The Marriott Global Income Growth Feeder Fund has changed its name to the Marriott International Growth Feeder Fund on 06/11/2008.

Portfolio Review
o Inflation protected bond exposure maintained at around 10% overall.

o AAA-rated conventional bonds increased and exposure also maintained at 10%.

o Equities now approximately 71% of the total.

o Recent increase in US weighting with selective purchases of AT&T, Pfizer, General Electric, US Bancorp and Du Pont. Severn Trent added in the UK.

o Defensive sectors still generally preferred, including Energy, Utilities, Tobacco and Telecoms.

o No real estate exposure in portfolio.

o Yield Comparison at 31 August 2008:
· MIIGF 4.75%
· Yield target 2.89% (JPM Global Gov Bond 3.39%, S&P 500 2.38%)
· US CPI 5.6% year-on-year (2.5% excluding Food and Energy)

Equity Market Review

o August saw continued volatility in the main equity indices, albeit on reduced volumes. Broad indices in Europe and the US moved modestly higher in local currency terms, although the UK saw a more meaningful gain of 5%. The banking stocks generally held on to the gains seen in July, although sentiment remained relatively fragile. Commodity stocks were more mixed, with oil holding reasonably firm, whilst the miners generally experienced profit taking.

o Outside of Europe and the US, the recent bearish tone continued. Japan, for example, fell 3.6% in yen terms, whilst the broad Pacific Basin and emerging market indices declined, in local currency terms, by 1.7% and 4.8% respectively.

o In August, the dollar built up an impressive head of steam. The US currency moved 6% higher against the euro, whilst against a generally weak sterling the gain was more than 8%. This left continental European and UK equity markets down between 3% and 4% on a US dollar adjusted basis. The higher US dollar also contributed to a decline in both oil and gold during the month.

o The conflicting forces of higher inflation and low growth prospects still remain. Economic data suggests a continued slowdown in Europe, although in the US recent Q2 preliminary GDP figures were surprisingly robust at 3.3%. However, this may prove to be temporary as growth has been spurred by exports which could soften if the US dollar continues to strengthen. On the positive side, the lower crude oil and commodity prices bode well for future inflationary expectations.

o Weakening oil prices have improved sentiment towards equities in general and this might help to fuel a modest rally in the next couple of months. However, problems in the banking sector remain a significant hurdle to recovery, and so any rally may be modest unless there are signs of a genuine turnaround in global economic activity.

Bond Market Review

o August extended the rally begun in July for government bond markets as further softening of crude oil prices and other commodities eased inflationary pressure in major economies.

o Both energy and food costs have risen substantially over the course of the year to date and the outlook for inflation therefore will remain an area of concern, but the easing of inflation pressure from raw material costs will permit central banks to keep interest rates low to promote growth.

o US GDP growth improved in Q2, but remains lacklustre overall. The Federal Reserve therefore looks likely to keep rates on hold through the presidential election in the absence of a renewed rise in commodity prices.

o The European Central Bank is also likely to keep rates on hold following its July hike as German Q2 GDP growth slows, suggesting the peak of the interest rate cycle may have been reached with scope for bond yields to contract from here, albeit moderately.

o UK interest rates remained on hold in August, but Gilts rallied despite poor inflation data as the Bank of England's Inflation Report was sanguine on the outlook for inflation over the coming year. UK interest rate expectations have declined as a result and a cut in November now looks a distinct possibility as the domestic UK economy weakens.

o Increased risk of recession, particularly in the UK and some European markets, provides a difficult backdrop for credit markets as default risks increase at times of economic weakness. Accordingly credit spreads have remained at wide levels.

Portfolio Review

· Inflation protected bond exposure maintained at around 10% overall
· AAA-rated conventional bonds increased and exposure also maintained at 10%
· Equities now approximately 68% of the total
· Recent increase in UK weighting with selective purchases of Barclays, Lloyds, HSBC and United Utilities
· Defensive sectors still generally preferred, including Energy, Food Producers, Tobacco and Utilities
· No real estate exposure in portfolio
· Yield Comparison at 30 June 2008:
o MIIGF 4.97%
o Yield target 3.02% (JPM Global Gov Bond 3.67%, S&P 500 2.38%)
o US CPI 4.2% year-on-year (2.3% excluding Food and Energy)

Equity Market Review
· The Spring equity market rally came to an abrupt end in June as inflation worries resurfaced. In local currency terms, European equity markets o slumped 11.1%, whilst the US fell 8.4%, which was its worst June since the Great Depression. In relative terms, the UK held up better, slipping 7.1%, helped by the heavyweight mining and oil sectors. The US dollar saw modest weakness in June, retreating just over 1% and 0.5% against the euro and UK pound sterling respectively
· In the face of this bearish sentiment, few sectors remained unscathed. However, with oil prices making new highs and other metals holding on to most of their gains, the commodity stocks retained market leadership. Financial stocks, on the other hand, remained under pressure as further write-downs and continued additional capital raising by a number of major institutions subdued potential bargain hunting. In the US, technology, commodity, materials and export-related stocks continued to outperform on a relative basis, but many of these also showed signs of strain by the end of June
· Outside of housing and construction, US economic data has remained relatively resilient. The final Q1 GDP number came in at 1.0% (from a provisional upward revision of 0.9%) and it is still hoped that Federal Reserve stimulus, to date, will begin to have a positive impact by late Q3 2008
· The Federal Reserve now seems to have joined the European Central Bank and the MPC in seeing inflation as the primary threat. With headline CPI now over 4%, the markets are beginning to build in potential interest rate increases. Given the still fragile state of the economy, we believe the Fed will move cautiously, but even so, the target rate may rise by 0.25% in the second half of the year. In Europe, headline inflation has continued to edge higher, suggesting that the ECB will be the most pro-active in raising rates. The UK may be less inclined to increase base rates in the short term, but inflation could remain stubbornly high for longer than originally anticipated. In this environment, markets fear that rising inflation coupled with insipid economic growth could lead to an phenomenon not seen since the 1970s (namely a milder form of 'stagflation')

Bond Market Review
· June has seen some consolidation in most bond markets as heightened expectations for interest rate increases ebbed towards month-end as risks of a potential recession increased, albeit yields still edged higher in most major markets for the month as a whole
· The principal upward driver of yields has been further evidence of mounting inflation pressure, particularly in the UK and Europe, together with a perception that the US economy may avoid going into recession
· Despite some moderation from record high prices towards month-end, both energy and food costs have risen substantially and the outlook for inflation therefore will remain a key concern for central banks in coming months
· The European Central Bank has sent a clear signal of intent to increase interest rates at their 3 July meeting. This is not necessarily indicative of a series of rate hikes as currently implied by money market yields, however, but rather appears initially intended as a signal of their inflation vigilance to ward off higher pay claims
· Interest rates look to be on hold in the US in the near term, but money market yields anticipate a rate rise in both prior to year-end. Despite housing and consumer data remaining weak, the Bank of England may hike rates in Q3 as inflation looks likely to breach its 3% target ceiling for much of 2008
· Increased fears of recession, particularly in the UK and some European markets provides a difficult backdrop for credit markets as default risks increase at times of economic weakness

Portfolio Review
o Inflation Protected Bonds increased in UK, US and Europe. Exposure maintained at 10% exposure overall
o AAA rated conventional bonds increased and exposure also maintained at 10%.
o Cash has been allowed to build since the end of the third quarter, as the portfolio remained defensively positioned. Equities now approximately 62% of the total.
o Some scope to now add selectively to equities in early 2008 after market weakness. Recent increase in US weighting with purchase of AT&T and Spectra.
o Defensive sectors preferred, including Energy, Food Producers, Tobacco and Utilities.
o No real estate exposure in portfolio.
o Yield Comparison at 31 March 2008:
o MIIGF 4.27%
o Yield target 2.72% (JPM Global Gov Bond 3.15%, S&P 500 2.29%)
o US CPI 4.3% y-o-y (2.3% ex Food & Energy)

Equity Market Review
o March saw markets head generally lower after a steadier February. The US, ironically, suffered less in local currency terms. The strong euro meant that European markets delivered a positive return in USD terms.
o Equity markets remain wary of US sub-prime contagion and mounting evidence of a sharp slowdown in US economic activity.
o Data shows further softening in the US and recession now a given. Extent and duration still uncertain and the Federal Reserve has made it clear that it is prepared to do what is necessary to support the financial system. Bail out of Bear Stearns may prove to be a watershed.
o Weaker dollar exacerbates concerns over headline inflation, especially in the US, but core inflation is still contained. In the UK, the Bank of England warns that inflation could still breach the 3.0% ceiling in 2008. The ECB also remains focused on fighting inflation.
o Results to date generally more positive than anticipated and valuations pricing in a slowdown in earnings. Non-financial results have exceeded forecasts on average, but scope for equity market rally is capped by ongoing credit market woes. First quarter US corporate earnings reporting season begins in earnest in the next few weeks.
o UK and European Bank results provide some reassurance and dividend increases have been seen in most cases, but outlook for 2008 will be challenging as economies slow.

Bond Market Review
o Government bond markets benefit from poor US economic data, indicating increased risk of recession. Flight to safety benefits government and ultra-high grade issues, but corporate spreads initially widen as caution remains over extent of impact from sub-prime sector and credit crunch, before this starts to reverse during the second half of the month.
o US Federal Reserve continues to be flexible and proactive in response to threats to broader economy - January cuts were followed by a further 75bp cut in March. Huge amounts of liquidity also pumped into the system to unfreeze credit markets. Fed rates have now fallen to 2.25% from 5.25% and a likely further reduction of 50bp towards the end of April is now priced in as data remains soft.
o Rapid US interest rate cuts leads to very steep yield curve. US two-year note yield falls to 1.8%, implying further rate cuts to come, but 10y yield of 3.6% indicates inflation expectations to return thereafter.
o High yield sector remains under pressure and spreads remain wide as extent of economic slowdown uncertain. Some value is starting to emerge. Corporate spreads peak in mid March but bail out of Bear Stearns triggers a marked narrowing over the following two weeks.
o Recent bond purchases all rated AAA to benefit from safe haven buying.
o UK Gilts hampered as increased inflation pressures limits scope for interest rate cuts from the Bank of England and yield curve disinverts. Nevertheless, expectations of a further 25bp cut have increased and this may be at the next meeting in mid-April rather than May.
o European rates on hold as ECB reiterates hawkish bias ahead of annual wage rounds, but market anticipates easing will be required as economies slow later in the year.
o Interbank rates had stabilised, but 3-month Libor begins to rise again, despite relatively reassuring annual results from the major banks.

Investments will be denominated in US dollars, euros and sterling.

Portfolio Review

-Inflation Protected bonds increased in UK, US and Europe. Exposure maintained at 10% exposure overall
-AAA rated conventional bonds increased and exposure also maintained at 10%
-Cash has been allowed to build since the end of the third quarter as the portfolio remained defensively positioned. Equities now less than 60% of the total
-Some scope to now add selectively to equities in early 2008 after market weakness. Recent increase in US weighting with purchase of AT&T and Spectra
-Defensive sectors preferred, including Energy, Food Producers, Tobacco and Utilities
-No real estate exposure in portfolio
-Yield Comparison at 31 January 2008:
MIIGF 4.28%
Yield target 2.66% (JPM Global Gov Bond 3.23%, S&P 500 2.08%)
US CPI 4.1% y-o-y (2.4% ex Food & Energy)

Equity Market Review

-January proved to be a difficult month for equities, although a late rally pared some of the losses on aggressive US Federal Reserve action and proposed $150-billion fiscal package
-Equity retreat sparked by renewed concerns over US sub-prime contagion and mounting evidence of a marked slowdown in US economic activity
-GDP growth in the US slows from 4.9% annualised in third quarter 2007 to 0.6% annualised in fourth quarter. Data in January suggests the economy might already be experiencing negative growth, although some reports are still ambivalent. ISM Manufacturing, for example, came in at 50.3 versus 47.3 expected, which is consistent with underlying growth of around 1.0%
-Headline inflation remains a concern, especially in the US, but core inflation is still contained. In the UK, the Bank of England warns that inflation could still breach the 3.0% ceiling in 2008. The ECB also remains focused on fighting inflation
-Signs of a rapid economic slowdown pushes the Fed into an emergency rate cut of 0.75%, followed by a further 0.5% at its January meeting. The discount rate is also cut by the same amount. In the UK and Europe, interest rates are kept on hold
-Despite the concerns surrounding US growth, the declines in equities are more pronounced in Europe, the Far East and emerging markets.

Bond Market Review

-Government bond markets benefit from poor US economic data, indicating increased risk of recession. Flight to safety benefits government and ultra high grade issues, but corporate spreads widen as caution remains over extent of impact from sub-prime sector and outlook for monoline bond insurance company ratings deteriorates
-Fed promises flexible and proactive response to threats to broader economy 75bp emergency cut in rates on 22 January followed by a further 50bp cut in January. Further moves likely in March as employment data weakens and ISM surveys subdued
-Rapid US interest rate cuts leads to steeper yield curve as US two-year note yield falls to 2%, implying further rate cuts to come, but 10y yield of 3.6% indicates inflation expectations to return thereafter
-High yield sector likely to remain under pressure and spreads wide as extent of economic slowdown uncertain.
-Recent bond purchases all rated AAA to benefit from safe haven buying.
-UK Gilts underperform due to lack of an early cut from the Bank of England and further yield curve disinversion. High likelihood of further 25bp cut on 7 February, although potential inflation pressure from Food and Energy costs may limit ultimate extent of cuts
-European rates on hold as ECB reiterates hawkish bias ahead of annual wage rounds, but market anticipates easing will be required as economies slow later in the year
-Interbank rates have stabilised, easing pressure evident in Q4 2007, but banks' annual audited results season will be closely watched for signs of further write downs / dividend pressures.