The Marriott Prudential Income Fund distributed 7 cpu in September. The fund looked to take advantage of unusually high dividend yields in leading Financial and Industrial companies by gradually increasing its equity exposure over the last six months. This has served the fund well as we have witnessed a positive re-rating in these stocks. The fund continues to hold a significant cash balance as signs of an economic recovery in South Africa still remain fragile. One of the major benefits of the fund's prudential mandate is the ability to hold a diverse portfolio throughout all the asset classes and hence the ability to take advantage of value opportunities as they present themselves. The fund's international exposure remains at the maximum 20% level as we continue to see significant merit in equities from the First World with stock markets continuing to rally over the past three months on the back of improving economic data. A portion of the fund has been allocated to International Real Estate; yields of over 4% within the Real Estate sector are very attractive relative to both bonds and cash.

The Marriott Prudential Income Fund distributed 7 cpu in June. The conservative positioning of the fund (increased cash holdings) has served it well over the last year resulting in solid performance. The Marriott Prudential Income Fund has approximately 40% of its portfolio invested in a selection of fundamentally sound, JSE-listed financial and industrial companies which are currently trading at dividend yields well above their historic averages. The South African equities included have sustainable competitive advantages which enable them to retain and grow their customer base, protect margins, and increase, or at least maintain, their dividend payments despite the current economic down turn. The desired application of the fund's large cash holdings will begin once signs of economic recovery in South Africa become evident. One of the major benefits of the fund's prudential mandate is the ability to hold a diverse portfolio throughout all the asset classes and hence the ability to take advantage of value opportunities as they present themselves. The fund's international exposure remains high as we continue to see significant merit in equities from the First World.

The Prudential Income Fund distributed 7 cpu in March. The conservative positioning of the fund (removal of property and bonds, and the significant down-weighting of SA equities) has served it well. The Prudential Income Fund currently has 37.1% of its portfolio invested in a selection of defensive South African financial and industrial equities which are currently trading at yields above their historic averages. However, we will continue to be cautious of this asset class as inflation concerns and a challenging economic outlook are likely to keep prices suppressed in the short to medium term. We will continue to maximise our international exposure at 20% of the portfolio as there are mega-cap stocks in the US, UK and Europe showing excellent value.

The Prudential Income Fund distributed 8.2 cpu in December. In recent months the fund has grown its income considerably, largely as a result of the high cash holdings. The conservative positioning of the fund (removal of property and bonds, and the significant down-weighting of SA equities) has served it well. The Marriott Prudential Income Fund currently has 35% of its portfolio invested in a selection of South African financial and industrial equities which are currently trading at yields above their historic averages, however we will continue to be cautious of this asset class as inflation concerns and a challenging economic outlook are likely to keep prices suppressed in the short to medium term. We will continue to maximise our international exposure at 20% of the portfolio as there are mega-cap stocks in the US, UK and Europe that have outstanding track records for producing and growing their dividends.