnings and profitability gave the Fund a somewhat defensive tilt and that was not beneficial to relative performance in the context of one of the strongest stock market rallies in decades. While the Fund certainly participated in the rally that began in March, it lagged on the upside.

In the sectors of the Fund that had the weakest relative performance, including financials, materials, consumer discretionary and energy, investors favored benchmark companies they had shunned earlier in the year. For example, the benchmark's materials sector contained a large number of very cyclical companies that benefited from the improved market psychology, as contrasted to the more stable materials companies represented in the Fund. In all of the underperforming sectors, however, the weakest individual stock in the Fund was flat to only slightly down for the quarter, illustrating that there were no major negative surprises.

Two sectors of the Fund that had strong relative performance for the quarter included telecommunications services and consumer staples. In the telecommunications services sector, the strategy benefited from solid gains by NII Holdings, Inc. (0.7% of the Fund), a wireless communications company with operations in Latin America that benefited from an improvement in emerging markets stocks. In the consumer staples sector, both Flowers Foods, Inc. (1.2%) and Central European Distribution Corp. (1.4%) had strong relative performance.

At the end of the quarter, the Fund, with its primary themes of earnings momentum and reasonable valuation, continued to exhibit characteristics that compared favorably to its S&P MidCap 400® benchmark. Over the past twelve months, the typical company represented in the Fund experienced earnings per share growth of 9%, compared to a decline of 8% for the benchmark. Over the next twelve months, earnings per share growth of 8% was expected versus 7% for the S&P MidCap 400® Index.* Revenue growth over the past twelve months was 5% for the Fund, compared to -3% for the benchmark, while the average return on equity over the past three years was 16% for the Fund versus 14% for the benchmark. Despite these superior fundamental characteristics, the valuation of the Fund, which had a projected price to earnings ratio (P/E) over the next twelve months of 17 times*, was in line with the S&P Midcap 400® Index. The long-term performance of the Fund strategy has benefited from this combination of strong relative fundamentals and reasonable valuation. Looking ahead, we believe this philosophy will continue to serve the Fund's investors well.