The Absa Inflation Beater Fund has returned 9.1% p.a. for the 3 years to 31 August 2008, ahead of Headline CPI over this period of 8.4% p.a. and money market returns as measured by the STEFI of 8.9% p.a.

Persistently high food and oil prices, and inflation in the services sector, has kept CPIX out of the South African Reserve Bank's (SARB) target range for some time, and the SARB will continue to closely monitor the inflation situation. There is growing opinion that the interest rate tightening cycle may finally have reached a peak, with the lower oil price making the inflation outlook slightly less dire. The Rand weakened against the dollar in August - over the month, the Rand went from 7.32 against the Greenback to 7.69. However, the Rand strengthened against the Euro from 11.44 to 11.29, and against the Pound from 14.53 to 13.96.

August saw the All Share Index stay almost flat, though there was again variance in performance across the sectors. Resources continued their correction, with Basic Materials losing 3.7%, though Oil & Gas bounced by 7.6%. Telecomms lost 5.3% over the month, and on the positive side were Industrials (up 4.9%), Health (up 9.9%) and Consumer Services (up 8.2%).

At this point, the outlook for equity markets is still uncertain. In addition to equity risk stemming from international conditions - such as slowing economies in the developed world and the possibility of further turmoil in global credit markets - there is some uncertainty surrounding the economic fundamentals within South Africa. Consumers are still burdened with high levels of debt, the current account deficit may place further pressure on the Rand, and it appears that capacity problems (especially relating to electricity) may slow down mining and manufacturing growth. Furthermore, tighter monetary conditions and high oil prices are clearly slowing down consumer spending.

The Absa Inflation Beater Fund continues to be defensively positioned so as to minimize the risk of capital loss, while targeting a return in excess of inflation.

The Absa Inflation Beater Fund has returned 7.4% p.a. for the 3 years to 30 June 2008, in line with the Headline CPI over this period. Persistently high oil and food prices and inflation in the services sector has kept CPIX out of the South African Reserve Bank's (SARB) target range for some time, and the SARB will continue to closely monitor the inflation situation. The Rand has weakened substantially over the past number of months, and continued its descent against other major currencies in June - over the month, the Rand went from 7.60 against the US dollar to 7.83, also weakening against the Euro from 11.83 to 12.33 and against the Pound from 15.04 to 15.61. June was a tough month for equities, with the All Share Index losing over 4% for the month. Some of the sectors that were particularly hammered included Telecommunications (-15.2%), Technology (-11.7%), Consumer Goods (-10.3%) and Industrials (-9.6%). Financials were once again on the negative side in June, losing a further 10%. At this point, the outlook for equity markets is still uncertain. In addition to equity risk stemming from international conditions - such as slowing economies in the developed world and the possibility of further turmoil in global credit markets - there is some uncertainty surrounding the economic fundamentals within South Africa. Furthermore, the current account deficit may place further pressure on the Rand, and it appears that capacity problems (especially relating to electricity) may slow down mining and manufacturing growth. Furthermore, tighter monetary conditions and high oil prices are clearly slowing down consumer spending. However, after substantial decline sin share prices, good long term value is starting to emerge in selected stocks. The Absa Inflation Beater Fund continues to be defensively positioned so as to minimize the risk of capital loss, while targeting a return in excess of inflation.

The Absa Inflation Beater Fund has returned 9.0% p.a. for the 3 years to 31 March 2008, exceeding the Headline CPI over this period of 6.5%.

Persistently high oil and food prices and inflation in the services sector has kept CPIX out of the South African Reserve Bank's (SARB) target range for some time, and the SARB will continue to closely monitor the inflation situation. The Rand continued to weaken in March - over the month, the Rand weakened against the US dollar from 7.75 to 8.09, against the Euro from 11.88 to 12.79 and against the Pound from 15.41 to 16.03.

Equity markets came off somewhat in March after their very strong rally in February, with the All Share Index losing just over 3% for the month. Bond returns were again negative in March, with the ALBI weakening by 0.53%. The yield curve continues to be somewhat inverted. Despite expectations of further rises in money market rates, bond yields have remained low, mainly because of a shortage of supply of government bonds.

At this point, the outlook for equity markets is still uncertain. In addition to equity risk stemming from international conditions (particularly turmoil in world credit markets and the related banking fallout), there is some uncertainty surrounding the economic fundamentals within South Africa. Political change brings uncertainty, the current account deficit may place further pressure on the Rand, and it appears that capacity problems (especially relating to electricity) may slow down mining and manufacturing growth. Furthermore, tighter monetary conditions are clearly slowing down consumer spending.

The Absa Inflation Beater Fund continues to be defensively positioned so as to minimize the risk of capital loss, while targeting a return in excess of inflation.

The Absa Inflation Beater Fund returned 0.7% for the month, in line with its objective of steady returns in excess of inflation over time. For the 3 years to 31 March 2007, the Fund's investors earned 6.4%, exceeding the most recent inflation figure of 6.1%. The South African share market enjoyed a good month, while the bond market recorded a loss. The Rand weakened against the US dollar from 7.24 to 7.27 during the month. Against Sterling the Rand weakened from 14.21 to 14.34 over the month, and against the Euro from 9.56 to 9.69.

The major drivers of the stock market over the next few months will be the size and frequency of interest rate hikes by the SA Reserve Bank, as well as the movement in the Rand exchange rate and prices for South African major commodity exports.

The Fund has invested in a foreign currency asset in order to provide some protection from any currency weakness.

The Absa Inflation Beater Fund is defensively positioned so as to minimize the risk of capital loss, while targeting a return in excess of inflation.