The driving for of the economy continues to shift from the consumer to fixed investment which had breached 20 % of GDP for the first time in 15 years but anecdotal evidence suggests that the higher interest rates and the introduction of the National Credit Act have resulted in credit growth starting to slow down more recently. The broader second round inflation impact indicates that inflation could remain higher for longer which would result in further interest rate increases.

Subsequent to the recent inflation data we have seen an increase in yields as the market comes to terms with the higher inflation expectations. Our bond fund is well positioned with a relatively short duration.