The Marriott Income Fund distributed 0.4687 cpu in September 2013. The portfolio is positioned to produce a relatively high income and includes cash deposits, corporate debt, preference shares and inflation linked bonds.

This conservative positioning is in line with our view that local markets are expensive and property and fixed interest bonds will only be reintroduced into the portfolio when yields are more appropriate. We are optimistic given recent market events that an opportunity to reinvest back into property and fixed interest bonds will present itself over the medium term which will significantly improve the income producing ability and return outlook for the fund.

The Marriott Income Fund distributed 0.4499 cpu in June 2013. The portfolio is positioned to produce a relatively high income and includes cash deposits, corporate debt, preference shares, inflation linked bonds and high yielding equities.

We continue to be of the opinion that inflation will remain elevated in light of the continued weakness of the Rand, coupled with broad-based inflationary pressures. We therefore maintain a 15% exposure to inflation hedging instruments such as inflation linked bonds and high yielding equities. These exposures have served investors well and have resulted in a 6.12% total return for the 12 months ended 30 June 2013.

The Marriott Income Fund distributed 0.4731 cpu in March 2013. The portfolio is positioned to produce a relatively high income and includes cash deposits, corporate debt, preference shares, inflation linked bonds and high yielding equities.

Despite South Africa experiencing the lowest interest rates in over 38 years, the fund's exposure to inflation hedging instruments such as inflation linked bonds and high yielding equities has served investors well and resulted in a 6.6% total return for the 12 months ended 31 March 2013. We continue to be of the opinion that inflation will remain elevated in light of the continued weakness of the Rand as well as increasing oil and food prices. We therefore maintain a 15% exposure to inflation hedging instruments. We look forward to re-investing in property and long bonds when the income streams are appropriately priced.

The Marriott Income Fund distributed 0.4837 cpu in December 2012. The portfolio is positioned to produce a relatively high income and includes cash deposits, corporate debt, preference shares, inflation linked bonds and high yielding equities.

2012 proved to be a challenging year for the fund, with money in the bank currently yielding approximately 4.5% - the lowest it has been for more than 38 years. Despite these low interest rates, however, the fund's exposure to inflation hedging instruments such as inflation linked bonds and high yielding equities has served investors well and resulted in a 7.63% p.a. increase in investment value over the period. We continue to be of the opinion that inflation will resume it's upwards trend in light of the continued weakness of the Rand as well as increasing oil and food prices and we therefore maintain a 15% exposure to inflation linked bonds and high yielding equities. We look forward to re-investing in property and long bonds when the income streams are appropriately priced.

The attached pie chart shows the current levels of these instruments. The target asset allocation is:

Floating rate corporate debt 10%
High yielding equities 5%
Listed preference shares 4%
Inflation linked bonds 10%
Cash 71%

It must be noted that the portfolio includes instruments that are priced in the market on a daily basis.