The FTSE/JSE Listed Property Total Return Index was up 27.08% for the year to date and up 58.15% from the fund's inception. The listed property market was up by 7.33% for the month of September after a strong recovery in world markets.

The economic data released during August imparts a mixed signal as to the direction of interest rates October Monetary Policy committee meeting. Consumer Price Inflation (CPIX) dipped to 6.3% in August from a peak of 6.5% in July. The result was only marginally above consensus expectations measured by Reuters (6.2%). The headline CPI recorded a moderately larger increase of 0.5% in August, owing to the impact of the August interest rate hike on mortgage cost. The year on year rate of change in the headline CPI nevertheless decelerated to 6.7% from July's 7.0%, given the base effect of the interest rate hike in August 2006. The year on year change in the Producer Price Inflation (PPI) decelerated to 9.4% in August 2007 from 10.3% in July 2007. The results were exactly in line with market expectations of 9.7%. This is a welcome reprieve to single-digit levels following five months of double-digit producer inflation rates, which signals that PPI inflation might have peaked in May. In other words, we are likely passed the worst in terms of pipeline price pressures. However, the outcome of the October MPC meeting remains a close call, given the larger unpleasant surprise in July numbers and the fact that inflation has now been above the top end of the SARB's target range for five months in a row.

Growth of Personal Consumption Expenditure (PSCE) decelerated to 22.9% in August from 23.1% in July. The result was marginally higher than the consensus forecast for a deceleration to 22.7%. Year on year growth of the key total loans and advances measure (that is, PSCE excluding investments and bills discounted) also decelerated to 25.0% from 26.1% in July, and growth of asset-backed lending ticked up marginally to 23.2% from 23.0%. Decelerating PSCE numbers could be viewed as positive from an interest rate perspective, to the extent that they could be seen to suggest that "excessive" and "uncomfortably high" consumer spending is cooling off. Nevertheless, any clear trend in the credit numbers may still be disrupted by the noise generated by the implementation of the National Credit Act (NCA), the public sector strike (which would have impacted the property deeds office) in June and perhaps also the previous implementation problems with eNatis.

The following counters contributed in excess of 8% to the fund's overall performance; Siyathenga, Resilient, Hospitality (the fund has overweight positions in excess of 3.5% of the benchmark), ApexHi A and Redefine, and the following counters marginally affected the overall performance with negative contribution; Premuim and ApexHi B which the fund completely sold.

The property sector fundamentals are still positive with most counters reporting reduced vacancies, increased turnovers because of rental increases across the retail, industrial and commercial sectors, lower financing costs because of securitization and aggressive lending margins by the banks. This positive sentiment is reflected in the results published by companies in the real-estate sector.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.

The FTSE/JSE Listed Property Total Return Index was up 16.79% for the year to date and up 44.49% from the fund's inception. The listed property market lost 3.39% for the month of June as a result of poor local economic data and negative sentiment in the market.

Prime interest rate was hiked by 50 basis points on the back of poor April economic data at the beginning of June. The May economic numbers also sent mixed signals with a bias towards a rate hike in the August Monetary Policy Committee ("MPC") meeting. Private sector credit extension (PSCE) rose by an annual rate of 24.84% in May slowing from 25.08% in April and below forecast of 25.6% which reflects a slowing consumer demand for credit, and with the implementation of the National Credit Act we expect a further slowdown of PSCE. The money supply broad measure M3, which often points to price pressures within the economy rose to 22.67% from 22.27%, but fell short of forecasts of 22.89%.

The Producer Price Inflation ("PPI") accelerated to 11.3% in May, the highest level in more than four years from 11.1% in April. The result was slightly higher than consensus and the adverse surprise was bigger than expected price increases in respect of manufactured food products and petroleum products. Consumer Price Index ("CPIX") accelerated to 6.4% in May from 6.3% in April. The target range is between 3% -6% and this confirms our view for a bias towards further monetary policy tightening.

The following counters were unchanged for the month; Octodec and Resilient, and the following counters adversely affected the overall performance with negative contribution in excess of 5%; Sycom, Siyathenga, Pangbourne, Hospitality B, Acucap and ApexHi B.

The property sector fundamentals are still positive with most counters reporting reduced vacancies, increased turnovers because of rental increases across the retail, industrial and commercial sectors, lower financing costs because of securitization and aggressive lending margins by the banks. This positive sentiment is reflected in the results published by companies in the real-estate sector. Recent result includes CBS Property Fund which declared a final distribution which was up 25% and the Net Asset Value (NAV) up 43%.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.

The FTSE/JSE Listed Property Total Return Index was up 15.73% for the year to date and up 39.21% from fund's inception. The listed property market peaked towards the end of February and corrected in line with jitters in the world markets on the back of growth concerns in the US (fuelled by sub prime mortgage market) and China (more concerns of economic tightening measures and growth in the US because the US is China's biggest trading partner) and lost 4% within the 1st week of March. The sector has since recovered and gained 5.06% in March.

However, CPIX (Consumer Price Index) inflation decelerated to 4.9% in February from 5.3% in January. The result was materially below consensus of 5.2%. The greater part of the pleasant surprise in the numbers came from food prices inflation which fell to 7.9% from 8.3% in February. The PPI (Producer Price Index) inflation also decelerated to 9.5% in February from 9.8% in January and was well below market expectations of 9.9%. The biggest contributor to the decline came from mining, manufactured food products and petroleum products. These positive results tilt the probabilities of further monetary tightening towards June Monetary Policy Committee Meeting than April.

The good news for the listed property market is that government finances have improved February with revenue growth of 30% exceeding expenditure growth of 23%. The fiscal surplus is estimated at 1.6% of Gross Domestic Product (GDP) and the Treasury is trying to avoid having to re-issue any debt to replace the R39 billion expiring.

The following counters contributed in excess of 5% to the overall performance of the fund, Hospitality B, Grayprop and ApexHi B. The following counters were negative for the month of Marc: Freestone, Pangbourne, Vukile, Emira and CBS (which has been subsequently sold).

The property sector fundamentals are still positive with most counters reporting reduced vacancies, increased turnovers because of rental increases across the retail, industrial and commercial sectors, lower financing costs because of securitization and aggressive lending margins by the banks. This positive sentiment is reflected in the results published by companies in the real-estate sector. Recent result includes Hyprop which declared a final distribution in December and was up 18.40% and the Net Asset Value up 34%.

The FTSE/JSE Listed Property Total Return Index was up 3,31% in December and up 20,29% from the Fund's inception date. The index gained 28,37% for the calendar year 2006. The MPC meeting during the month yielded another 50 basis points hike in the repo rate on the back of continued inflationary concerns as private sector credit extension continued to rise and the current account deficit provided cause for concern. The volatility in the currency and oil prices continue to weigh on the mind of the Reserve Bank governor, and will contribute to the above-mentioned factors in what Meago believes will be a further 50 basis point hike in February 2007.

The following counters contributed in excess of 5% to the overall performance of the fund, CBS Property Fund, Redefine, ApexHi B and Hyprop. Sycom (after reporting below average sector results) and Resilient contributed marginally negative to the performance.

The property sector fundamentals are still positive with most counters reporting reduced vacancies, increased turnovers because of rental increases across the retail, industrial and commercial sectors, lower financing costs because of securitization and aggressive lending margins by the banks. This positive sentiment is reflected in the results published by companies in the real-estate sector for the last six months. One of the counters that reported in December was Paramount with a 12% increase in distributions along with a similar increase in the net asset value. Another counter that reported in the month was CBS reflecting a strong 11,6% growth in distribution.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average