The Marriott Core Income Fund distributed 2.4010 cpu and produced a total return of 5.4% for the year ending 30 September2014.

Looking ahead the fund continues to be positioned to assist retired investors who need a high level of income during this protracted period of low interest rates, whilst not exposing investors to unwarranted capital risk. The fund's 8.5% income yield has been achieved by including high yielding bank deposits (premium NCDs) with a known capital loss. Without these instruments the fund's yield would be comparable to money market rates. This is in line with our return expectation for the fund. As things stand, 5.75% is the expected money market return over the next 12 months, however, it is anticipated that there will be additional rate increases in the year ahead.

The 75bps increase in interest rates this year will benefit investors as cash, preference shares and floating corporate debt (approximately 85% of the portfolio) will all produce higher levels of income. Consequently, as interest rates rise, returns will increase and the fund's allocation to premium NCDs will gradually be reduced. Exposure to high quality floating corporate debt has also been increased since the beginning of the year which will further enhance the income producing ability of the fund. Significantly, the potential for reinvesting back into bonds and property over the medium term has increased as yields remain under pressure. Taking advantage of this opportunity will allow investors to secure higher yields which remains the fundamental long term strategy of the fund.

Notwithstanding the improved outlook, we continue to urge capital sensitive investors to draw a money market related rate and to re-invest the excess income to ensure capital stability during this period of low interest rates and volatile markets. For investors who require a higher level of income, the capital loss will be predictable and can therefore be managed sensibly.

Regarding the credit exposure in the fund It is important to note that all debt held is with quality companies that pay reliable dividends. This is important as companies that are able to pay dividends are certainly able to meet debt obligations. The fund's cash exposure is also only invested in the five major banking institutions, ensuring the lowest possible risk for our investor.

The Marriott Core Income Fund distributed 2.4077cpu and produced a total return of 5.7% for the year ending 30 June 2014. This return exceeded money market returns despite the conservative positioning of the portfolio.

Looking ahead the fund continues to be positioned to assist retired investors who need a high level of income during this protracted period of low interest rates, whilst not exposing investors to unwarranted capital risk. The fund's 8.4% income yield has been achieved by including high yielding bank deposits (premium NCDs) with a known capital loss. Without these instruments the fund's yield would be comparable to money market rates. This is in line with our return expectation for the fund. As things stand, 5.5% is the expected money market return over the next 12 months, however, it is anticipated that there will be additional rate increases in the year ahead. Approximately 85% of the portfolio will benefit from rising interest rates. Consequently, as interest rates rise the fund's allocation to premium NCDs will gradually be reduced.

The potential for reinvesting back into bonds and property over the medium term has also increased substantially as yields remain under pressure due to the withdrawal of monetary stimulus in the US. Taking advantage of this opportunity will allow investors to secure higher yields to fund their retirement. This is the fundamental long term strategy of the fund.

Notwithstanding the improved outlook, we continue to urge capital sensitive investors to draw a money market related rate and to re-invest the excess income to ensure capital stability during this period of low interest rates and volatile markets. For investors who require a higher level of income, the capital loss will be predictable and can therefore be managed sensibly.

The Marriott Core Income Fund distributed 2.4011 cpu and produced a total return of 4.14% for the year ending 31 March 2014. Although this return was below that of money market returns it was better than the 0.6% total return of the RSA All Bond Index over the corresponding period. Fixed interest bonds remain under pressure as the US Federal Reserve continues to "taper" or reduce the size of the bond-buying program known as quantitative easing. It is anticipated that as this form of monetary stimulus is withdrawn in 2014 fixed interest bond and property yields will continue to rise. The fund's high cash balance will protect investors from further capital volatility and afford investors the opportunity to reinvest back into these asset classes when yields have fully adjusted to an investment landscape without quantitative easing..

Looking ahead the fund continues to be positioned to assist retired investors who need a high level of income during this protracted period of low interest rates, whilst not exposing investors to unwarranted capital risk. The fund's 8.4% income yield has been achieved by including high yielding bank deposits (premium NCDs) with a known capital loss. Without these instruments the fund's yield would be comparable to money market rates. This is in line with our return expectation for the fund. As things stand, 5.5% is the expected money market return over the next 12 months, however, it is anticipated that there will be additional rate increases in the year ahead. Approximately 85% of the portfolio will benefit from rising interest rates. Consequently, as interest rates rise the fund's allocation to premium NCDs will gradually be reduced. The potential for reinvesting back into bonds and property over the medium term has also increased substantially. Taking advantage of this opportunity will allow investors to secure higher yields to fund their retirement. This is the fundamental long term strategy of the fund.

Notwithstanding the improved outlook, we continue to urge capital sensitive investors to draw a money market related rate and to re-invest the excess income to ensure capital stability during this period of low interest rates and volatile markets. For investors who require a higher level of income, the capital loss will be predictable and can therefore be managed sensibly.

The Marriott Core Income Fund produced a total return of 4.05% for 2013. Although this return was below that of money market returns it was better than the 0.6% total return of the RSA All Bond Index. In 2012 the performance of inflation linked bonds, equities and preference shares improved the total return of the fund. This year inflation linked bonds (15% exposure) have been impacted by the recent volatility in bond markets stemming from the decision of the US Federal Reserve to "taper" - or reduce - the size of the bond-buying program known as quantitative easing. The program, which is designed to stimulate the economy, has served the secondary purpose of supporting financial market performance in recent years - particularly the global bond market. It is anticipated that as this artificial support is withdrawn in 2014 fixed interest bond and property yields will continue to rise. The fund's high cash balance will protect investors from further capital volatility and afford investors the opportunity to reinvest when yields have fully adjusted to an investment world without quantitative easing. The current yield of inflation linked bonds of approximately 1.6% combined with continued inflationary pressures, still warrants the inclusion of this asset class in the portfolio.

Looking ahead the fund continues to be positioned to assist retired investors who need a high level of income during this protracted period of low interest rates, whilst not exposing investors to unwarranted capital risk. The fund's 8% income yield has been achieved by including high yielding bank deposits (premium NCDs) with a known capital loss to the fund of approximately 3%.

We are optimistic now that the "tapering" process has begun that an opportunity to reinvest back into property and fixed interest bonds will present itself over the medium term. This will significantly improve the income producing ability and return outlook for the fund. In the interim we continue to urge capital sensitive investors to draw a money market related rate and to re-invest the excess income to ensure capital stability during this period of low interest rates and volatile markets. For investors who require a higher level of income, the capital loss will be predictable and can therefore be managed sensibly.