We foresee the local economy remaining buoyant during 2005, the rand stable and inflation within the range as targeted by the Reserve Bank. We expect the Reserve Bank to keep short term interest rates on hold for the remainder of 2005, mainly because we believe that the current strong private credit growth and consumer spending do not justify more cuts. However, we believe that if the rand remains relatively strong or at least stable and the oil price softens, the need for interest rate hikes may not arise in the current economic cycle at all, because inflation will then be easily contained. In such an environment short term interest rates may remain flat and start moving down again towards the end of 2006 or 2007. However, point in time a real inflation risk exists due to the high oil price, which moved consensus for an interest rate hike early in 2006.

Although the interest rate curve has started steepening in the 12 month area, it still remains relatively flat with little relative value to be found at any point along the curve. We are looking for value opportunities that are created by data announcements and surprises. We continue to actively avoid higher risk investments and invest only with Ai or better credit-rated counter parties. The fund is well positioned for the current interest rate environment and we are confident that the current outperformance of the Coris Capital Money Market Fund will continue.

We foresee the local economy remaining buoyant during 2005, the rand stable and inflation within the range as targeted by the Reserve Bank. We expect the Reserve Bank to keep short term interest rates on hold for the remainder of 2005, mainly because we believe that the current strong private credit growth and consumer spending do not justify more cuts. However, we believe that if the rand remains relatively strong or at least stable and the oil price softens, the need for interest rate hikes may not arise in the current economic cycle at all, because inflation will then be easily contained. In such an environment short term interest rates may remain flat and start moving down again towards the end of 2006 or 2007.

At present the interest rate curve remains relatively flat, with little relative value to be found at any point along the curve. We are looking for value opportunities that are created by data announcements and surprises. We continue to actively avoid higher risk investments and invest only with A1 or better credit-rated counterparties. The fund is well positioned for the current interest rate environment and we are confident that the current outperformance of the Coris Capital Money Market Fund will continue.