Newsflash Market Comment... 3 Snippets of Info Economic Update... 6 Weekly Market Analysis Rates... 11

Transcription

1 05 September 2011

2 Contents Newsflash... 3 Market Comment... 3 Snippets of Info... 5 Economic Update... 6 Weekly Market Analysis Rates Standard Bank Money Market Fund STANLIB Cash Plus Fund STANLIB Dividend Income Fund Glossary of terminology

3 Newsflash Although Spring is usually good for markets, it is not without its sneezes! Market Comment The weak August US jobs report has added to the market uncertainty and hurt shares and other risk-oriented investments. However, I think that most August numbers were expected to be bad because of the hit to both business and consumer confidence that occurred after the US debt ceiling crisis, as well as the European debt issues. So perhaps the good news - or the possibility or hope of this - is that the poor jobs report will increase the pressure on the US government and the Fed to come up with better solutions to boost the economy or at least confidence. US President Obama will in a speech to Congress on Thursday ask for extensions to a payroll tax cut for workers (due to expire at end 2011) and jobless benefits for the unemployed. Those 2 elements alone would cost about $175bn. He may also ask for tax credits for businesses that hire new workers and a school construction and renovation plan costing up to $50bn. Today is Labor Day in the US, a public holiday, after which the country returns to work from their summer holidays. The European concerns are continuing and it is hoped that they will at the very least reverse their two interest rate hikes of earlier this year, although they are not known for decisive action. Market uncertainty and indecision remain high. This implies that markets may be volatile yet range-bound for some time, or for as long as uncertainty remains this high. Although Spring is usually good for markets, it is not without its sneezes! The German stock market is down 27% in the past 2 months and is today trading back at the lows of 19 th August. It is still 50% higher (in euros) than the March 2009 low (70% in dollar terms). So everything looks a little bleak right now, including the lack of jobs in SA. What can change this? The ingenuity and generosity of man (and woman) can certainly help a lot. Leadership and good decisions can help change this (in the US & Europe in particular). Warren Buffet s call for US billionaires to pay more taxes to help reduce the deficit is one example of this, as is Standard Bank Group CEO Jacko Maree s generous gesture (see today s Business Day) to donate 10% of his taxable income towards giving needy black scholars an excellent education. Despite its fall on Friday and today, Monday, the JSE All Share Index is still up around 500 points or 1.7% from the previous weeks close (10 days ago) and is bravely trying to hold onto the 30,000 level. 3

4 Although the JSE All Share Index in dollars has underperformed the MSCI World Index (of developed markets) by 3% since the end of 2010, it has outperformed the MSCI World Index by 9.9% since the end of January, including over the past few months. This is very unusual during a period of risk aversion, because normally riskier markets and currencies like the rand get sold off heavily, plus our market is quite resource-laden and resource shares have suffered badly during this time. So yes, the JSE Financial & Industrial Index, converted into dollars, has outperformed the developed markets by 1.7% so far in 2011, despite the 7% fall in the rand so far in This is interesting because many SA fund managers have sold local shares to buy supposedly better value financial and industrial shares offshore. The JSE Financial & Industrial Index has also outperformed the MSCI Emerging Markets Index by over 5% so far in So hats off to our market. It has done relatively well so far. Our listed property index has kept pace with the Global listed property index (EPRA NAREIT) in dollars since the end of 2010, once again despite the 7% fall in the rand since end 2010, although it has also outperformed strongly since the end of January. Meanwhile bond markets offshore and locally have continued to do well. Below we show the 4-5 year SA government bond yield, known as the R157, which matures in 2015/6. Source: I-Net Bridge As the graph clearly shows, the yield on this 4-5 year bond has plummeted from 7.5% just 2 months ago to 6.3% today, the lowest yield in decades. Yields have followed the offshore markets down, plus foreign investors have invested $50bn in our bond market because of our higher yields. As yields decline, bond capital values rise. 4

5 Now the SA interest rate futures market is attaching a 50% probability that our Reserve Bank will lower our official interest rate, known as the repo rate (currently 5.5%) when they next meet. This is helping interest-sensitive shares like retailers and industrial shares. Snippets of Info Brazil surprised last week by cutting their official interest rate from 12.5% to 12%. This signals the first cut amongst the BRIC countries, after many increases in rates over the past year to stem both their rising inflation rates and their overheated economies. Rising interest rates have kept the BRIC stock markets in check for a while, so this cut is considered positive for the Brazilian stock market, which rose by 6% last week after tumbling 26% since last November. It is interesting to note that despite all the negative debt issues currently swamping the Eurozone, as many as 6 of the 17 Euro-zone countries are still rated AAA by Standard & Poors, who recently cut the US rating. These countries are Austria, Finland, France, Germany, Luxembourg and the Netherlands. Others not in the euro-zone that are also still rated AAA include Denmark, Norway, Sweden, Switzerland, the Isle of Man, the UK, Guernsey and Liechtenstein. So clearly amidst the debt carnage in Europe there is also some good financial strength. Macquarie s highly rated Metals analyst, Jim Lennon, says copper prices have so far held up relatively well, with prices within 10% of their all-time high and 50% above the cash costs of the highest cost producers globally. He believes the current high price reflects the very low inventory cover and the expectation that the market will remain in deficit between supply and demand for some time yet. Despite a weaker second half demand outlook in Europe and the US, Jim still expects a global deficit of close to 250kt in the second half of2011 as a result of supply disruptions. Chile produces one third of the world s copper and most of the world s top mining companies do business there, including Anglo, Billiton, Xstrata, Freeport-McMoran and Barrick Gold. Last year it amended its royalty scheme and mining companies are expected to pay about $11bn in taxes this year - 25% of total government revenues. Despite the fact that SA is now one of the lowest rated countries in the world for mining investment, the SA Mining Industry (FT 5 th September) still creates 1m jobs (500,000 direct and 500,000 indirect), it accounts for 18% of our GDP (8% direct, 10% indirect and induced), earns over 50% of our foreign exchange and accounts for 18% of investment (9% direct). Paul Hansen (Director: Retail Investment Marketing - Investments) 5

6 Economic Update Locally, in Q2 2011, SA GDP rose by a disappointing and weak 1.3%q/q, annualised (seasonally adjusted). For 2010 as a whole the SA economy grew by 2.8% compared with a decline of 1.7% in For 2011, we have revised our GDP forecast down to 3.3% from 3.6% previously. The downward revision partly reflects the worse than expected Q GDP outcome, but also anticipates some negative impact from the weakened global economy (globally, GDP growth rates have been revised down sharply in the past couple of months). Most of the growth in Q was due to increased government expenditure, adding 0.8 percentage points. Growth in the finance and business services added a further 0.6 percentage points, while the retail sector added 0.5 percentage points. On the negative side, the manufacturing sector subtracted heavily from the overall outcome, with manufacturing production falling by a significant 7.0%q/q annualised. The fall-off in manufacturing was partly related to the disruptions experienced in the motor industry, although a number of other key manufacturing industries also lost momentum in Q Construction activity grew by a very modest 0.5%q/q, after experiencing zero growth in Q This follows a sharp slowdown in activity during Clearly, there has been a dramatic slump in building and construction activity during the past two years, which is reflected in the weak cement sales and downbeat residential and commercial property market. The most recent economic data suggests that the economy has lost momentum. This is reflected in a sharp slowdown of the SA leading economic indicator as well as a moderation in retail sales growth, including vehicle sales. The recent and fairly broad-based weakening in global economic activity will also start to act more fully against the SA s growth momentum over the coming quarters. In order to move the South African economy to a sustainably higher rate of expansion over the next few years, there is going to have to be a far more significant improvement in the level of fixed investment activity and job creation. According to data provided by the South African Reserve Bank, fixed investment spending in South Africa has fallen to a mere 18.9% of GDP, which is well below the recent peak of 24.6% of GDP achieved in Q Investment spending by, in particular, the private sector has been disappointing, despite the fact that interest rates have fallen to their lowest level since 1974 and gross savings by the corporate sector have risen to a multi-decade high of 17.5% of GDP. SA credit growth was recorded at 5.6%y/y in July, above expectations, mainly due to corporate credit. Private sector credit rose by a relatively large 1.4%m/m (R30.2bn) in July after growing by 0.5%m/m (R11.5bn) in June Mortgage credit, which is the largest component of private sector credit, rose by a very subdued 0.1%m/m or R1.09bn. 6

7 On an annual basis mortgage credit is up only 2.9%, which is consistent with the sluggish levels of activity in the residential and commercial property sectors. Consumer credit increased by 0.2%m/m in July or R1.9bn (+6.6%y/y). During the first seven months of 2011 consumer credit has risen by a total of R37.9bn, which compares with R36.5bn during the corresponding period in The rate of growth in consumer credit is still very modest, especially for this phase of the business and the fact that interest rates are at their lowest level since It is clear that the rate of expansion in private sector credit remains relatively muted and has lagged the overall economic recovery. During most economic upswings, the initial part of the recovery is driven by a rise in incomes (cash sales) and not a rise in credit. Credit demand, typically, emerges a little later in the recovery (especially if inflation starts to rise). However, during this cycle, the delay in credit growth has also been compounded by the fact that the banking sector has been digesting a surge in bad debts relating to the previous credit excesses, the ongoing impact of the NCA and the fact the banks are no longer offering the two-below-prime deals they did a couple of years-ago. Total new SA vehicle sales (as reported by NAAMSA) recorded positive growth in August of 11.1%y/y. Year-to-date domestic sales remained 14.5% ahead of the corresponding eight month period in New passenger car sales improved by 8.0% compared to August The latest growth figures, while respectable, confirm that passenger car sales have lost momentum in the past few months. The August growth rate represented the lowest monthly improvement in the past nineteen months. August 2011 new car sales again received strong support from car rental companies with the car rental industry accounting for 20% of total car sales. Sales of new light commercial vehicles, bakkies and minibuses exceeded expectations reflecting a gain of 19.8% compared to the corresponding month last year. The sale of medium and heavy trucks reflected an increase of 24.6%y/y and 13.5% respectively. August 2011 export sales were recorded at vehicles, an improvement of units or 26.7% compared to the strike-affected total of in August last year. Modest growth in private sector credit extension, sharply higher administered price increases, including electricity and fuel costs, will put the consumer s disposable income under considerable pressure and as a result, new vehicle sales over the balance of 2011 are expected to show lower growth. Offshore, in August 2011, the US ISM manufacturing index fell fractionally to 50.6 from 50.9 in July. This was above market expectations for a fall to The ISM has been above the key 50 index level for 25 consecutive months, although there has been a clear loss of momentum in recent months. A breakdown of the ISM index shows a mixed outcome. Encouragingly, the New Orders index rose by 0.4 index points, but remained fractionally below 50 at Also the employment index remained surprisingly above 50 at 51.8, but fell 1.7 index points during the month. On the negative side, the production component fell 3.7 index points to a concerning 48.6, while exports fell 3.5 index points. The rate of increase in Prices slowed for the fourth consecutive month to 55.5, from a recent high of 85.5 in April

8 This is signalling less inflationary pressure at the producer level, which is partly related to the recent fall-off in commodity prices. According to the ISM, "The overall sentiment is one of concern and caution over the domestic and international economic environment, which is affecting customers' confidence and willingness to place orders, at least in the short term." Although the ISM index beat expectations in August, and remains fractionally above the 50 index level, the index has slowed appreciably in recent months signalling a significant loss in momentum. The US economy is experiencing a crisis of confidence (which is highlighted by the comments made by the ISM itself see above) and is perilously close to recession. Will still expect that the US Q3 growth rate will show an improvement relative to the weak Q2 performance and that the US economy can avoid a return to outright recession conditions, but equally we still expect the growth rate to lack vibrancy and remain well below trend. In August 2011, the US unemployment rate remained unchanged at 9.1%. This was in-line with market expectations; however, the labour market participation rate actually rose fractionally to 64% from 63.9% in July. During the month, total non-farm payrolls were unchanged, well below market expectations for an increase of (this is a Bloomberg estimate, which had a forecast range of to a high of ). There was also a significant downward revision to the previous two months data of jobs. It is worthwhile to note that the disappointing August employment report was aggravated by the two-week Verizon strike, which involved around telecommunication workers. If these workers were added back to the report, the employment numbers would still be bad, but clearly not as shocking. On that basis the private sector would have added jobs in August. During 2010, the US economy created jobs, or an average of jobs per month. That is below the estimated increase in the number of people entering the job market every month. In the first eight months of 2011, the job gains have averaged a slightly more respectable a month; despite the weakness in May, June and August. Slightly more encouragingly, the private sector added jobs in August 2011, but this was also well below market expectations for an increase of The US private sector has added jobs in each of the past eighteen months, at an average of net new jobs a month. The latest employment data will clearly heighten extreme concern about a return to recession conditions in the US. Since December 2007 (when the US recession officially started), payroll employment is still down a net total of 6.85 million, or 5.0%. At its worst, however, the US economy had lost 8.74 million jobs. Emerging Markets - The Central Statistics Office in India revealed that it estimated Gross Domestic Product (GDP) for the second quarter of 2011 (first quarter 2011/12 financial year) to have expanded by 7.7% over the previous quarter. 8

9 The main growth drivers were services sectors and manufacturing which grew at 13.2% and 7.2% respectively and together contributed 6.3% of total growth. Very disappointing was construction which grew at 1.2% and mining at 1.8%. The IMF visited Swaziland under the Staff Monitoring Program (SMI), and released a statement which paints a very gloomy picture. In summary, the IMF found that the fiscal crisis in Swaziland is deepening, and that government had failed to meet key targets due to expenditure overruns and lack of financing. Among the main points to note, targets on the government deficit, and net international reserves were missed. Most notably, international reserves fell to E4.0 billion, or 2.2 months of import cover. This means the currency parity with South Africa has again been threatened. We are surprised by this development because as at 15 July, reserves had improved to E5.1 billion or 2.8 months. However, this may explain how the government has been able to meet its obligations given that there was no other apparent source of funds. This is also concerning given that government had committed that they would not finance expenditure with foreign exchange reserves. Since the collapse of the government of Hosni Mubarak, Egypt has been in a period of political, and thus economic, uncertainty. Although the army (Supreme Council of the Armed Forces) assumed the leadership of the country in order to oversee a transition into a new democratic dispensation, there continue to be pockets of instability in the country as some feel disillusioned with the army. Parliamentary elections were scheduled to take place this month, while presidential elections would take place in December. However, the parliamentary elections have been delayed until November. Kevin Lings, Laura Jones and Xhanti Payi (STANLIB Economics Team) 9

10 Weekly Market Analysis Currencies/ indices/ Friday s Close Weekly Move YTD commodities 02/09/11 (%) (%) Indices *MSCI World US Dollar *MSCI World Rand *MSCI Emerging Market US Dollar *MSCI Emerging Market Rand All Share Index US Dollar All Share Index Rand All Bond Index Listed Property J Currencies US Dollar/Rand Euro/Rand Sterling/Rand Euro/US Dollar Commodities Oil Brent Crude Spot Price ($/bl) Gold Price $/oz Platinum Price S/oz * MSCI - Morgan Stanley Capital International Source: I-Net Bridge 10

11 Rates These rates are expressed in nominal and effective terms and should be used for indication purposes ONLY. Standard Bank Money Market Fund Nominal: Effective: 5.25 per annum 5.38% per annum STANLIB is required to quote an effective rate which is based upon a seven-day rolling average yield for Money Market Portfolios. The above quoted yield is calculated using an annualised seven-day rolling average as at 02 September This seven-day rolling average yield may marginally differ from the actual daily distribution and should not be used for interest calculation purposes. We however, are most happy to supply you with the daily distribution rate on request, one day in arrears. The price of each participatory interest (unit) is aimed at a constant value. The total return to the investor is primarily made up of interest received but, may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. STANLIB Cash Plus Fund Effective Yield: 6.15% STANLIB Dividend Income Fund Effective Yield: 4.12% STANLIB is required to quote a current yield for Income Portfolios. This is an effective yield. The above quoted yield will vary from day to day and is a current yield as at 02 September The net (after fees) yield on the portfolio will be published daily in the major newspapers together with the all-in NAV price (includes the accrual for dividends and interest). This yield is a snapshot yield that reflects the weighted average running yield of all the underlying holdings of the portfolio. Monthly distributions will consist of dividends (currently tax exempt) and taxable interest. Interest will also be exempt from tax to the extent that investor s are able to make use of the applicable interest exemption as currently allowed by the Income Tax Act. The portfolio s underlying investments will determine the split between dividends and interest. The Manager has received a circular, (CISCA Circular No.11), from the Registrar of Collective Investment Schemes regarding a joint investigation of National Treasury, SARS and the FSB, which is currently in progress with regard to dividend income fund type portfolios. The Manager is obliged, in terms of this circular, to bring the following to your attention with regard to this investigation. The outcome of the investigation could affect certain structures and SPVs (special purpose vehicles) used by underlying investments of these types of portfolios, which may result in possible adverse tax consequences, and may require amendments to existing legislation. The abovementioned regulators still have concerns which could impact negatively on the future of these portfolios and the continuation of these portfolios can therefore not be guaranteed. The Manager however do not believe that there is any current cause for concern regarding the STANLIB Dividend Income Fund and should there be a more definitive outcome from the investigation investors in our STANLIB Dividend Income Fund will be informed timeously of any legislative changes that may affect their investment. 11

12 Liberty Investments Life Annuities Current Rates for 05 th Sept th Sept 2011 Payments are assumed to be paid monthly in advance with no guarantee period or annual escalation in income. Ages indicated assume client is the exact age shown. No tax has been deducted. Gender Male Female Age last birthday Contribution R 100,000 R 749 R 796 R 864 R 677 R 721 R 782 R 250,000 R 1,946 R 2,062 R 2,230 R 1,767 R 1,874 R 2,024 R 500,000 R 3,941 R 4,173 R 4,507 R 3,583 R 3,795 R 4,095 R 1,000,000 R 7,932 R 8,393 R 9,061 R 7,216 R 7,639 R 8,238 The table above shows the monthly annuity that an annuitant will receive for life in return for the single premium in the left hand column. Note that the annuity depends on the annuitant s exact age and gender. The rates above were calculated assuming maximum commission and will be enhanced if a commission discount is selected. 12

13 Glossary of terminology Bonds Cash Collective Investments Compound Interest Dividend Yields Dividends Earnings per share Equity A bond is an interest-bearing debt instrument, traditionally issued by governments as part of their budget funding sources, and now also issued by local authorities (municipalities), parastatals (Eskom) and companies. Bonds issued by the central government are often called gilts. Bond issuers pay interest (called the coupon ) to the bondholder every 6 months. The price/value of a bond has an inverse relationship to the prevailing interest rate, so if the interest rate goes up, the value goes down, and vice versa. Bonds/gilts generally have a lower risk than shares because the holder of a gilt has the security of knowing that the gilt will be repaid in full by government or semi-government authorities at a specific time in the future. An investment in this type of asset should be viewed with a 3 to 6 year horizon. An investment in cash usually refers to a savings or fixed-deposit account with a bank, or to a money market investment. Cash is generally regarded as the safest investment. Whilst it is theoretically possible to make a capital loss investing in cash, it is highly unlikely. An investment in this type of asset should be viewed with a 1 to 3 year horizon. Collective investments are investments in which investors funds are pooled and managed by professional managers. Investing in shares has traditionally yielded unrivalled returns, offering investors the opportunity to build real wealth. Yet, the large amounts of money required to purchase these shares is often out of reach of smaller investors. The pooling of investors funds makes collective investments the ideal option, providing cost effective access to the world s stock markets. This is why investing in collective investments has become so popular the world over and is considered a sound financial move by most investors. Compound interest refers to the interest earned on interest that was earned earlier and credited to the capital amount. For example, if you deposit R1 000 in a bank account at 10% and interest is calculated annually, your balance will be R1 100 at the end of the first year and R1 210 at the end of the second year. That extra R10, which was earned on the interest from the first year, is the result of compound interest ("interest on interest"). Interest can also be compounded on a monthly, quarterly, half-yearly or other basis. The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. The higher the yield, the more money you will get back on your investment. When you buy equities offered by a company, you are effectively buying a portion of the company. Dividends are an investor s share of a company s profits, given to him or her as a part-owner of the company. Earnings per share is a measure of how much money the company has available for distribution to shareholders. A company s earnings per share is a good indication of its profitability and is generally considered to be the most important variable in determining a company s share price. A share represents an institution/individual s ownership in a listed company and is the vehicle through which they are able to share in the profits made by that company. As the company grows, and the expectation of improved profits increases, the market price of the share will increase and this translates into a capital gain for the shareholder. Similarly, negative sentiment about the company will result in the share price falling. Shares/equities are usually considered to have the potential for the highest return of all the investment classes, but with a higher level of risk i.e. share investments have the most volatile returns over the short term. An investment in this type of asset should be viewed with a 7 to 10 year horizon. 13

14 Financial Markets Fixed Interest Funds Gross Domestic Product (GDP) Growth Funds Industrial Funds Investment Portfolio JSE Securities Exchange Price to earnings ratio Property Resources and Basic Industries Funds Smaller Companies Funds Value Funds Financial markets are the institutional arrangements and conventions that exist for the issue and trading of financial instruments. Fixed interest funds invest in bonds, fixed-interest and money market instruments. Interest income is a feature of these funds and, in general, capital should remain stable. The Gross Domestic Product measures the total volume of goods and services produced in the economy. Therefore, the percentage change in the GDP from year to year reflects the country's annual economic growth rate. Growth funds seek maximum capital appreciation by investing in rapidly growing companies across all sectors of the JSE. Growth companies are those whose profits are in a strong upward trend, or are expected to grow strongly, and which normally trade at a higher-than-average price/earnings ratio. Industrial funds invest in selected industrial companies listed on the JSE, but excluding all companies listed in the resources and financial economic groups. An investment portfolio is a collection of securities owned by an individual or institution (such as a collective investment scheme). A funds portfolio may include a combination of financial instruments such as bonds, equities, money market securities, etc. The theory is that the investments should be spread over a range of options in order to diversify and spread risk. The primary role of the JSE Securities Exchange is to provide a market where securities can be freely traded under regulated procedures. Price to earnings ratio or p: e ratio is calculated by dividing the price per share by the earnings per share. This ratio provides a better indication of the value of a share, than the market price alone. For example, all things being equal, a R10 share with a P/E of 75 is much more expensive than a R100 share with a P/E of 20. Property has some attributes of shares and some attributes of bonds. Property yields are normally stable and predictable because they comprise many contractual leases. These leases generate rental income that is passed through to investors. Property share prices however fluctuate with supply and demand and are counter cyclical to the interest rate cycle. Property is an excellent inflation hedge as rentals escalate with inflation, ensuring distribution growth, and property values escalate with inflation ensuring net asset value growth. This ensures real returns over the long term. These funds seek capital appreciation by investing in the shares of companies whose main business operations involve the exploration, mining, distribution and processing of metals, minerals, energy, chemicals, forestry and other natural resources, or where at least 50 percent of their earnings are derived from such business activities, and excludes service providers to these companies. Smaller Companies Funds seek maximum capital appreciation by investing in both established smaller companies and emerging companies. At least 75 percent of the fund must be invested in small- to mid-cap shares which fall outside of the top 40 JSE-listed companies by market capitalisation. These funds aim to deliver medium- to long-term capital appreciation by investing in value shares with low price/earnings ratios and shares which trade at a discount to their net asset value. Sources: Unit Trust and Collective Investments (September 2007), The Financial Sector Charter Council, Personal Finance (30 November 2002), Introduction to Financial Markets, Personal Finance, Quarter , Investopedia ( and The South African Financial Planning Handbook

15 Disclaimer The price of each unit of a domestic money market portfolio is aimed at a constant value. The total return to the investor is primarily made up of interest received but, may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. An investment in the participations of a CIS in securities is not the same as a deposit with a banking institution. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from STANLIB Collective Investments Ltd (the Manager). Commission and incentives may be paid and if so, would be included in the overall costs. A fund of funds is a portfolio that invests in portfolios of collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. TER is the annualised percent of the average Net Asset Value of the portfolio incurred as charges, levies and fees. A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TERs. Portfolios are valued on a daily basis at 15h30. Investments and repurchases will receive the price of the same day if received prior to 15h30. Liberty is a full member of the Association for Savings and Investments of South Africa. The Manager is a member of the Liberty Group of Companies. As neither STANLIB Wealth Management Limited nor its representatives did a full needs analysis in respect of a particular investor, the investor understands that there may be limitations on the appropriateness of any information in this document with regard to the investor s unique objectives, financial situation and particular needs. The information and content of this document are intended to be for information purposes only and STANLIB does not guarantee the suitability or potential value of any information contained herein. STANLIB Wealth Management Limited does not expressly or by implication propose that the products or services offered in this document are appropriate to the particular investment objectives or needs of any existing or prospective client. Potential investors are advised to seek independent advice from an authorized financial adviser in this regard. STANLIB Wealth Management Limited is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 37 of 2002 (Licence No. 26/10/590) 17 Melrose Boulevard, Melrose Arch, 2196 P O Box 202, Melrose Arch, 2076 T (SA Only) T+27(0) E contact@stanlib.com Website 24 Ameshoff Street, Braamfontein, 2001 P O Box 10499, Johannesburg, 2000 T E info@liberty.co.za Website STANLIB Wealth Management Limited Reg. No. 1996/005412/06 Authorised FSP in terms of the FAIS Act, 2002 (Licence No. 26/10/590) Liberty Group Limited Reg. No. 1957/002788/06 Authorised FSP in terms of the FAIS Act (Licence No. 2409) STANLIB Collective Investments Limited Reg. No. 1969/003468/06 L48N69 15