Property held in the fund is at the minimum level of 50% and the use of single stock futures has further brought down the effective exposure to approximately 35%. Our current property sector positioning incorporates industrial, office and retail exposure (GLA) of approximately 40%, 26% and 33% respectively. Our retail sector exposure remains well below the sector average of approximately 40%. This is in line with Marriott's expectation that the retail sector will struggle in the current economic environment due to an increased level of unemployment, consumer de-leveraging and increasing administered prices. In addition continued high property operating expenses will put further pressure on property income growth in the years ahead. We have positioned the portfolio to favour more liquid stocks and restrict our universe to property funds with a market capitalisation in excess of R2-billion as we believe them to be more resilient in the current environment.


Future Expectations
In light of South Africa's subdued economic environment and relatively low property yields, the fund has been positioned to offer maximum capital protection to capital- sensitive investors. With numerous upside risks to the South African inflation outlook, resulting in high likelihood of bond yields moving out, property exposure within the fund will be kept to a minimum and hedges will remain in place. Should property prices decline as expected, Marriott would have the opportunity to reinvest at higher yields (cheaper income streams).

Property held in the fund is at the minimum level of 50% and the use of single stock futures has further brought down the effective exposure to approximately 35%. Our current property sector positioning incorporates industrial, office and retail exposure (GLA) of approximately 40%, 26% and 33% respectively. Our retail sector exposure remains well below the sector average of approximately 40%. This is in line with Marriott's expectation that the retail sector will struggle in the current economic environment due to an increased level of unemployment, consumer de-leveraging and increasing administered prices. In addition continued high property operating expenses will put further pressure on property income growth in the years ahead. We have positioned the portfolio to favour more liquid stocks and restrict our universe to property funds with a market capitalisation in excess of R2-billion as we believe them to be more resilient in the current environment.

Future Expectations
In light of South Africa's subdued economic environment and relatively low property yields, the fund has been positioned to offer maximum capital protection to capital- sensitive investors. With numerous upside risks to the South African infl ation outlook, resulting in high likelihood of bond yields moving out, property exposure within the fund will be kept to a minimum and hedges will remain in place. Should property prices decline as expected, Marriott would have the opportunity to reinvest at higher yields (cheaper income streams).

Property held in the fund is at the minimum level of 50% and the use of single stock futures has further brought down the effective exposure to approximately 35%. Our current property sector positioning incorporates industrial, offi ce and retail exposure (GLA) of approximately 40%, 26% and 33% respectively. Our retail sector exposure remains well below the sector average of approximately 40%. This is in line with Marriott's expectation that the retail sector will struggle in the current economic environment due to an increased level of unemployment, consumer deleveraging and increasing electricity prices. In addition continued high property operating expenses will put further pressure on property income growth in the years ahead. We have positioned the portfolio to favor more liquid stocks and restrict our universe to property funds with a market capitalisation in excess of R2-billion as we believe them to be more resilient in the current environment.

Future Expectations
In light of South Africa's subdued economic environment and relatively low property yields, the fund has been positioned to offer maximum capital protection to capital- sensitive investors. With numerous upside risks to the South African infl ation outlook, and risks to bond sector (i.e. reversal of foreign fl ows and an increasing supply of bonds), property exposure within the fund will be kept to a minimum and hedges will remain in place. Should property prices decline as expected, Marriott would have the opportunity to reinvest at higher yields (cheaper income streams).

Property held in the fund is at the minimum level of 50% and the use of single stock futures has further brought down the effective exposure to approximately 35%. Our current property sector positioning incorporates industrial, offi ce and retail exposure (GLA) of approximately 42%, 28% and 30% respectively. Our retail sector exposure remains well below the sector average of approximately 41%. This is in line with Marriott's expectation that the retail sector will struggle in the current economic environment due to an increased level of unemployment, consumer deleveraging and increasing electricity prices. We have positioned the portfolio to favor more liquid stocks and restrict our universe to property funds with a market capitalisation in excess of R2-billion as we believe them to be more resilient in the current environment.

Future Expectations
Future Expectations In light of South Africa's subdued economic environment and relatively low property yields, the fund has been positioned to offer maximum capital protection to capital- sensitive investors. With numerous upside risks to the South African infl ation outlook, and risks to bond sector (i.e. reversal of foreign fl ows and an increasing supply of bonds), property exposure within the fund will be kept to a minimum and hedges will remain in place. Should property prices decline as expected, Marriott would have the opportunity to reinvest at higher yields (cheaper income streams).