Despite signs that the global and local economies are bottoming, uncertainty remains high and markets volatile. It is possible that we shall see global economies commencing recovery by yearend, but there are still very significant risks that a turnaround may be slow and prolonged. News on the domestic economy will continue to be on the negative side over the next few months, but various cost-push and exogenous factors may cause inflation to remain sticky over the same period. For this reason, uncertainty regarding further monetary easing has increases. We, however, still believe that a further 100 basis easing will be possible by September. This will add to the relief that consumers should start experiencing from lower energy and food prices. Domestic demand should turn positive quickly, with thanks going mainly to strong fixed investment and social spend, reviving real growth in the local economy. The SA equity market in general is furthermore not expensively priced after the recent pullbacks, i.e. we foresee a positive environment for equities. Volatile times like these, when sector rotation direction is unclear, are relative good times for Index Trackers.

The Gryphon All Share Tracker Fund, due to its tracker mandate, tends to be fully invested more often than not and is only slightly tilted to certain sectors and shares, so as to achieve the most efficient replication of the SA All Share Index with an optimum number of shares.

Over the past two years the US consumer and for that matter, most of the consumers in the advanced economies, have been impacted by a large number of negative events. Including severe fluctuations in interest rates, huge changes in petrol prices, sharply weakening labour markets, plummeting house prices, record high debt levels, a cascading-crash in the equity markets, a banking crisis, severe weather and the ongoing war in the Middle-East and elsewhere. Against this background, it can be expected that consumer confidence will struggle to heal, which could see the global economy grow by sub-trend growth rates for a protracted period of time. As a result of the sharply weakening global economy, economic activity in South Africa has slowed substantially in recent months; especially consumer spending and export activity. Furthermore, the outlook for the next few quarters points to ongoing weakness, with the current slowdown expected to broaden across most components of the local economy.

Falling commodity prices and easing food prices, together with the slowdown in domestic demand, has significantly eased domestic inflationary concerns in South Africa. This has enabled the MPC to cut interest rates aggressively since December last year. This will add to the relief that consumers should start experiencing from lower energy and food prices. Domestic demand should remain positive thanks mainly to strong fixed investment and social spend, driving further real growth in the local economy. Furthermore, the SA equity market in general is not expensively priced after the recent pull backs, i.e. we foresee a positive environment for equities. Volatile times like these, when sector rotation direction is unclear, are relatively good times for Index Trackers.

The Gryphon All Share Tracker Fund, due to its tracker mandate, tends to be fully invested more often than not. It is only slightly tilted to certain sectors and shares, so as to achieve the most efficient replication of the SA All Share Index with an optimum number of shares.

The world economy is undergoing an unusually sharp and synchronised downturn and the financial climate has deteriorated even further, with secondary effects kicking in over the past quarter. Globally, interest rate cuts and bail-out packages from central governments have continued. South Africa has not escaped the fallout of global financial market developments, but the impact has been indirect and relatively limited so far. However, local consumer spending has started to slow down quickly. Falling commodity prices and easing food prices supported a deceleration in inflation over the quarter, prompting the MPC to start cutting interest rates at the December 2008 meeting. We foresee the MPC to cut interest rates at each of their meetings this year, adding to the relief that consumers should start experiencing from lower energy and food prices. Domestic demand should remain positive thanks mainly to strong fixed investment spend, driving further real growth in the local economy. The SA equity market in general is furthermore not expensively priced after the recent pull backs, i.e. we foresee a positive environment for equities. Volatile times like these, when sector rotation direction is unclear, are relative good times for Index Trackers.
The Gryphon All Share Tracker Fund, due to its tracker mandate, tends to be fully invested more often than not, and is only slightly tilted to certain sectors and shares, so as to achieve the most efficient replication of the SA All Share Index with an optimum number of shares.