Distribution
The quarterly distribution declared at the end of September was 18.4373 cents per unit, a 10% increase from the 2nd quarter's distribution of 16.7353 cents per unit and 13.5% higher than 2003's third quarter distribution of 16.2352 cents per unit. The total distribution for 2003 of 62.8586 cents per unit was 14.2% higher than 2002's distribution of 55.0331 cents per unit. Over the last 5 years the proportion of distributions contributed by dividends has increased steadily and is now over 90%. This proportion has changed due to short-term interest rates dropping and an attempt over the last year to minimise the cash held in the fund (in order to lower the interest earned and increase the predictability of distributions). Since short-term interest rates have been above the dividend yield of the fund, the recent decreases in money market rates combined with lowering the proportion of cash held in the fund has adversely affected the growth in distributions over the last 1½ years. These changes have now been largely completed and the quarterly growth rate has increased as a result. Over the last 3 years the Marriott Dividend Growth Fund has grown distributions by 14.5% per annum, slightly higher than our medium term expected average future growth rate of 10-12% per annum.

Future Income
The recovery of the rand has resulted in many companies showing foreign exchange losses and it is principally for this reason that the All Share index barely showed any dividend growth last year despite an otherwise good performance by most companies. (The Dividend Growth Fund was not affected to the same extent due to its much smaller exposure to commodity producers and other companies with significant offshore revenues). South Africa's long-term growth trend still looks positive, with productivity growing, global growth under way and the Rand expected to weaken, and so the fund manager's would expect the average company to grow its dividend this year. At current levels the broad equity market looks undervalued relative to bonds and fairly valued relative to its historical average rating. The fund manager's still believe financial and industrial companies to be far more attractively priced than resource companies and that there is the potential for a further rerating among the companies the fund owns. The long-term investor should find equities attractive at these levels, as the after-tax income from an equity portfolio should overtake that available from other asset classes in a relatively short time. For private investors in the upper tax brackets the (tax exempt) dividend income available from many solid blue-chip companies already matches or exceeds their after-tax return on cash, and this gap will increase as dividends grow.

Capital
At current levels equities look undervalued relative to bonds and fairly valued relative to their historical average rating. Total returns from the fund over the next 5 years are expected to be approximately 15% per annum. This forecast is based on an initial income yield of 3.9%, annual growth in income of 10%-12% and no significant change in rating. With reasonable economic growth, this expected total return is realistic and achievable.

Distribution
The quarterly distribution declared at the end of June was 16.7353 cents per unit, an increase from the fourth quarter's distribution of 16.2805 cents per unit and 13.8% higher than 2003's first quarter distribution of 14.3329 cents per unit. The total distribution for 2003 of 62.8586 cents per unit was 14.2% higher than 2002's distribution of 55.0331 cents per unit. Over the last 3 years the Marriott Dividend Growth Fund has grown distributions by 14.5% per annum, slightly higher than the funds medium term expected average future growth rate of 10-12% per annum.
Future Income
The recovery of the rand last year resulted in many companies showing foreign exchange losses and it is principally for this reason that the All Share index barely showed any dividend growth last year despite an otherwise good performance by most companies. (The Dividend Growth Fund was not affected to the same extent due to its much smaller exposure to commodity producers and other companies with significant offshore revenues). South Africa's long-term growth trend still looks positive, with productivity growing, global growth recovering and the rand expected to weaken, and so the fund manager's would expect the average company to grow its dividend this year. At current levels the broad equity market looks undervalued relative to bonds and fairly valued relative to its historical average rating. The fund manager's still believe financial and industrial companies to be more attractively priced than resource companies and that there is the potential for a further rerating among the companies in the fund.
The long-term investor should find equities attractive at these levels, as the after-tax income from an equity portfolio should overtake the income from other asset classes in a relatively short time. For private investors in the upper tax brackets the (tax exempt) dividend income available from many solid blue-chip companies already matches or exceeds their after-tax return on cash, and this gap will increase as dividends grow.
Capital
At current levels equities look undervalued relative to bonds and fairly valued relative to their historical average rating. Total returns from the fund over the next 5 years are expected to be approximately 14% per annum. This forecast is based on an initial income yield of 4.0%, annual growth in income of 10%-12% and no significant change in rating. With reasonable economic growth, this expected total return is realistic and achievable.

Distribution
The quarterly distribution declared at the end of March was 16.3131 cents per unit. The total distribution for 2003 of 62.8586 cents per unit was 14.2% higher than 2002's distribution of 55.0331 cents per unit. Over the last 3 years the Marriott Dividend Growth Fund has grown distributions by 14.5% per annum, slightly higher than our medium term expected growth rate of 10% - 12% per annum.

Future Income
The recovery of the Rand last year resulted in many companies showing foreign exchange losses and it is principally for this reason that the All Share Index barely showed any dividend growth last year despite an otherwise good performance by most companies. (The Dividend Growth Fund was not affected to the same extent due to its much smaller exposure to commodity producers and other companies with significant offshore revenues). South Africa's long-term growth trend still looks positive, with productivity growing, global growth recovering and the Rand expected to weaken, and so we would expect the average company to grow its dividend this year. At current levels the equity market looks undervalued relative to bonds and fairly valued relative to its historical average rating.
The long-term investor should find equities attractive at these levels, as the after-tax income from an equity portfolio should overtake that available from other asset classes in a relatively short time. For private investors in the upper tax brackets the (tax exempt) dividend income available from many solid blue-chip companies already exceeds their after-tax return on cash, and this gap will increase as dividends grow.

Capital
At current levels the equity market looks undervalued relative to bonds and fairly valued relative to its historical average rating. Total returns over the next 5 years are expected to be between 15% - 20% per annum. This forecast is based on a 3.7% initial income yield, annual growth in income of 10%-12% and a yield in 5 years time of 3%. With reasonable economic growth, this expected total return is realistic and achievable.

Distribution
The December 2003 quarterly distribution amounted to 16.2805 cpu, an increase from the third quarter's distribution of 16.2352 cents per unit. This brings the total distribution for 2003 to 62.8586 cents per unit, growth of 14% over 2002's distribution of 55.0331 cpu. Over the past three years, the Marriott Dividend Growth Fund has grown distributions by 15% per annum, slightly higher than the funds medium term expected growth rate of 10-12% per annum.

Future Income
The recovery of the rand has resulted in many companies showing foreign exchange losses and it is principally for this reason that the All Share index is not expected to show any significant dividend growth - in fact, a small decline may occur if the rand remains at current levels. The Dividend Growth Fund has not been affected to the same extent due to its much smaller exposure to commodity producers and other companies with significant offshore revenues. These foreign exchange translation losses mask an otherwise good performance by many financial and industrial companies. Inflation is falling and interest rates have followed as the high real rates, sluggish global economy and recovering rand led to a cyclical slowdown in South African economic growth. South Africa's long-term growth trend still looks positive, with productivity growing, signs of a recovery in global growth appearing and the rand unlikely to maintain its current strengthening indefinitely.

The long-term investor should find equities attractive at these levels, as the after-tax income from an equity portfolio should overtake that available from other asset classes in a relatively short time. For private investors in the upper tax brackets the (tax exempt) dividend income available from many solid blue-chip companies already exceeds after-tax returns on cash, and this gap will increase as dividends grow and interest rates drop.

Capital
At current levels the equity market looks undervalued relative to bonds and fairly valued relative to its historical average rating. Capital growth should be driven by increased earnings (and therefore dividends), with little change in rating expected. The Dividend Growth Fund is expected to deliver an annual total return of about 12% - 14% over the next five years.