Following the Sep 11 attacks and the decision by central banks in most regions to cut interest rates the SARB followed and cut the repo rate by 0.5%. The weakness in the Rand is still cause for concern and the SARB is likely to take action in an attempt to halt the slide.

The Association of Unit Trusts has changed the definition of Domestic Fixed Interest Income unit trust funds, this change has knock on effects for both the Hybrid Income and Other Income categories. The change means that income funds can no longer hold property loan stocks or property unit trusts in their portfolio.

All funds classified as income funds were given the opportunity to remove these stocks from their portfolio however the Marriott Income Fund opted to be reclassified instead. The fund now forms part of the Domestic Fixed Interest Other Income category as from the 1st September 2001. The fund will carry its performance history forward.

If you are looking for a low risk investment with a higher income than a money market fund then the Marriott Income Fund should appeal to you. The higher yield of 11.6% is achieved through investment into longer-dated fixed interest securities with a maximum average maturity of two years as well as property trusts and loan stocks.

These assets add the potential for modest capital gains if interest rates fall but if interest rates rise then there is also the possibility of losses.

Marriott Income Fund (MIF) has combined fixed-interest bonds, cash and other high-yielding assets to generate a 15.4%/year return after costs since April 1998. A small 2% increase in MIF's unit price over this period indicates that almost all of the return was of a taxable nature. With a current income yield of 12.1%, MIF provides a relatively safe, high-yielding refuge for investment funds. But there is always a trade-off to be considered between lower risk and tax-free dividend income which, given current market risk levels, probably favours MIF.