Newsletter:

Subject:	Think before you switch into a Money Market Fund
Date:	26 Jan 08

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We have posted many articles on our website over the last few days suggesting that a panic response to recent volatility is unwarranted, especially if you have a longer term investment horizon and made the decision to invest in equities after taking risks into account.

But if you wish to switch into a money market fund because your stomach is churning and you want a good nights sleep for a change, you should be aware of the implications of choosing a money market fund managed by the same company that manages your equity fund, as opposed to an ‘outside’ money market fund.

Switching within a management company
A switch within a management company is quicker and more cost effective.

A switch of R100 000, from the Investec Equity Fund to the Investec Money Market Fund for example will cost R79.80 and will be effected on the same day. When you want to switch back to your equity fund, the move will also be completed in one day, a good thing in rapidly rising market.

Switching from one management company to another
If, for reasons of your own, you select a money market fund which is managed by a company other than the manager of your equity fund, you should be aware of the longer time and higher costs associated with this decision.

A switch of R100 000, from the Investec Equity Fund to the Sanlam Money Market Fund for example will cost R285 (R250 + VAT) and will take four working days to complete. The equity fund will be sold on the day the instruction to sell is given and you will buy into the money market fund two days later. More importantly, a switch from a money market fund into an equity fund of a different management company will also take four days.

Investors should note that orders to switch into or out of money markets should be communicated by 10.00am, in order to take place on the day concerned.

Looking for an investment in defensive equity fund? In theory, the funds with investments in infrastructure, the Sasfin 2010 Fund and the Stanlib Nationbuilder Fund should we well placed. You can read an interview with Robin Eagar, the fund manager of the Stanlib Nationbuilder Fund below.

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The Stanlib Nationbuilder Fund: A fund protected by its 'government mandate'?
In theory, companies that have been awarded contracts to spend the R14 billion set aside to build up the country's infrastructure should be fairly defensive investments, and a good bet in volatile markets. Editor Liz Still spoke to Robin Eagar, fund manager of the Stanlib Nationbuilder Fund, which was launched nearly a year ago, and currently has assets under management of R784 million.

More at http://www.equinox.co.za/article_1902.html

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Sub prime and South African Money Market Funds
At the ACI media briefing last week it was announced that money market funds had suffered outflows of approximately R1.6 billion for the quarter ending 31st December 2007. This is unusual.

More at http://www.equinox.co.za/article_1899.html

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Six predictions from Pieter Koekemoer, Chairman of the Association of Collective Investments
At a presentation of quarterly results from the Association of Collective Investments this week, Chairman of the ACI Pieter Koekemoer warned that 2008 would not be an easy year.

More at http://www.equinox.co.za/article_1895.html

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Best Regards
The Equinox Team

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