We believe the Sovereign debt crisis in Europe was finally arrested by the EU/IMF bailout packages, but global growth concerns have escalated and financial market uncertainty may remain in the shorter term. US growth, however, is becoming more self-sustainable, whilst the Chinese economy remains strong to the extent that they have installed policy restrains to contain possible inflation. The European crisis could result in interest rates remaining lower for longer globally. Locally, we foresee inflation to remain surprising on the positive (down) side and economic growth to remain below trend for the remainder of the year. The consensus is still for rates to have bottomed, but a further cut is not totally of table after the growth scare caused by the European crisis The yield curve remains steep and shaped normally, benefitting the fund's relative long and well positioned maturity profile. We shall therefore keep managing the fund's duration close to the maximum allowed in the short term. Liquidity wise the fund is furthermore well positioned to buy into value opportunities, which usually arise when liquidity squeezes during easing cycles. From a philosophy perspective we remain a fundamentally conservative fund manager and will continue to actively avoid extremely risky investments, and invest only in vanilla instruments with A1/F1 or better credit-rated counterparties. We are confident that the good long-term performance history of the Gryphon Money Market Fund is intact and our short term relative performance on a daily basis is amongst the top two. Performance volatility of the fund remains low; best in the industry.

We believe the global recovery is solid and will be maintained throughout 2010. The Greek crisis and Sovereign concerns in Europe, it seems, is finally to be resolved in a market friendly way. The local economy is still lagging the globe, but will eventually be pulled up by the strong global demand for commodities. The latest interest rate cut and lower food prices will all give relief to consumers and domestic demand should be turning positive soon. After the interest rate cut in March, it becomes much more difficult to call future Reserve Bank action and the yield curve has starting to flatten. The consensus is for rates to have bottomed, but a further cut is not totally out of the question. Although the yield curve has starting to flatten, it remains relatively steep and shaped normally, benefitting the fund's relative long and well positioned maturity profile. We shall therefore keep managing the fund's duration close to the maximum allowed in the short term. Liquidity wise the fund is furthermore well positioned to buy into value opportunities, which usually arise when liquidity squeezes during easing cycles. From a philosophy perspective we remain a fundamentally conservative fund manager and will continue to actively avoid extremely risky investments, and invest only in vanilla instruments with A1/F1 or better credit-rated counterparties. We are confident that the good long-term performance history of the Gryphon Money Market Fund is intact and our short term relative performance on a daily basis is amongst the top two. Performance volatility of the fund remains low; best in the industry.