The Fund returned 0.7% for the month.

CPIX inflation for the year to August 2007 improved to 6.3% from 6.4% in July 2007. This was largely in line with market consensus. Even though inflation improved compared to the previous month, it is still above the upper 6% limit of the SARB target range. Higher food and fuel prices remain the primary reasons for the high inflation numbers.

Producer price inflation was better than expected at 9.4%, down from 10.4% in June. Bearing in mind that there tends to be a lag between trends in PPI and CPIX figures, this could well be positive for future CPIX data releases. Indeed, following the announcement of the better than expected PPI number, the forward rate agreement curve dropped - for example the interest rate on threemonth deposits in three months' time dropped 0.1%.

The next Monetary Policy Committee meeting of the Reserve Bank will be held in October 2007.

The Money Market Fund currently invests in a variety of investments. The maturities range from one day (overnight money) to no greater than 365 days. Investments in longer-dated instruments would require sufficient yield pick up over short-dated maturities. The Fund is only exposed to F1-rated (highest rating) instruments with no exposure at all to F2-rated instruments.

Based on the forward rate agreement (FRA) curve the market expects interest rate cuts during 2008 as reflected below.

CPIX inflation for the year to May 2007 increased to 6.4% (6.3% in April 2007) again breaching the upper 6% limit of the inflation target and also slightly higher than the consensus forecasts. PPI inflation continued to rise, printing at 11.3% for the year to May 2007 (11.1 % in April 2007).

Transport costs due to fuel price increases and food price inflation were cited as being the primary contributors to the increase in the current inflation rate. The recent wage settlements in the public service sector may also result in further inflationary pressures in the months ahead. The general view appears to be that inflation will remain at the upper end of the inflation target range for much of the remainder of 2007. The next Monetary Policy Committee meeting of the Reserve Bank will be held in August 2007.

The year-on-year private sector credit extension to May 2007 decreased to 24.8% compared to the year-on-year growth to April 2007 of 25.1 %. This was slightly below expectations of 25.4%, but still remains a high number and a concern to the SARB. The growth in M3 money supply for the year to April 2007 rose to 22.67% compared to the previous month of 22.3%.

The Money Market Fund is currently invested in a variety of investments with maturities ranging from one day (overnight money) to no greater than 365 days. The average maturity is under now under 60 days, meaning that the Fund takes less than two months to fully price in any rate increase.

The year-on-year change for CPIX inflation came in below consensus forecasts at 4.9%, down from the 5.3% of the previous month. PPI printed well below market forecasts at 9.5%, also down from the 9.8% of the previous month. Both CPI and PPI numbers were driven by lower food and oil prices, although this may only be a temporary reprieve given the expectation of increases in the pipeline for both categories.

Growth in both money supply (M3) and in private sector credit extension (PSCE) was above consensus forecasts, leaving the market more uncertain as to the direction of interest rates at the next Monetary Policy Committee meeting in April.

The Money Market Fund is currently investing in a variety of investments that have maturities ranging from one day (overnight money) to 12 months, dependent on the amount of yield enhancement on offer for longer-dated deposits. The average maturity of the Fund remains just above 80 days.

The FRA curve currently shows some potential for rate increases in the near future, but then forecasts rate cuts in 2008.

As from next month the Total Expense Ratio (TER) will be published.

At the December Monetary Policy Committee (MPC) meeting, the MPC announced a 50 basis point rate hike thereby increasing the repo rate to 9.00%. This increase was in line with consensus expectations, but there is more debate about the outcome for the next M PC meeting in February. Interestingly, the current forward rate curve (see below) is expecting rates to be on hold at the next meeting in February.

CPIX and PPI for the month of November held steady at 5% year-on-year and 10% year-on year respectively, both slightly below consensus expectations. Growth in money supply (M3) and particularly private sector credit extension (PSCE) however remain high and this will be of ongoing concern to the MPC.

The Money Market Fund is currently invested in a variety of investments that have maturities ranging from 1 day (overnight money) to 12 months. Currently there is a significant amount of yield enhancement on offer for longer dated deposits, with the average maturity of the Fund at about 80 days. As rates rise so the yield on the Fund will rise in tandem, taking about two and a half months to fully reprice an increase in interest rates in the market.