Contents Newsflash Market Comment How about the rand? Other Commentators BCA Research Economic Update...

Transcription

1 28 July 2014

2 Contents Contents... 2 Newsflash... 3 Market Comment... 3 How about the rand?... 4 Other Commentators... 5 BCA Research... 6 Economic Update... 7 Weekly Market Analysis... 9 STANLIB Money Market Fund STANLIB Enhanced Yield Fund STANLIB Income Fund STANLIB Flexible Income Fund STANLIB Multi-Manager Absolute Income Fund... 11

3 Newsflash The rand has shown some signs of late of wanting to strengthen a bit Market Comment Mining shares around the world have struggled during most of the past 5-plus year bull market. For example the JSE Mining Index in dollar terms was some 63% below its 2008 record high - as of 7 th July last year, after over 4 years of this global equity bull market. Since then this index is up 40% even in dollar terms, but still remains 48% below its 2008 record high. So it is coming from a very low base, especially in hard currency terms, but lately the recovery has gathered some steam, with the JSE Mining Index in dollars now up 16.7% in 2014, more than triple the MSCI World Index return of 5.3% (excluding dividends). That is meaningful and it is beginning to attract the attention of offshore buyers, which is what is needed to get prices higher, at a time when many think the developed market shares are no longer offering good value, especially US shares (not us though). BHP Billiton is up 12.9% in dollars in the past 7 weeks, Anglo American is at its highest rand price in 2 years and Glencore in pounds is at its highest price in 15 months. As we ve mentioned before, Anglo American fell 80% in dollar terms from May 2008 to March 2009 (just 10 months!!!). Typically when a market or share (that still has a future, i.e. is not going out of business) falls 80%, that is about it, that is the bottom and returns in the years thereafter are good. There have been many examples, including the Nasdaq and Japanese Nikkei, of course the Greek stock market etc. One has to be very patient though. It takes a while to unfold. So far Anglo is up 95% in dollars from its March 2009 low, but is still 60% below its record high. So what is going on here? Well, the manufacturing indicator, the so-called PMI or purchasing manager s index, in China last month rose to its best level in about 9 months last week, of 53 (anything above 50 signals expansion), better than the 52 expected. China did achieve 7.5% GDP growth in June, year-on-year, which Premier Li has promised for 2014 and this morning we heard that they have cut their reserve requirement for some banks, accelerated infrastructure spending and loosened some of the property curbs. Also profits of industrial companies in China were 17.9% up year-on-year in June, well up on the +8.9% gain in May. The Chinese stock market has been a terrible performer for some time (despite its fabulous GDP growth over the years), trading at low price-to-earnings multiples of around seven. So the Shanghai Composite Index rose 2.1% this morning, BUT is currently trading at the same level as 14 years ago!!! The MSCI China Index is by far the biggest index in the MSCI Emerging Markets Index at 18.5%, so it is crucial (see chart below). However it has been a terrible performer over the years. As you can see on the chart below, it is trading at the same level as 19 years ago, namely 2005!! That is a shocker and probably the most glaring example of the stock market not equalling the country s GDP growth, and vice versa. We ve mentioned this regarding the London stock market and our own. That little pick-up on the far right-hand side of the chart doesn t look like much on this long-term chart, but it equals 14% in the past 2.5 months in the Chinese currency, which is similar to the dollar in strength. What makes it most interesting is that there are so many investors in the US and elsewhere who are negative on China because of its property bubble, credit bubble and infrastructural spending bubble. Certainly Credit Suisse s highly regarded strategist, Andrew Garthwaite, regards these three areas as potential bubbles and so he remains negative on China. For the time being, at least, China may just surprise the doomsayers; hopefully so for all of us, especially countries like ours that depend so much on China for exporting our commodities, not to mention the performance of our mining shares on the JSE!

4 Source: I-Net Bridge It is not just China, but they do buy about 40% of the world s copper production and 60% of the iron ore production. It is also the US, where the economy is stirring nicely and also Europe, where the latest data on manufacturing has also been promising, not to mention Japan and many other smaller economies. Of course the record low interest rates are stirring the animal spirits too. Apparently Tencent, which hit a record high this morning in Hong Kong, is approximately 10% of the MSCI China Index. Meanwhile our JSE Mining Index in rands is at a 2-year high today and +19.7% so far in 2014 (total return, i.e. including dividends). Our JSE Resources Index (which includes Sasol) has a total return of 20.3% so far in 2014, well above the 10.7% of the JSE Financial & Industrial Index. So it is going in the right direction, thankfully! Long may it last. The Hong Kong Hang Seng Index hit a 3.5 year high today, after going nowhere for some time. It is still 20% below its 2007 record high. As we ve always said, mining is a tough one to call because there are so many variables, namely the rand exchange rate, the prices of the metals, the demand and supply equation etc. So it is much higher risk than financial and industrial shares - and hopefully much higher return (finally); at least so far this year it is! All of this dovetails with the stronger MSCI Emerging Markets Index, given that mining shares comprise about 30% of this index. This index hit a new high for 2014 last week and currently has a total return of 9.7% in dollars in 2014, beating the 6.9% total return of the developed market MSCI World Index. Many market analysts, including Credit Suisse, still prefer the developed markets, so this emerging market bullishness is not at all popular or favoured at this time. Nor are mining shares popular at this time. How about the rand? The rand has shown some signs of late of wanting to strengthen a bit. Maybe once the big strikes are over (are they ever?), it might do so. The chart below of the rand to the weaker big currency, namely the euro (of late) does still show a break of the big trend of the past two years. This is indicative of some potential future strength in the rand, at least in the short-term, unless the rand snaps back into the down-trend soon. The euro has weakened from around $1.40 to $1.342 to the dollar, partly because the European Central Bank wants it weaker, to stimulate both the economy and inflation (move away from the harsher deflation). The euro has declined by 5.5% against the pound so far this year. Against the dollar, the rand's big down-trend since 2011 also appears to be breaking on the charts. Against the pound, the big down-trend since 2011 remains firmly intact; the shorter-term down-trend since February 2013, however, is also under attack.

5 Source: I-Net Bridge Many think the rand could be vulnerable to further declines once the US starts raising interest rates sometime next year, because money may then flow out of emerging markets back into the US as their rates gradually become more attractive again. We shall have to wait and see. STANLIB s current house view on the rand is for at year-end 2014 to the dollar. Of course, calling the rand, especially on a particular date, is extremely difficult, because there are so many moving parts that lead to the rand s value and these moving parts change in size or emphasis frequently, whether it is commodity prices, or strikes, our trade deficit and current account deficit, flows into and out of our markets etc. etc. Other Commentators US Market Analyst, Elaine Garzarelli The quants system is still bullish (unhedged long position in equities) at 71% (30% and below is bearish). Therefore in her view shares are the best investment, since low interest rates, as an alternative investment, do not provide good returns. The sentiment indicator was flat last week at 56.5% (still negative). US GDP and global growth are both drivers of earnings and she expects both to strengthen. So far US 2 nd quarter earnings are up 8% year-on-year, although revenues are only up 0.3%. She expects the US economy to continue its modest growth, rather than strong growth, which helps keep interest rates down, as well as the oil price. Inflation remains fine with the CPI at 2.1% and the core reading at 1.9%. Dr Steve Sjuggerud (repeat of one of his earlier recommendations) More-often-than-not, the simpler the market indicator and the more history you can base it on, the better, says he. On these two counts, not much can beat investing legend Jeremy Grantham s Presidential Election Cycle Indicator. In short, it shows that shares have not had a losing year during the 3 rd year of a presidential term. That 3 rd year for Obama starts on 1 st October, in two months time. It sounds ridiculous, but the numbers are amazing. Going back to 1932 the 3 rd year has returned on average 26.2%, whereas the 1 st and 2 nd years have averaged negative returns and the 4 th year 6.9%. So we re only 2 months away from the best time, historically, to own US shares. Plus nearly all the returns historically have come in the first seven months of the 3 rd year, from October to the end of April. Astoundingly, Grantham also found that the US election cycle has similar results in Japan and Europe. When the US election cycle is in Year Three, those foreign markets go up a lot.

6 One important caveat: there have not been that many 3 rd years, only twelve of them in the past 50 years. So as Grantham says, it may well be pure luck, but one would have to admit that it is a long stretch of luck. Grantham thinks that around the time of the actual election or soon after, the market bubble could burst. Grantham s full report Looking for Bubbles and in Defense of Risk Aversion is at under quarterly letters. BCA Research Since Fed Chair Yellen warned about froth in biotech shares and in high yield bonds, the biotech index is down 6% and high yield bond yields have jumped 50 basis points. Chen Zhao does not see this as a harbinger of worse to come. In a world of ultra-easy money and improving growth, the danger is to sell shares too early. He still thinks the next big move could be for lower bonds yields and higher share prices, similar to what happened in the late 1990 s. Well at least he and the Garza are more-or-less on the same page here! BCA notes that inflation pressures could upend low interest rate policy expectations, but businesses and employees have little to no pricing power, given excess capacities in the economy of goods and workers. So equities could be in an extended sweet spot that may actually last well into 2016 (not just 2015) if monetary tightening is not too soon or too aggressive. Paul Hansen Director: Retail Investing

7 Economic Update Locally last week, June 2014, SA headline CPI inflation rose by 0.3%m/m, with the annual rate of inflation remaining unchanged at 6.6%y/y. This was slightly below market expectations for inflation to rise to 6.7%y/y (STANLIB 6.6%y/y). Higher domestic worker wages and housing rents explain most of the monthly increase. Food prices rose by a modest 0.1%m/m in June 2014, after increasing by 0.9%m/m in May 2014, 1.4%m/m April 2014 and 1.4%m/m in March The increase in June was mostly in dairy products, while the price of fruit, and vegetables fell. The annual rate of food inflation is now up at 9.2%y/y, but should start to ease over the coming months. The price of petrol fell by a welcome 22c/l in June This provided only very modest relief to consumer inflation given the extremely high base. Over the past year, petrol prices have risen by 13.2%y/y. Unfortunately, the petrol price rose by 31c/l in July. This will add some inflationary pressure next month. Overall, petrol inflation remains high, but will hopefully benefit from a high base effect in the coming months. Domestic worker s wages rose by 2.3%m/m, and by 5.7%y/y. Overall, the increase in domestic worker s wages remains modest within the context of average wages increase in South Africa, which are currently around 8%y/y. This added 0.1 percentage points to the monthly increase in inflation, but did not contribute significantly to the annual rate of inflation. House rentals rose by 1.5%m/m and by 5.2%y/y. This added 0.2 percentage points to the monthly increase in inflation, but remains modest on an annual basis. The residential housing market remains under pressure given the lack of growth in mortgage finance as well as the dearth of housing developments. CPI excluding food and petrol is still within the inflation target at 5.7%y/y, unchanged from May 2014, but up from 5.5%y/y in April Core inflation (CPI excluding food, fuel and electricity) remains contained at 5.6%y/y in June, but up from 5.5%y/y in each of the preceding three months. The latest increase in core inflation is a little concerning, but still appears manageable within the context of South Africa s inflation target. In that regard, the Reserve Bank will continue to pay close attention to surveys of inflation expectations. Services inflation moved a little higher to 6.0%y/y, while administered price inflation is still above the target at 8.6%y/y. The inflation rate for pensioners remains well above the upper-end of the inflation target at 6.7%y/y. For 2013 as a whole, SA CPI inflation averaged 5.8%, up slightly from an average of 5.7% in 2012 and a more subdued 5.0%y/y in 2011 and 4.3% in For 2014, SA inflation is now forecast to average 6.2%, with the May and June reading of 6.6%y/y a possible peak for the year. The forecast is highly dependent on the outlook for food inflation coupled with the impact of the weaker exchange rate. Year-to-date the Rand has weakened by a very modest 0.9%, but has depreciated by 19.8% against the Dollar since the beginning of This would suggest that consumer inflation should remain under pressure over the coming months, but not necessarily move dramatically higher. The risk to the inflation forecast remains to the upside over the short-term, but recent Rand stability should allay some concerns. Inflation is likely to move back inside the target range in the coming months before rising above 6% in the final quarter of However, we expected inflation to be mostly inside the target in 2015, largely due to base effects. The Reserve Bank has, obviously, become more concerned about sustained higher inflation, hence the recent 0.25bps increase in interest rates, but the extreme weakness in the domestic economy is equally concerning. We expect very modest rate hikes over the coming year. In the emerging markets, the Monetary Policy Committee of the Bank of Nigeria opted to leave rates on hold as widely expected by the market at 12%. Liquidity ratios were kept at 30% and so were the Cash Reserve Ratios in the public and private sector at 75% and 15% respectively. This brings the current real rate to 3.8%. Rates were last changed in October 2011 and are likely to remain at current levels until after the elections in February At the governor s first meeting since taking over, Godwin Emefiele noted that the central bank was pleased with growth and believed inflation would remain benign. The bank s committee decided to maintain a tight monetary policy as there was a rise in liquidity and inflation rate but stated the importance of enhancing the quality of life of Nigerians and stimulating employment through support of small and medium sized businesses. The inflation rate recorded at 8.2% y/y in June 2014, higher than the 8% reading in May and is the highest price increase since August 2013 suggesting there could be a change in the direction of price increases. This is still with the 6-9% target however the upper-end could be breached by the fourth quarter of this year. The governor mentioned that his intention to lower interest rates was a longer term objective and would be done so gradually over five years as MPC decision needed to take into account the impact on employment level, wealth creation and growth of business. It s difficult to see how interest rates will be decreased meaningfully as worldwide interest rates would be well on their way towards normalisation at that stage and to attract flows Nigeria would preferably have to have interest rates at tight levels. Inflation is also expected to breach the target by the fourth quarter of this year which would make it even more difficult to justify loosening monetary policy.

8 Inflation in Angola recorded another historical low at 6.89% in June 2014 from 6.95% in May. The Food and Non- Alcoholic Beverages sector, which constitutes 55% of the CPI basket, recorded the lowest monthly increase at 0.4%. Even though this gives further room for the National Bank of Angola to cut rates the expectation is for them to keep rates on hold in the foreseeable future. Interest rates are currently at a record low of 9.25% and were last cut by 50 basis points in November Please follow our regular economic updates on Kevin Lings, Laura Jones & Kganya Kgare (STANLIB Economics Team)

9 Weekly Market Analysis Currencies/ Indices/ Commodities Friday s Close 25/07/14 Weekly Move (%) YTD (%) 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 Source: I-Net Bridge * MSCI - Morgan Stanley Capital International

10 Rates These rates are expressed in nominal and effective terms and should be used for indication purposes ONLY. STANLIB Money Market Fund Nominal: Effective: 5.86% per annum 6.02% 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 27 July 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 Enhanced Yield Fund Effective Yield: 6.26% 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 25 July 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. STANLIB Income Fund Effective Yield: 7.05% 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. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the overall costs. The above quoted yield will vary from day to day and is a current yield as at 25 July 2014.

11 STANLIB Extra Income Fund Effective Yield: 6.42% 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. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the overall costs. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. The above quoted yield will vary from day to day and is a current yield as at 25 July STANLIB Flexible Income Fund Effective Yield: 6.65% 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. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the overall costs. The above quoted yield will vary from day to day and is a current yield as at 25 July STANLIB Multi-Manager Absolute Income Fund Effective Yield: 6.27% 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. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the overall costs. The above quoted yield will vary from day to day and is a current yield as at 25 July 2014.

12 Glossary of terminology Bonds 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. Cash Collective Investments Compound Interest Dividend Yields Dividends Earnings per share 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.

13 Equity 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 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. 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-thanaverage 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.

14 Smaller Companies Funds Value Funds Growth Funds 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. 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-thanaverage price/earnings ratio. 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 2004.

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) Compliance No.: H8X Melrose Boulevard, Melrose Arch, 2196 P O Box 202, Melrose Arch, 2076 T (SA Only) T+27(0) E contact@stanlib.com Website STANLIB Wealth Management Limited Reg. No. 1996/005412/06 Authorised FSP in terms of the FAIS Act, 2002 (Licence No. 26/10/590) STANLIB Collective Investments Limited Reg. No. 1969/003468/06