HYPO PORTFOLIO SELECTION SICAV

SELECTION S

ICAV

Société d’Investissement à Capital Variable

Active sub-funds :

HYPO PORTFOLIO SELECTION SICAV - Basic Fund HYPO PORTFOLIO SELECTION SICAV - Equilibrium Fund

M A N A G E M E N T C O M P A N Y_{_____________________________________}

D E G R O O F G E S T I O N I N S T I T U T I O N N E L L E

-L U X E M B O U R G

12, Rue Eugène Ruppert, L-2453 Luxembourg

Unaudited Semi-Annual Report as at March 31st_{, 2008}

Société d'Investissement à Capital Variable R.C. Luxembourg B 61.843

Board of Directors

Chairman Alain LEONARD, Administrateur-Délégué

DEGROOF GESTION INSTITUTIONNELLE. - LUXEMBOURG

Directors Luca PARMEGGIANI, Independent Director

Donald VILLENEUVE, Directeur-Adjoint BANQUE DEGROOF LUXEMBOURG S.A.

Michele CORNO, Independent Director

Registered office 12, Rue Eugène Ruppert L-2453 Luxemburg

Custodian Bank & Paying Agent BANQUE DEGROOF LUXEMBOURG S.A.

12, Rue Eugène Ruppert, L-2453 Luxemburg

Domiciliary, Registrar, Transfer BANQUE DEGROOF LUXEMBOURG S.A.

& Administrative Agent 12, Rue Eugène Ruppert, L-2453 Luxemburg

Management Company DEGROOF GESTION INSTITUTIONNELLE - LUXEMBOURG

12, Rue Eugène Ruppert, L-2453 Luxemburg

Investment Manager SELLA BANK A.G.

Talstrasse 70, CH-8039 Zürich (until February 21st_{, 2008)}

PKB PRIVATBANK S.A.

Via S. Balestra, 1, CH-6901 Lugano (since February 22nd_{, 2008)}

Independent Auditor Deloitte SA

560, Rue de Neudorf, L-2220 Luxemburg

Paying Agent for Switzerland SELLA BANK A.G.

Talstrasse 70, CH-8039 Zürich (until February 21st_{, 2008)}

4

Contents

Seite

Articles of Incorporation, Financial Reports and Net Asset Value...….. 5

Statement of Net Assets...…...…. 6

Statement of Operations...…. 7

Statement of Changes in Net Assets...……….. 8

Schedule of Investments and Other Net Assets...…. 9 - 11 Geographic Allocation...………...…. 12

Economic Allocation...………...…. 13

Allocation by Currencies...…… 14

Changes in the number of Shares.………...…. 14

Changes in Capital, Total Net Assets and Net Asset Value……….. 14 Notes to the Financial Statements...…. 15 - 17

Articles of Incorporation, Financial Reports and Net Asset Value

HYPO PORTFOLIO SELECTION SICAV (« the SICAV ») is a Luxembourg incorporated

company with variable capital (« Société d’Investissement à Capital Variable ») which was set up on December 1st_{, 1997 for an unlimited duration in Luxembourg in the} form of a public limited company (« Société Anonyme »), in accordance with the amended law of August 10th_{, 1915 on commercial companies, and with the provisions} of Part I of the law amended of December 20th_{, 2002.}

The Articles of Incorporation were published in the « Mémorial C, recueil spécial des Sociétés et Associations » (the « Mémorial ») on December 24th_{, 1997. The Articles of} Incorporation as well as the legal notice concerning the issue of the Company’s Shares have been deposited with the Registrar of the Luxembourg District Court. These documents are available for review and copies can be obtained on payment of applicable charges.

Shares are available for subscription in the following Sub-Funds:

HYPO PORTFOLIO SELECTION SICAV – BASIC FUND (hereinafter “BASIC FUND”), reference currency: Euro.

HYPO PORTFOLIO SELECTION SICAV – EQUILIBRIUM FUND (hereinafter “EQUILIBRIUM FUND”), reference currency: Euro.

Shareholders in BASIC FUND and in EQUILIBRIUM FUND are actually offered only capitalisation shares (“Sub-Class B cap shares”).

The net asset value, the subscription price and the redemption price along with any other notices to the shareholders are available at the registered office of the Custodian and of the paying agents.

The prospectus, semi-annual and annual financial reports may be obtained at the registered office of the SICAV and of the paying agents.

Additional determination of the net asset value per share will be calculated on March 31st _{and September 30}th _{for valuation purposes.}

6

Statement of Net Assets

as at March 31

_{, 2008}

Investments in Securities (note 1a) 19.133.931,34 1.889.124,13 21.023.055,47

Cash at Banks 8.834.971,61 1.751.944,19 10.586.915,80

Interest Receivable on Bonds 161.416,55 2.523,11 163.939,66

Interest Receivable on Call Accounts 12.552,40 4.503,40 17.055,80

Guaranty Deposit (note 7) 273.600,00 0,00 273.600,00

Total ASSETS 28.416.471,90 3.648.094,83 32.064.566,73

LIABILITIES

Taxes and Expenses Payable (note 3) 115.675,30 19.233,36 134.908,66

Amounts Payable on Purchases 2.886.515,36 0,00 2.886.515,36

Amounts Payable on Redemptions 54.720,00 0,00 54.720,00

Total LIABILITIES 3.056.910,66 19.233,36 3.076.144,02

NET ASSETS 25.359.561,24 3.628.861,47 28.988.422,71

Number of Shares Outstanding (at the end of the Financial Period)

- capitalisation Class B 421.449,9281 36.298,8030

Net Asset Value per Share

(at the end of the Financial Period)

- capitalisation Class B 60,17 99,97

The accompanying notes form an integral part of these Financial Statements.

Statement of Operations

for the Period ended March 31

_{, 2008}

Sub-fund BASIC FUND (IN EUR) Sub-fund EQUILIBRIUM FUND (IN EUR) (*) COMBINED(IN EUR) INCOME

Dividends, net of taxes 18.907,38 0,00 18.907,38

Interest on Bonds, net of taxes 112.262,27 3.361,12 115.623,39

Interest on Call Accounts 78.604,10 19.802,54 98.406,64

Total 209.773,75 23.163,66 232.937,41

EXPENSES

Advisory Fees 9.863,23 3.992,00 13.855,23

Management Fees (note 5) 184.112,97 10.200,29 194.313,26

Custodian Fees 19.726,38 175,78 19.902,16

Subscription Tax (note 4) 6.423,81 908,48 7.332,29

Administration Fees 16.810,90 8.023,89 24.834,79

Miscellaneous Fees 30.894,02 341,69 31.235,71

Overdraft Interest 11.413,51 2.849,33 14.262,84

Total 279.244,82 26.491,46 305.736,28

NET PROFIT / LOSS -69.471,07 -3.327,80 -72.798,87

Net Realised Profit / (Loss)

- on Investments (note 1b) -246.277,52 2.817,00 -243.460,52

- on Currencies 737,94 0,00 737,94

- on Futures 744.687,50 1.240,00 745.927,50

NET REALISED PROFIT / (LOSS) 429.676,85 729,20 430.406,05

Change in Net Unrealised Appreciation / (Depreciation) (note 1d)

- on Investments -2.160.161,55 -867,68 -2.161.029,23

- on Currencies -11.429,59 0,00 -11.429,59

- on Futures (note 7) 23.535,00 0,00 23.535,00

RESULT OF OPERATIONS -1.718.379,29 -138,48 -1.718.517,77

The accompanying notes form an integral part of these Financial Statements.

8

Statement of Changes in Net Assets

for the Period ended March 31

_{, 2008}

Sub-fund BASIC FUND (IN EUR) Sub-fund EQUILIBRIUM FUND (IN EUR) (*) COMBINED(IN EUR)

NET ASSETS (at the beginning of the Financial Period)

27.044.557,27 0,00 27.044.557,27

Net profit / (Loss) -69.471,07 -3.327,80 -72.798,87

Net Realised Profit / (Loss)

- on Investments (note 1b) -246.277,52 2.817,00 -243.460,52 - on Currencies 737,94 0,00 737,94 - on Futures 744.687,50 1.240,00 745.927,50 Sub-total 27.474.234,12 729,20 27.474.963,32 Subscriptions / Redemptions - Subscriptions 1.801.812,34 3.628.999,95 5.430.812,29 - Redemptions -1.768.429,08 0,00 -1.768.429,08

Net Subscriptions / Redemptions 33.383,26 3.628.999,95 3.662.383,21

Change in Net Unrealised Appreciation / (Depreciation) (note 1d)

- on Investments -2.160.161,55 -867,68 -2.161.029,23

- on Currencies -11.429,59 0,00 -11.429,59

- on Futures (note 7) 23.535,00 0,00 23.535,00

NET ASSETS (at the end of the Financial Period) 25.359.561,24 3.628.861,47 28.988.422,71

The accompanying notes form an integral part of these Financial Statements.

Schedule of Investments and Other Net Assets

as at March 31

_{, 2008}

(Sub-fund Basic Fund)

CCY DESCRIPTION QUANTITY AVERAGE COST IN EUR AS AT MARKET 31.03.2008VALUE

IN EUR

% TOTAL

NET

ASSETS

(NOTE 1A)

Transferable Securities admitted to an Official Stock Exchange or dealt in on Another Regulated Market

Equities

EUR AIR LIQUIDE 800 75.648,53 77.256,00 0,30

EUR ALAPIS HOLDING INDUSTRIAL 300.000 551.338,02 651.000,00 2,57

EUR ALLIANZ SE 630 88.263,83 79.052,40 0,31

EUR ASSICURAZIONI GENERALI SpA 22.800 695.389,54 649.344,00 2,56

EUR AXA 3.300 75.657,54 75.867,00 0,30

EUR BASF A.G. 850 72.605,49 72.513,50 0,29

EUR BNP PARIBAS 1.200 76.429,31 76.668,00 0,30

EUR CARREFOUR S.A. 1.600 76.150,03 78.192,00 0,31

EUR DANONE GROUPE 1.440 76.196,28 81.561,60 0,32

EUR DEUTSCHE BANK A.G. 1.000 74.469,35 71.700,00 0,28

EUR DEUTSCHE TELEKOM A.G. -REG- 5.950 74.137,02 62.772,50 0,25

EUR ELICA SpA 65.030 325.286,56 145.667,20 0,57

EUR ENI SpA 3.350 74.604,86 72.360,00 0,29

EUR EUROTECH SpA 32.500 278.436,95 144.300,00 0,57

EUR IFIL INVESTMENTS SpA 47.686 308.525,24 210.676,75 0,83

EUR INTESA SANPAOLO SpA 17.000 74.782,41 75.905,00 0,30

EUR MEDIACONTECH SpA 9.950 74.056,17 59.899,00 0,24

EUR NEOCHIMIKI L.V. LAVRENTIADIS S.A. 30.000 636.212,25 517.200,00 2,04

EUR NOKIA OYJ 3.300 77.093,35 66.132,00 0,26

EUR OHB TECHNOLOGY A.G. 15.000 117.244,38 135.000,00 0,53

EUR PARMALAT SpA 100.000 254.122,73 243.500,00 0,96

EUR POLYNT SpA 200.000 702.620,39 728.000,00 2,87

EUR PORSCHE AUTOMOBIL HOLDING 3.000 232.704,83 347.340,00 1,37

EUR PRAMAC GROUP SpA 19.000 80.826,28 52.820,00 0,21

EUR S.A.P. A.G. 10.000 339.226,77 314.800,00 1,24

EUR SANOFI AVENTIS 1.300 86.763,63 61.776,00 0,24

EUR SMARTRAC N.V 21.068 488.401,07 645.734,20 2,55

EUR SUEZ 1.800 74.495,38 74.826,00 0,30

EUR TELECOM ITALIA 100.000 211.201,81 132.500,00 0,52

EUR TELEFONICA S.A. 4.000 75.152,30 72.800,00 0,29

EUR TOTAL S.A. 1.500 74.474,36 70.560,00 0,28

10

Schedule of Investments and Other Net Assets

as at March 31

_{, 2008}

(Sub-fund Basic Fund)

CCY DESCRIPTION QUANTITY AVERAGE COST IN EUR AS AT MARKET 31.03.2008VALUE

IN EUR % TOTAL NET ASSETS (NOTE 1A) Bonds

EUR BENI STABILI 2,50% 06-27.10.11 160.424 156.954,65 150.411,46 0,59

EUR GERMANY 3,25% 06-13.06.08 2.000.000 1.988.745,00 1.998.200,00 7,88

EUR GERMANY 3,50% 06-12.09.08 1.800.000 1.790.649,00 1.797.120,00 7,09

EUR IBRD 4% 05-24.06.20 506.000 479.506,56 394.680,00 1,56

EUR ITALY (BTP) 4% 07-01.03.10 2.500.000 2.516.495,00 2.507.450,00 9,89

EUR ITALY BOT 0% 07-30.04.08 1.300.000 1.278.589,80 1.296.164,68 5,11

EUR ITALY 0% 06-30.05.08 -CERTIFICAT TRESORERIE- 600.000 596.385,00 596.280,00 2,35 EUR ITALY 0%-07-31.12.09 -CERTIFICAT TRESORERIE- 500.000 468.035,36 467.825,88 1,84 EUR ITALY 02-01.07.09 -FRN- 1.800.000 1.803.195,00 1.802.646,00 7,11 EUR ITALY 04-01.05.11 -FRN- 1.800.000 1.806.741,00 1.801.800,00 7,11

EUR TELECOM ITALIA 1,50% 01-01.01.10 100.000 118.065,00 110.030,17 0,43

Total Bonds 13.003.361,37 12.922.608,19 50,96

Total Fund Portfolio 19.613.774,38 19.133.931,34 75,45

Schedule of Investments and Other Net Assets

as at March 31

_{, 2008}

(Sub-fund Equilibrium Fund) (*)

CCY DESCRIPTION QUANTITY AVERAGE COST IN EUR AS AT MARKET 31.03.2008VALUE

IN EUR

% TOTAL

NET

ASSETS

(NOTE 1A)

Transferable Securities admitted to an Official Stock Exchange or dealt in on Another Regulated Market

Equities

EUR POLYNT SpA 90.000 326.826,00 327.600,00 9,03

Total Equities 326.826,00 327.600,00 9,03

Bonds

EUR ITALY (BTP) 4% 07-01.03.10 600.000 605.586,00 601.788,00 16,58

EUR ITALY (BOT) 0% 07-15.04.08 300.000 296.454,00 299.579,93 8,26

EUR ITALY (BOT) 0% 07-15.07.08 200.000 195.691,00 197.767,45 5,45

EUR ITALY (BOT) 0% 07-30.05.08 300.000 295.005,00 298.168,73 8,22

EUR TELECOM ITALIA 1,50% 01-01.01.10 149.250 170.429,81 164.220,02 4,53

Total Bonds 1.563.165,81 1.561.524,13 43,04

Total Fund Portfolio 1.889.991,81 1.889.124,13 52,07

The accompanying notes form an integral part of these Financial Statements.

12

Geographic Allocation

(percentage of Total Net Assets)

SUB-FUND BASIC FUND AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

ITALY 11.311.180,14 44,59

GERMANY 4.878.498,40 19,24

GREECE 1.168.200,00 4,61

NETHERLANDS 645.734,20 2,55

FRANCE 596.706,60 2,35

UNITED STATES OF AMERICA 394.680,00 1,56

SPAIN 72.800,00 0,29

FINLAND 66.132,00 0,26

Total Portfolio 19.133.931,34 75,45

SUB-FUND EQUILIBRIUMFUND (*) AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

ITALY 1.889.124,13 52,07

Total Portfolio 1.889.124,13 52,07

Economic Allocation

(percentage of Total Net Assets)

SUB-FUND BASIC FUND AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

STATE 12.267.486,56 48,37

CHEMICAL PRODUCTS 1.394.969,50 5,50

FINANCIAL SERVICES - HOLDINGS 856.410,95 3,38

INSURANCE COMPANIES 804.263,40 3,17

PHARMACOLOGY & PERSONAL CARE 712.776,00 2,81

TELECOMMUNICATIONS 579.234,67 2,28

EUROPEAN ORGANIZATIONS 394.680,00 1,56

ROAD VEHICLES 347.340,00 1,37

FOOD & CLEANING MATERIALS 325.061,60 1,28

IT & INTERNET 314.800,00 1,24

BANKS 287.873,00 1,14

INFORMATION, TECHNOLOGY & COPIERS 204.199,00 0,81

MISCELLANEOUS 198.487,20 0,78

REAL ESTATE 150.411,46 0,59

RAW MATERIALS 142.920,00 0,56

RETAIL TRADING, DEPARTMENT STORES 78.192,00 0,31

ENERGY SOURCES 74.826,00 0,30

Total Portfolio 19.133.931,34 75,45

SUB-FUND EQUILIBRIUMFUND (*) AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

STATE 1.397.304,11 38,51

CHEMICAL PRODUCTS 327.600,00 9,03

TELECOMMUNICATIONS 164.220,02 4,53

Total Portfolio 1.889.124,13 52,07

14

Allocation by Currencies

(percentage of Total Net Assets)

SUB-FUND BASIC FUND AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

EURO 19.133.931,34 75,45

Total Portfolio 19.133.931,34 75,45

SUB-FUND EQUILIBRIUMFUND (*) AMOUNTS IN EUR _N% T_{ET A}OTAL_SSETS

EURO 1.889.124,13 52,07

Total Portfolio 1.889.124,13 52,07

(*) Sub-fund Equilibrium Fund launched on December 20th_{, 2007.}

Changes in the Number of Shares

from October 1

_{, 2007 to March 31}

_{, 2008}

Sub-fund Sub-fund

BASIC FUND EQUILIBRIUMFUND

Capitalisation Capitalisation

Number of shares at the beginning of the Financial Period 421.200,6671 0,000

Number of shares subscribed 28.853,9230 36.298,803

Number of shares redeemed 28.604,6620 0,000

Number of shares at the end of the Financial Period 421.449,9281 36.298,803

(*) Sub-fund Equilibrium Fund launched on December 20th_{, 2007.}

Changes in Capital, Total Net assets and Net Asset Value

SUB-FUND DATE OUTSTANDING

SHARES

TOTAL

NET ASSETS

NET ASSET VALUE

BASIC FUND (in EUR) 30.09.2003 89.232,2910 (Cap.) 4.459.829,90 49,98 (Cap.)

30.09.2004 33.902,2590 (Cap.) 1.740.202,96 51,33 (Cap.) 30.09.2005 109.656,5150 (Cap.) 5.924.594,55 54,03 (Cap.) 31.03.2006 204.801,5601 (Cap.) 12.263.163,87 59,88 (Cap.) 30.09.2006 220.438,5161 (Cap.) 12.966.742,35 58,82 (Cap.) 31.03.2007 348.103,2921 (Cap.) 22.952.850,14 65,94 (Cap.) 30.09.2007 421.200,6671 (Cap.) 27.044.557,27 64,21 (Cap.) 31.03.2008 421.449,9281 (Cap.) 25.359.561,24 60,17 (Cap.)

EQUILIBRIUM FUND 20.12.2007 14.290,000 (Cap.) 1.428.425,70 99,96 (Cap.)

Notes to the Financial Statements

as at March 31

_{, 2008}

NOTE 1 - ACCOUNTING PRINCIPLES

The Financial Statements of the SICAV have been prepared in accordance with accounting principles generally accepted in Luxembourg, including the following significant policies :

a) Valuation of Investments

1) The value of any security traded or admitted to official quotation is based on the last available price in Luxembourg on the Valuation Day.

2) The value of any security admitted on another regulated market which operates regularly and is recognised and open to the public is based on the last available published price in Luxembourg on Valuation Day.

3) In the case of securities not quoted or not traded on a stock exchange or another regulated market which operates regularly and is recognised and open to the public or if the price as determined further to (1) or (2) in the case of securities quoted or traded on such stock exchange or market is not representative of their real value, then the valuation will be based on the probable realisation value estimated with prudence and good faith.

4) The valuation of derivatives (options and futures) which are traded or admitted on a stock exchange or another regulated market will be determined according to their last bargain price as at March 31st_{, 2008 on the stock exchange or the regulated market} on which they are traded. If one or more of these derivatives cannot be traded on the Valuation Day, the valuation of these derivatives will be made at a fair value at which it is expected that they may be resold, as determined in good faith by and under the direction of the Board of Directors.

b) Net realised profit / (loss) on sale of investments and derivatives

The net realised profit / (loss) on sale of investments and derivatives is determined on the basis of the average cost of investments and derivatives sold.

c) Conversion of foreign currencies

Cash deposits, other net assets and the market value of investments and derivatives expressed in currencies other than the accounting currency of the Sub-fund are converted into the accounting currency of the Sub-Fund at the exchange rate prevailing at the Valuation Day.

d) Unrealised profit / (loss)

16

Notes to the Financial Statements

as at March 31

_{, 2008 (continued)}

NOTE 3 - TAXES AND EXPENSES PAYABLE

Management fees (note 5) 104.476,97 EUR

Custodian fees 9.515,94 EUR

Subscription tax (note 4) 3.608,49 EUR

Other fees 17.307,26 EUR

Total 134.908,66 EUR

NOTE 4 - SUBSCRIPTION TAX (« TAXE D’ABONNEMENT »)

Under current law and practice, the SICAV is not liable to any Luxembourg income tax. The SICAV is however liable in Luxembourg to a tax of 0,05% per annum, such tax

being payable quarterly and calculated on the basis of the net assets of all the Sub-funds at the end of the relevant quarter.

NOTE 5 - MANAGEMENT COMPANY AND INVESTMENT MANAGER FEES

The SICAV shall pay to the Management Company, on a quarterly basis, a

management fee applicable on the average net asset value of BASIC FUND and EQUILIBRIUM FUND during the relevant quarter at the annual rate of 0,075% with an annual minimum amount of Euro 7.500,-.

In remuneration for its services, the Management Company will pay to the Investment Manager at the charge of each Sub-Fund, on a quarterly basis, an investment management fee calculated on the average net asset value of the relevant Sub-Fund during the relevant quarter at the following annual rate:

BASIC FUND Sub- Fund 1,40%

EQUILIBRIUM FUND Sub-Fund 1% maximum

NOTE 6 - PERFORMANCE FEES

In addition, the Investment Manager receives from the Management Company at the charge of each Sub-Fund a quarterly performance fee for each Sub-Fund at the following rate:

BASIC FUND Sub-Fund : a quarterly performance fee of 15% of the increase in the net asset value of the shares in the BASIC FUND Sub-Fund, calculated according to the so-called net capital growth method, i.e. the calculation is made on the basis of the net asset value valid on the last Valuation Day when a performance fee was paid. This means that the performance fee is only raised when a new historical increase in the net asset value is reached on a Valuation Day (high watermark principle).

EQUILIBRIUM FUND Sub-Fund : a quarterly performance fee of 20% of the amount by which the SICAV outperforms the 3 months Euribor, in the EQUILIBRIUM FUND Sub-Fund, on the basis of its average net assets. There is outperformance of the net asset value (“NAV”) of the Sub-Fund if there is a NAV increase since the last Valuation Day when a performance fee was paid and if this increase is higher than that of the 3 months Euribor. This means that the performance fee is only raised when the NAV has progressed more than the 3 months Euribor and when a new historical increase in the net asset value is reached on a Valuation Day (high watermark principle).

Notes to the Financial Statements

as at March 31

_{, 2008 (continued)}

30.03.2008 UNREALISED GAIN OR LOSS(IN CURRENCY) (CIN OMMITMENTCURRENCY)