Investec Global Strategy Fund R.C.S. Luxembourg B Investment Fund under Luxembourg Law

Transcription

1 GSF Investec Global Strategy R.C.S. Luxembourg B Investment under Luxembourg Law Annual report and accounts For the year ended 31 December 2013

2

3 Investec Global Strategy Registered address 49 Avenue J.F. Kennedy, L-1855 Luxembourg Grand Duchy of Luxembourg Correspondence address Global Distributor c/o Investec Asset Management Guernsey Limited P.O. Box 250, Glategny Court, Glategny Esplanade St. Peter Port, Guernsey GY1 3QH Channel Islands Investment under Luxembourg Law Annual report and accounts For the year ended 31 December 2013 Contents Market overview 2-3 Material changes to the 4 Annualised performance over 5 years 5-8 Calendar year performance over 5 years 9-10 The Directors of the 14 Report of the Directors 15 Statistical Information Portfolio details Schedule of Investments Statement of Operations Statement of Changes in Statement of Assets and Liabilities Notes forming part of the financial statements Independent Auditor s report to the Shareholders 311 Performance Records Investment objectives and policy Risk considerations Risk Management Additional Information for Investors in the Federal Republic of Germany 354 Notice to Investors in Switzerland 354 Notice of Meeting 355 Portfolio Turnover 356 European Union Savings Directive 357 Report of the Custodian 357 Administration of the 358 How to contact Investec 359 Investec Global Strategy 1

4 Market overview All returns are in US dollar terms, 1 January 2013 to 31 December 2013, unless otherwise stated. Overview Emerging markets were the preferred destination for investors capital in the aftermath of the fi nancial crisis. These economies were touted as the new engines of global growth, contrasted to the stagnating and debt laden economies of developed markets. However, investors love for emerging markets is best described as fi ckle and the last year saw a marked reversal in fortune. The pace of Chinese economic growth slowed and with it several other emerging market economies. Markets grew concerned about the widening current account defi cits exhibited in some key emerging economies. Meanwhile market perceptions that the US would begin to reduce its bond-buying programme and so bring an end to the era of easy money, encouraged the exodus of funds from emerging markets. In particular, the so-called fragile fi ve economies of Brazil, India, Indonesia, South Africa and Turkey have been identifi ed by commentators as most at risk as the US Federal Reserve (Fed) withdraws quantitative easing (QE) and funds fl ow out of emerging markets. In contrast, the appeal of developed markets improved considerably, as the economic recovery fi nally gained momentum. The US in particular enjoyed a steady improvement and it was joined by relatively robust growth in the UK and Japan. The euro zone also recovered, although with a limp, rather than a bounce, out of recession. To taper, or not to taper? The collapse of Lehman Brothers in September 2008 ushered in the fi nancial crisis, and with it the era of QE the purchase of bonds by central banks to drive down interest rates and stimulate the economy. Five years on, QE has become a wellknown catchphrase, regarded as the medicine keeping the ailing patient the global economy ticking over. In 2013, a new buzzword emerged: tapering. This has been used by the Fed to reference the gradual move away from the historic era of extraordinary monetary stimulus. Since May 2013, when Ben Bernanke, then Fed chair, began talk of tapering QE the subject has dominated markets and investor sentiment. In December 2013, positive US economic data tipped the balance and the Fed fi nally pulled the trigger announcing that it would scale back QE to the tune of US$10 billion a month to $75 billion. By this time the move had been more or less priced in by markets and was largely welcomed as a sign the economy is on a fi rmer footing and the postcrisis headwinds are starting to abate. Efforts by the Fed to fi ne-tune its communication about tapering have arguably paid off based on the relatively muted reaction by markets. Bernanke, taking his fi nal bow as chairman, was eager to hammer the point home that tapering is not tightening and that any scaling back of QE will be data dependent signs of an economic slowdown could prompt a pause in tapering until the numbers improve. The sun rises on Japan At the advent of his appointment, the Japanese prime minister, Shinzo Abe, set out to revive the Japanese economy via a three-arrow strategy dubbed Abenomics. The strategy consists of expansionary monetary policy, increased government spending and the implementation of economic growth strategies aimed at encouraging private investment. The early effects of the programme triggered a surge in the economy which has suffered from more than a decade of defl ation. A year after its inception, Abenomics has seen Japanese bank lending noticeably pick up, while the labour market shows signs of a broader-based recovery and the weak yen increased total exports to the US, Asia and Europe. There was also a welcome increase in infl ation, a positive step towards the 2% infl ation target set out by the Bank of Japan. Moreover, Japan has enjoyed four successive quarters of positive growth the longest run in three years. However, after growth rates of 4.3% and 3.8% in the fi rst and second quarters respectively, the economy grew by a sharply slower rate of 1.9% in the third quarter as capital spending moderated along with consumption and exports. Abenomics has, however, not been a cure-all, experiencing diffi culties in translating into higher wages and increased private investment. Consumer spending has lost steam and companies have remained reluctant to invest. Euro zone woes sneak under the radar In many ways it was a positive year for the euro zone. Yields on the sovereign debt of the most vulnerable members fell over the year, and with the exception of the brief turmoil surrounding the Cypriot bailout deal in April, there was relative calm. Indeed, with investors attention distracted by the prospect of QE tapering and the slowing Chinese economy, the euro zone fell largely under the radar. Eurozone GDP grew by 0.3% in the second quarter of 2013, ending six consecutive quarters of negative growth and recession. Germany and France led the revival, as both economies rebounded. There was also a slow but gradual improvement in the southern European economies. However, Spain only limped out of recession towards the end of the year, while the Italian economy has only just stopped shrinking and Greece remains fi rmly in depression. Overall euro-zone third quarter GDP growth moderated to just 0.1%, with a worrying drop in French output. Unemployment in the euro zone rose to its highest level since the formation of the currency union. Moreover youth unemployment reached a record high of 24.4% in November. Optimism towards the euro zone started to wane in the latter months of the year as growth stalled and euro-zone core infl ation fell to just 0.7%, leading to the worrying spectre of Japan-style defl ation taking hold. So what did this mean for markets? Global Equities It has been a good year for global equities. Central banks maintained the fl ow of easy money and the gradual improvement in fundamentals in developed markets helped boost corporate earnings. The MSCI All Country World Index returned 22.8% over the year. Consumer discretionary was the best performing sector partly due to the strengthening of consumer spending in developed markets. In the US, corporate earnings strengthened through The S&P 500 Index returned 31.5%. The relative calm in Europe and modest improvement in macroeconomic fundamentals 2 Investec Global Strategy

5 allowed equities to rally through the period with the MSCI Europe Index up 25.2%. In the UK the annual return on the FTSE 100 Index was 20.9%. markets in Japan, buoyed by Abenomics enjoyed an excellent period, with the TOPIX up 27.0% over the period. However, equity performance in emerging markets was poor, with the MSCI Emerging Markets NR Index falling by 2.6%. Fixed Income The bond market was dominated by the prospect of the Fed tapering QE. This drove sovereign and corporate bond yields higher in the US and in most developed markets. In the aftermath of the Fed announcing its intention to reduce the pace of QE, many core bond yields ended the year at their highest point, with US and UK 10-year Treasuries pushing through the 3% barrier. Japanese government debt ended lower, helped by the Bank of Japan s bondbuying programme (part of Abenomics ). The relative calm in Europe allowed southern European sovereign bonds to recover. By the end of the year Spanish, Italian and Greek bonds had seen a substantial fall in yields and spreads over German Bunds. Emerging market debt enjoyed signifi cant infl ows in the fi rst few months of the year. However from May onwards it was a challenging period for emerging market debt. The asset class suffered capital outfl ows as investor confi dence waned amid fears of QE tapering in the US and a slowdown in China. Concerns also hurt emerging market currencies, which generally depreciated against the dollar. There was particular market aversion towards those emerging markets with large current account defi cits. Commodities & Resources Commodities and resource equities had mixed fortunes over the year under review. A heavy sell-off in gold and silver occurred in April 2013, largely driven by hedge funds betting against gold prices and large gold exchange-traded commodity (ETC) liquidations. Gold remained under pressure heading into the fi nal quarter, leading up to the Fed meeting. Gold fell further following the tapering announcement, dipping below $1,200 per ounce a three and half year low. Base metals & bulks were under pressure from weaker Chinese data released towards the end of the second quarter. However, economic activity did pick up in the second half of the year following more supportive policy reforms to assist growth by the Chinese government. Energy prices were well supported over the year. Despite the escalating tensions in the Middle East, Brent crude oil was relatively fl at, while US natu ral gas was up over 25% for the year, benefi ting from colder weather and lower storage numbers, compared to the previous year. The agriculture & softs sector detracted heavily over the year. Record crop yields for corn, coupled with strong wheat demand from China, saw prices drop sharply. Better weather in Brazil assisted sugar cane growth, pushing sugar prices lower. The Dow Jones-UBS Commodities Index fell 8.5% during the year. Investec Global Strategy 3

6 Material changes to the The following material changes to the were undertaken during the year ended 31 December 2013, having received prior approval from the Board of Directors and the CSSF, the Luxembourg regulator. Where appropriate, notices were sent to shareholders notifying them of the respective changes: Sub- Launches Launch of the Emerging Markets Investment Grade Corporate Debt on 31 May Launch of the Emerging Markets Debt Total Return on 2 December Launch of the Asia Local Currency Bond on 2 December Launch of the Global Diversified Growth on 2 December Sub- Mergers Merger of the Investec US$ Liquidity, Investec Sterling Liquidity and Investec Euro Liquidity (Sub-s of the Investec Liquidity s plc. range) into the U.S. Dollar Money, Sterling Money and Euro Money respectively, on 14 June Sub- Liquidations Liquidation of the Africa High Income on 31 May Other Material Changes Name change of the Global Defensive Bond to Global Diversified Income on 31 May Name change of the Global Contrarian to Global Value on 30 November Investec Global Strategy

7 Sub- performance record (Annualised performance over 5 years) Currency, Multi-Asset and Fixed Income Sub-s Sub-s and sector average % Money Sub-s Reference currency 1 Year % change 2 year annualised % change 3 year annualised % change 5 year annualised % change 3 year volatility annualised Euro Money EUR (0.22) (0.14) Lipper Global Money Market EUR Average EUR Sterling Money GBP Lipper Global Money Market GBP Average GBP U.S. Dollar Money US$ (0.01) Lipper Global Money Market US$ Average US$ Multi-Currency Sub-s Emerging Markets Currency Alpha US$ (4.39) (2.80) (3.22) (0.18) 5.15 Lipper Alternative Currency Strategies Average US$ (3.69) 1.51 (0.53) Emerging Markets Currency US$ (4.06) 0.89 Lipper Alternative Currency Strategies Average US$ (3.69) 1.51 (0.53) Managed Currency US$ (1.77) (0.64) (1.93) Lipper Global Money Market Global Average US$ (0.20) Bond Sub-s Emerging Markets Blended Debt US$ (8.88) Lipper Bond Emerging Markets Global LC Average US$ (8.85) Emerging Markets Corporate Debt US$ (1.37) 7.26 Lipper Bond Emerging Markets Global HC Average US$ (3.81) Emerging Markets Hard Currency Debt * US$ (7.93) 3.67 Lipper Bond Emerging Markets Global HC Average US$ (3.81) Emerging Markets Investment Grade Debt * US$ (8.89) 2.53 Lipper Bond Emerging Markets Global LC Average US$ (8.85) Emerging Markets Local Currency Debt US$ (11.50) 1.45 (0.60) Lipper Bond Emerging Markets Global LC Average US$ (8.85) Emerging Markets Local Currency Dynamic Debt US$ (11.07) 1.14 Lipper Bond Emerging Markets Global LC Average US$ (8.85) Global Bond US$ (5.31) (1.13) (0.25) Lipper Global Bond Global Average US$ Global Strategic Income * US$ (4.60) Lipper Global Bond Global Average US$ High Income Bond * EUR Lipper Global Bond EUR High Yield Average EUR Investment Grade Corporate Bond US$ Lipper Global Bond US$ Corporates Average US$ (0.17) Latin American Corporate Debt US$ (4.08) Lipper Bond Emerging Markets Latin American Average US$ (8.31) Multi-Asset Sub-s Emerging Markets Multi-Asset US$ (4.26) 4.96 Lipper Global Mixed Asset US$ Bal - Global Average US$ Global Diversified Income * US$ Lipper Global Mixed Asset US$ Bal - Global Average US$ Global Strategic Managed US$ Lipper Global Mixed Asset US$ Bal - Global Average US$ The Emerging Markets Currency Alpha was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name which was domiciled in Guernsey. This performance shows the performance of the High Income Bond (Euro), which changed its name to High Income Bond on This performance shows the performance of the High Income Bond (U.S. Dollar), which changed its name to the Investment Grade Corporate Bond on The sector average is based on the sector in which the High Income Bond (U.S. Dollar) was classified. The performance record shown is that of the Global Defensive Bond, which changed its name to Global Diversified Income on The s objective was also changed on this date. Investec Global Strategy 5

8 Sub- performance record (Annualised performance over 5 years) (continued) Currency, Multi-Asset and Fixed Income Sub-s (continued) Reference currency 1 Year % change 2 year annualised % change 3 year annualised % change 5 year annualised % change 3 year volatility annualised Market indicators Bond markets Regions Citigroup World Govt. Bond All Maturities Global US$ (4.00) (1.22) Citigroup World Govt. Bond Euro Europe EUR Citigroup World Govt. Bond UK UK GBP (4.09) (0.74) Citigroup World Govt. Bond US US US$ (2.65) (0.37) JPMorgan Japan Govt. Bond Japan Yen Money markets Citigroup Euro 1m Eurodeposits EUR Citigroup Sterling 1m Eurodeposits GBP Citigroup US dollar 1m Eurodeposits US$ Currencies Sterling vs US dollar Euro vs US dollar (0.17) 9.41 Yen vs US dollar (17.73) (14.44) (8.28) (2.92) 8.20 Past performance should not be taken as a guide to the future. Performance would have been lower had any initial charge been included. Performance will vary between different Share Classes reflecting the fee levels of those Share Classes. As with any investment it is possible to lose capital and any yields will vary over time. Investment benefits to individual shareholders will vary in accordance with personal circumstances. Performance shown is of A Accumulation Shares except * which are A Income Shares. The performance of the Global Diversified Income is of F Income Shares. The performance of the Emerging Markets Investment Grade Debt is of I Accumulation Shares. Lipper Global sector percentage averages are those of relevant Lipper Global sectors filtered to include only the funds on the Lipper Offshore Mutual s (Major Offshore Domiciles) database. Source: Lipper, NAV based, gross income reinvested (with the exception of Global Gold which has no income reinvested), measured in Sub- base currency as indicated. All periods and measures to based on the prices issued to the market at that date. All market indicators are total return. Three year volatility is annualised volatility as measured by standard deviation of monthly returns. No performance has been shown for the Asia Local Currency Bond, Emerging Markets Debt Total Return, Emerging Markets Investment Grade Corporate Debt and Global Diversified Growth as these s were launched during the period under review. 6 Investec Global Strategy

9 Sub-s Sub-s and sector average % Sub-s Reference currency 1 Year % change 2 year annualised % change 3 year annualised % change 5 year annualised % change 3 year volatility annualised Africa Opportunities US$ (3.53) 7.05 (4.29) Lipper Emerging Markets Other Average US$ (0.43) American US$ Lipper US Average US$ Asia Pacific * US$ Lipper Global Asia Pacific Ex Japan Average US$ Asian US$ Lipper Global Asia Pacific Ex Japan Average US$ EAFE * US$ Lipper Global Global ex US Average US$ Emerging Markets US$ Lipper Emerging Markets Global Average US$ (0.16) 7.60 (3.08) Enhanced Global Energy US$ (5.24) Lipper Global Sector Natural Resource Average US$ (1.25) (2.17) (7.43) Enhanced Natural Resources US$ (4.82) (2.34) (7.62) Lipper Global Sector Natural Resource Average US$ (1.25) (2.17) (7.43) European US$ Global Dynamic US$ Lipper Global Global Average US$ Global Endurance * US$ Lipper Global Global Average US$ Global Energy US$ Lipper Global Sector Natural Resource Average US$ (1.25) (2.17) (7.43) Global Energy Long Short * US$ (3.49) Lipper Alternative Long/Short Average US$ Global US$ Lipper Global Global Average US$ Global Franchise US$ Lipper Global Global Average US$ Global Gold US$ (43.81) (27.87) (25.52) (1.62) Lipper Global Sector Gold & Precious Metals Average US$ (49.12) (34.72) (31.72) (3.75) Global Natural Resources US$ (3.09) (1.94) (8.89) Lipper Global Sector Natural Resource Average US$ (1.25) (2.17) (7.43) Global Opportunity * US$ Lipper Global Global Average US$ Global Strategic US$ Lipper Global Global Average US$ Global Value US$ Lipper Global Global Average US$ Latin American US$ (14.75) 1.19 (9.26) Lipper Emerging Markets Latin American Average US$ (12.85) (1.60) (9.40) Latin American Smaller Companies US$ (16.23) Lipper Emerging Markets Latin American Average US$ (12.85) (1.60) (9.40) UK GBP Lipper Global UK Average GBP Specialist Sub- Dynamic Commodities US$ (8.81) (5.41) Dow Jones UBS Commodity TR US$ (9.52) (5.38) (8.11) The performance record shown is that of the Continental European, which changed its name to European on The s objective was changed on and therefore no performance comparison index has been shown. The Global Energy Long Short was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name which was domiciled in Guernsey. The Global Franchise was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from its predecessor fund known as the Investec Global Select. The Global Opportunity was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name within the Premier s PCC Limited umbrella. The Global Value, previously Global Contrarian, was launched on within the Investec Global Strategy umbrella. The performance record shown has been synthesised from the UK domiciled Global Special Situations, which is managed in the same way. The synthesised performance takes account of the difference in the total fees of the two s. Investec Global Strategy 7

10 Sub- performance record (Annualised performance over 5 years) (continued) Sub-s (continued) Reference currency 1 Year % change 2 year annualised % change 3 year annualised % change 5 year annualised % change 3 year volatility annualised Market indicators markets Regions Dow Jones UBS Commodity US US$ (9.52) (5.38) (8.11) FTSE All Share UK GBP Hang Seng Hong Kong US$ MSCI Europe Europe EUR MSCI Europe ex UK Europe US$ MSCI AC Asia ex Japan Hong Kong US$ MSCI AC Far East ex Japan Hong Kong US$ MSCI AC World Global US$ MSCI World Global US$ NASDAQ Composite # US US$ S&P 500 US US$ Topix Japan US$ Past performance should not be taken as a guide to the future. Performance would have been lower had any initial charge been included. Performance will vary between different Share Classes reflecting the fee levels of those Share Classes. As with any investment it is possible to lose capital and any yields will vary over time. Investment benefits to individual shareholders will vary in accordance with personal circumstances. Performance shown is of A Accumulation Shares except * which are A Income Shares. The performance of the Global Endurance, Global Energy Long Short and Dynamic Commodities is of the S Acc Share class. Lipper Global sector percentage averages are those of relevant Lipper Global sectors filtered to include only the funds on the Lipper Offshore Mutual s (Major Offshore Domiciles) database. Source: Lipper, NAV based, gross income reinvested (with the exception of Global Gold which has no income reinvested), measured in Sub- base currency as indicated. All periods and measures to based on the prices issued to the market at that date. All market indicators are total return indices except # which are price indices with no income reflected. Three year volatility is annualised volatility as measured by standard deviation of monthly returns. 8 Investec Global Strategy

11 Sub- performance record (Calendar year performance over 5 years) Currency, Multi-Asset and Fixed Income Sub-s Reference currency Money Sub-s Euro Money EUR (0.22) (0.06) Sterling Money GBP U.S. Dollar Money US$ (0.01) Multi-Currency Sub-s Emerging Markets Currency Alpha US$ (4.39) (1.19) (4.06) Emerging Markets Currency US$ (4.06) 6.10 Managed Currency US$ (1.77) 0.51 (4.47) Bond Sub-s Emerging Markets Blended Debt US$ (8.88) (1.15) Emerging Markets Corporate Debt US$ (1.37) Emerging Markets Hard Currency Debt * US$ (7.93) Emerging Markets Investment Grade Debt * US$ (8.89) Emerging Markets Local Currency Debt US$ (11.50) (4.58) Emerging Markets Local Currency Dynamic Debt US$ (11.07) Global Bond US$ (5.31) Global Strategic Income * US$ (4.60) 8.82 (2.47) High Income Bond * EUR (3.50) Investment Grade Corporate Bond US$ (0.34) Latin American Corporate Debt US$ (4.08) Multi-Asset Sub-s Emerging Markets Multi-Asset US$ (4.26) Global Diversified Income * US$ Global Strategic Managed US$ (7.92) The Emerging Markets Currency Alpha was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name which was domiciled in Guernsey. This performance shows the performance of the High Income Bond (Euro), which changed its name to High Income Bond on This performance shows the performance of the High Income Bond (U.S. Dollar), which changed its name to the Investment Grade Corporate Bond on The performance record shown is that of the Global Defensive Bond, which changed its name to Global Diversified Income on The s objective was also changed on this date. Past performance should not be taken as a guide to the future. Performance would have been lower had any initial charge been included. Performance will vary between different Share Classes reflecting the fee levels of those Share Classes. As with any investment it is possible to lose capital and any yields will vary over time. Investment benefits to individual shareholders will vary in accordance with personal circumstances. Performance shown is of A Accumulation Shares except * which are A Income Shares. The performance of the Global Diversified Income is of F Income Shares. The performance of the Emerging Markets Investment Grade Debt is of I Accumulation Shares. Source: Lipper, NAV based, gross income reinvested (with the exception of Global Gold which has no income reinvested), measured in Sub- base currency as indicated. No performance has been shown for the Asia Local Currency Bond, Emerging Markets Debt Total Return, Emerging Markets Investment Grade Corporate Debt and Global Diversified Growth as these s were launched during the period under review. Investec Global Strategy 9

12 Sub- performance record (Calendar year performance over 5 years) (continued) Sub-s Reference currency Sub-s Africa Opportunities US$ (3.53) (23.50) American US$ (14.72) Asia Pacific * US$ (16.34) Asian US$ (16.18) EAFE * US$ (16.64) Emerging Markets US$ Enhanced Global Energy US$ (20.32) Enhanced Natural Resources US$ (4.82) 0.21 (17.33) European US$ (17.61) Global Dynamic US$ (6.69) Global Endurance * US$ Global Energy US$ (13.61) Global Energy Long Short * US$ 8.31 (0.71) (19.22) Global US$ (7.00) Global Franchise US$ Global Gold US$ (43.81) (7.39) (20.59) Global Natural Resources US$ (3.09) (0.77) (21.36) Global Opportunity * US$ Global Strategic US$ (9.37) Global Value US$ (9.21) Latin American US$ (14.75) (27.03) Latin American Smaller Companies US$ (16.23) UK GBP (6.40) Specialist Sub- Dynamic Commodities US$ (8.81) (1.89) The performance record shown is that of the Continental European, which changed its name to European on The Global Energy Long Short was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name which was domiciled in Guernsey. The Global Franchise was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from its predecessor fund known as the Investec Global Select. The Global Opportunity was launched on within the Investec Global Strategy umbrella; however, its performance record has been carried over from a predecessor fund of the same name within the Premier s PCC Limited umbrella. The Global Value, previously Global Contrarian, was launched on within the Investec Global Strategy umbrella. The performance record shown has been synthesised from the UK domiciled Global Special Situations, which is managed in the same way. The synthesised performance takes account of the difference in the total fees of the two s. Past performance should not be taken as a guide to the future. Performance would have been lower had any initial charge been included. Performance will vary between different Share Classes reflecting the fee levels of those Share Classes. As with any investment it is possible to lose capital and any yields will vary over time. Investment benefits to individual shareholders will vary in accordance with personal circumstances. Performance shown is of A Accumulation Shares except * which are A Income Shares. The performance of the Global Endurance, Global Energy Long Short and Dynamic Commodities is of the S Acc Share class. Source: Lipper, NAV based, gross income reinvested (with the exception of Global Gold which has no income reinvested), measured in Sub- base currency as indicated. 10 Investec Global Strategy

13 The The Investec Global Strategy (the ) was initially established in Guernsey on 5 January 1984 and was re-domiciled to Luxembourg on 1 July The is authorised under Part I of the Luxembourg law of 17 December 2010 relating to undertakings for collective investment (loi concernant les organismes de placement collectif). As a self-managed société d investissement à capital variable (SICAV), the complies with the requirements of Article 27 of the Law of The qualifies as an Undertaking for Collective Investments in Transferable Securities (UCITS) under Article 1 paragraph 2, points a) and b) of the Directive 2009/65/EC of 13 July 2009 of the European Parliament and the Council, and may therefore be offered for sale in EU Member States (subject to registration in EU Member States other than Luxembourg). In addition, applications to register the may be made in other countries. The consisted of the following 48 Sub-s as at 31 December 2013: Money Sub-s: Euro Money Sterling Money U.S. Dollar Money Multi-Currency Sub-s: Emerging Markets Currency Alpha Emerging Markets Currency Managed Currency Bond Sub-s: Asia Local Currency Bond Emerging Markets Blended Debt Emerging Markets Corporate Debt Emerging Markets Debt Total Return Emerging Markets Hard Currency Debt Emerging Markets Investment Grade Corporate Debt Emerging Markets Investment Grade Debt Emerging Markets Local Currency Debt Emerging Markets Local Currency Dynamic Debt Global Bond Global Strategic Income High Income Bond Investment Grade Corporate Bond Latin American Corporate Debt Multi-Asset Sub-s: Emerging Markets Multi-Asset Global Diversified Growth Global Diversified Income Global Strategic Managed Sub-s: Africa Opportunities American Asia Pacific Asian EAFE Emerging Markets Enhanced Global Energy Enhanced Natural Resources European Global Dynamic Global Endurance Global Energy Global Energy Long Short Global Global Franchise Global Gold Global Natural Resources Global Opportunity Global Strategic Global Value Latin American Latin American Smaller Companies U.K. Specialist Sub-: Dynamic Commodities Investec Global Strategy 11

14 Registrations for Distribution As at 31 December 2013, the Investec Global Strategy was registered for distribution in the following countries as outlined in the table below. Investec Global Strategy Austria Belgium Botswana Chile (Inst l) ~ Denmark (Inst l) > Finland France Germany Hong Kong * Ireland Italy (Inst l) ** Italy (Retail) ^ Luxembourg Macau Netherlands Norway Peru (Inst l) ~ Singapore South Africa Spain Sweden Switzerland Taiwan UK Euro Money Sterling Money U.S. Dollar Money Emerging Markets Currency Alpha Emerging Markets Currency Managed Currency Asia Local Currency Bond Emerging Markets Blended Debt Emerging Markets Corporate Debt Emerging Markets Debt Total Return Emerging Markets Hard Currency Debt Emerging Markets Investment Grade Corporate Debt Emerging Markets Investment Grade Debt Emerging Markets Local Currency Debt Emerging Markets Local Currency Dynamic Debt Global Bond Global Strategic Income High Income Bond Investment Grade Corporate Bond Latin American Corporate Debt Emerging Markets Multi-Asset Global Diversifi ed Growth Global Diversifi ed Income Global Strategic Managed Africa Opportunities American Asia Pacifi c Asian EAFE Emerging Markets Enhanced Global Energy Enhanced Natural Resources European Global Dynamic Global Endurance 12 Investec Global Strategy

15 Investec Global Strategy Austria Belgium Botswana Chile (Inst l) ~ Denmark (Inst l) > Finland France Germany Hong Kong * Ireland Italy (Inst l) ** Italy (Retail) ^ Luxembourg Macau Netherlands Norway Peru (Inst l) ~ Singapore South Africa Spain Sweden Switzerland Taiwan UK Global Energy Global Energy Long Short Global Global Franchise Global Gold Global Natural Resources Global Opportunity Global Strategic Global Value Latin American Latin American Smaller Companies U.K. Dynamic Commodities Footnotes Chile and Peru Denmark Hong Kong Italy Norway Spain Singapore Taiwan ~ Institutional registration - to be distributed to AFPs (Pension s) only > For Institutional Investors Only * D, G, GX, I IX & S shares are not available to the public of Hong Kong ** For Institutional Investors Only. A, F, I & IX shares are registered for sale + G and GX shares for Enhanced Natural Resources ^ Available to Retail Investors. Only A shares are available to Retail Investors For Institutional Investors Only- except Global which is available for retail investors Only A, F, I & IX shares are registered for sale + G and GX shares for Enhanced Natural Resources Recognised as restricted foreign schemes (available to institutions and accredited investors only) Only A Inc, C Inc and F Acc Shares are registered for sale Investec Global Strategy 13

16 Directors of the The directors who held office during the year ended 31 December 2013, are as follows: Hendrik Jacobus du Toit (Chairman) c/o Investec Asset Management Limited Woolgate Exchange 25 Basinghall Street London EC2V 5HA United Kingdom Grant David Cameron c/o Investec Asset Management Guernsey Limited PO Box 250, Glategny Court, Glategny Esplanade St. Peter Port, Guernsey GY1 3QH Channel Islands Gregory David Cremen 19 rue de Bitbourg L-1273 Luxembourg Grand Duchy of Luxembourg John Conrad Green c/o Investec Asset Management (Pty) Limited 36 Hans Strijdom Avenue Foreshore Cape Town 8001 South Africa Kim Mary McFarland c/o Investec Asset Management Limited Woolgate Exchange 25 Basinghall Street London EC2V 5HA United Kingdom Claude Niedner Arendt & Medernach 14, rue Erasme L-2082 Luxembourg Grand Duchy of Luxembourg Michael Edward Charles Ryder Richardson c/o Investec Asset Management Limited Woolgate Exchange 25 Basinghall Street London EC2V 5HA United Kingdom 14 Investec Global Strategy

17 Report of the Directors The Directors submit their Report and the Audited Accounts for the year ended 31 December Results The results for the year are shown in the Statement of Operations on pages 250 to 257. Directors The Directors of the as at 31 December 2013 are set out on page 14. There are no service contracts proposed or in existence between any of the Directors and the, but the Directors may receive remuneration as provided in the Articles of Incorporation. There are no contracts of signifi cance during or at the end of the year in which a Director of the is or was materially interested. Directors responsibilities The Directors are responsible for preparing fi nancial statements for each fi nancial year which give a true and fair view of the state of affairs of the and of the Statement of Operations of the for that year and are in accordance with applicable laws. In preparing those fi nancial statements the Directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed subject to any material departures disclosed and explained in the financial statements; and prepare financial statements on the going concern basis unless it is inappropriate to presume that the will continue in business. The Directors are responsible for keeping proper accounting records which disclose, with reasonable accuracy at any time, the fi nancial position of the and to enable them to ensure that the fi nancial statements have been properly prepared in accordance with Luxembourg law on Undertakings for Collective Investment. They are also responsible for safeguarding the assets of the and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditors A resolution for the re-appointment of KPMG Luxembourg S.à r.l., Luxembourg will be proposed at the forthcoming annual general meeting. Signed on behalf of the Board of Directors 29 April 2014 G D Cameron Director G D Cremen Director Investec Global Strategy 15

18 Statistical Information as at 31 December 2013 Outstanding Shares as at Net Asset Value per Share as at Net Assets as at 31-Dec Dec Dec Dec Dec Dec Dec-11 Euro Money A, Acc, EUR 348, ,977,210 27,303,065 29,806,294 A, Inc, EUR 147, ,848,773 4,409,525 6,052,324 C, Inc, EUR ,697 5,903 D, Acc, EUR 18, ,244,872 1,753,662 2,145,965 D, Inc, EUR 14, , , ,501 I, Acc, EUR 200, ,991,133 I, Inc, EUR 10, ,304 Sterling Money A, Acc, GBP 837, ,266,359 50,593,813 62,811,846 A, Inc, GBP 859, ,562,955 11,032,410 14,399,568 C, Inc, GBP ,256 D, Acc, GBP 37, ,100,174 2,097,474 1,562,264 D, Inc, GBP 26, , , ,986 I, Acc, GBP 630, ,935,773 I, Inc, GBP 66, ,991,711 S, Inc, GBP 3,548, ,464,395 U.S. Dollar Money A, Acc, USD 2,184, ,346, ,112, ,747,132 A, Inc, USD 1,151, ,094,169 23,077,869 29,450,665 C, Inc, USD 81, ,611, , ,188 D, Acc, USD 654, ,289, ,182,936 20,734,960 D, Inc, USD 11, , , ,709 F, Acc, USD 207, ,476,247 3,607,716 7,914,826 I, Acc, USD 1,592, ,981,925 22,886,588 6,412,545 I, Inc, USD 168, ,369,107 S, Inc, USD 1,721, ,434,802 Emerging Markets Currency Alpha A, Acc, USD 12, ,075 1,586,153 2,124,962 S, Acc, USD 5, ,498 34,545,609 44,932,634 S, Acc, EUR, Hedged ,143, ,031 S, Acc, GBP, Hedged 650, ,983,645 12,601,258 12,508,224 Emerging Markets Currency A, Acc, USD 49, ,652 2,861,890 1,771,647 C, Acc, USD , , ,245 F, Inc, USD 4, ,402 90,296 23,102 I, Acc, USD 5,535, ,755,905 61,078,089 52,720,635 S, Acc, USD 2,194, ,471,719 43,279,214 21,400,865 S, Acc, EUR 287, ,782,535 15,755,663 16,933,367 Managed Currency A, Acc, USD 211, ,035,522 68,338,191 78,390,829 A, Inc, USD 524, ,104,623 19,934,939 35,033,769 C, Inc, USD 70, ,198,074 1,273,160 2,200,175 F, Acc, USD 9, , , ,556 F, Inc, USD , ,105 I, Acc, USD 1, , ,759 3,120,893 S, Acc, USD 3, ,746 38, Africa High Income C, Inc, USD ,314 F, Inc, USD ,789 9,335 S, Inc, USD ,180,991 9,394,618 Asia Local Currency Bond C, Inc, USD ,930 F, Inc, USD ,933 IX, Inc, USD ,942 S, Inc, USD 1,000, ,897, Investec Global Strategy

19 Outstanding Shares as at Net Asset Value per Share as at Net Assets as at 31-Dec Dec Dec Dec Dec Dec Dec-11 Emerging Markets Blended Debt A, Acc, USD 21, , , ,585 A, Inc, USD 2, ,746 55,166 27,199 C, Inc, USD 125, ,188,259 1,794,082 9,440 F, Acc, USD 163, ,395,994 3,774, ,232 F, Inc, USD 211, ,746,954 2,628,124 58,884 I, Acc, USD ,006 I, Inc, USD ,912 I, Inc, USD ,408 IX, Inc, USD 26, ,008 10,116 S, Acc, USD 5,620, ,567, ,447,311 50,924,259 Emerging Markets Corporate Debt A, Acc, USD 139, ,105,138 1,989, ,909 A, Inc, USD 5, ,805 10,316 A, Inc, HKD ,777 79,978 C, Acc, USD 794, ,396,825 15,586,933 9,658 C, Inc, USD 749, ,948,642 6,927,972 F, Acc, USD 1,316, ,282,555 16,168, ,873 F, Inc, USD 373, ,491,761 1,994,904 I, Acc, USD 613, ,070,648 7,496,097 9,774 I, Acc, EUR 1,110, ,007,377 IX, Inc, USD ,008 10,065 S, Acc, USD 8,254, ,926, ,060,573 48,608,955 S, Acc, GBP 579, ,594,140 11,469,187 10,081,828 Emerging Markets Debt Total Return IX, Inc, USD ,973 S, Inc, USD 500, ,979,822 Emerging Markets Hard Currency Debt A, Acc, USD ,509 A, Inc, USD 8, ,885 3,669,825 29,208 C, Acc, USD ,454 C, Inc, USD ,995 12,089 10,437 F, Acc, USD ,496 F, Inc, USD 11, ,830 36,951 10,468 I, Acc, USD , ,031 I, Inc, USD ,543 IX, Inc, USD 2, ,786 10,029 S, Acc, USD 1,072, ,411,922 26,640,758 22,356,451 S, Acc, GBP 1,313, ,181,590 36,563,901 32,203,086 Emerging Markets Investment Grade Corporate Debt IX, Inc, USD ,724 S, Inc, USD 4,574, ,607,877 Emerging Markets Investment Grade Debt I, Acc, USD 18,922, ,907, ,541, ,974,308 IX, Inc, USD ,335 10,263 Emerging Markets Local Currency Debt A, Acc, USD 642, ,510,136 54,924,587 63,257,889 A, Inc, USD 1,951, ,076,541 65,118,241 65,174,635 C, Acc, USD 78, ,472,798 3,655,678 C, Inc, USD 7,606, ,809, ,978, ,587,824 F, Acc, USD 973, ,751,084 52,119,868 48,139,649 F, Inc, USD 3,161, ,054,923 90,577,955 92,740,870 F, Inc, EUR 10, , , ,728 I, Acc, USD 15,092, ,517, ,666, ,990,751 I, Acc, EUR 10,238, ,189, ,048, ,712,131 I, Inc, USD 4,821, ,969, ,439, ,880,802 IX, Inc, USD 4, ,360 10,193 S, Acc, USD 4,452, ,036, ,499, ,319,527 S, Acc, GBP 5,171, ,685, ,759, ,543,992 S, Inc, USD 3,126, ,581, ,939, ,337,541 Investec Global Strategy 17

20 Statistical Information (continued) as at 31 December 2013 Outstanding Shares as at Net Asset Value per Share as at Net Assets as at 31-Dec Dec Dec Dec Dec Dec Dec-11 Emerging Markets Local Currency Dynamic Debt A, Acc, USD 788, ,457,074 15,841,459 54,856 A, Acc, EUR ,848 18,606 A, Acc, GBP ,895 A, Inc, USD ,971 9,545 A, Inc, GBP 17, , , ,427 C, Inc, USD 34, , ,833 77,523 F, Acc, USD 4, ,171 35, ,201 F, Inc, USD 10, , ,661 72,847 I, Acc, USD 5,040, ,528, ,908, ,915,194 I, Acc, EUR 5,474, ,183,948 1,064 I, Acc, GBP ,066 9,980 I, Inc, USD 37, ,645 19,477,206 9,628 I, Inc, EUR ,817 I, Inc, GBP ,007 9,937 IX, Inc, USD ,134 10,192 S, Acc, USD 28,683, ,485, ,897,973 17,386,791 S, Acc, EUR 16,855, ,085, ,983,394 91,985,703 S, Acc, GBP 4,718, ,380,534 11,375,860 11,428,457 Global Bond A, Acc, USD 341, ,514,212 67,819,630 51,651,947 A, Inc, USD 796, ,092,548 35,855,270 36,308,187 C, Inc, USD 404, ,072,124 14,765,439 5,686,091 D, Inc, USD 2, , , ,590 F, Acc, USD 381, ,716,146 18,548,400 9,003,806 I, Acc, USD 3,951, ,831,880 94,089,962 45,098,986 S, Acc, USD 421, ,219,087 7,042,360 6,752,940 Global Strategic Income A, Acc, USD 1,724, ,633,896 63,615,365 63,906,620 A, Inc, USD 1,882, ,242,982 51,425, ,799,378 C, Acc, USD 150, ,953,386 2,318,505 C, Inc, USD 5,468, ,537, ,986, ,106,743 F, Acc, USD 694, ,642,487 29,863,320 28,882,513 F, Inc, USD 1,097, ,781,214 37,538,325 32,885,975 F, Inc, EUR ,274 I, Acc, USD 3,235, ,421,187 84,902,948 99,639,584 I, Inc, USD 126, ,383,851 10,400 IX, Inc, USD 16, ,786 10,035 S, Acc, USD 5,488, ,295,294 96,734, ,529,735 S, Acc, EUR, Hedged 2, , ,070,183 47,086,189 High Income Bond A, Acc, GBP, Hedged 62, ,636,947 5,185,943 4,664,438 A, Inc, EUR 493, ,317,392 8,944,285 7,819,595 A, Inc, GBP, Hedged 264, ,480,096 4,634,443 4,269,815 C, Acc, USD, Hedged 106, ,184,954 C, Inc, EUR 688, ,345,580 13,749,540 13,092,027 C, Inc, AUD, Hedged (IRD) ,996 C, Inc, USD 272, ,274,714 1,335,561 8,793 C, Inc, USD, Hedged 2,482, ,593,742 C, Inc, ZAR, Hedged (IRD) 1, ,960 F, Acc, EUR 19, , , ,221 F, Acc, USD 161, ,331,118 1,529, ,779 F, Acc, USD, Hedged 3,127, ,215,692 F, Inc, USD 504, ,879,954 6,981,206 2,794,673 F, Inc, USD, Hedged 2,473, ,288, , ,332 I, Acc, EUR I, Acc, USD, Hedged 61, ,295,678 I, Inc, USD, Hedged 8, ,138 S, Acc, EUR 873, ,156,257 49,720,058 42,383, Investec Global Strategy

21 Outstanding Shares as at Net Asset Value per Share as at Net Assets as at 31-Dec Dec Dec Dec Dec Dec Dec-11 Investment Grade Corporate Bond A, Acc, USD 248, ,271,384 10,728,648 9,570,255 A, Inc, USD 430, ,339,230 20,856,804 25,818,827 A, Inc, EUR, Hedged 517, ,987,063 11,288,114 9,607,379 A, Inc, GBP, Hedged 841, ,727,273 14,595,172 42,715,442 C, Inc, USD 1,741, ,486,468 61,464,302 38,867,561 C, Inc, AUD, Hedged (IRD) ,974 C, Inc, EUR, Hedged 14, , , ,378 C, Inc, ZAR, Hedged (IRD) 1, ,564 D, Inc, USD 2, ,900 69, ,609 F, Acc, USD 588, ,731,017 16,783,685 15,424,787 F, Inc, USD 820, ,828,591 12,716,762 7,291,327 I, Acc, USD 410, ,037,539 18,364,378 31,893,993 S, Acc, USD 986, ,868,725 20,360,461 15,782,356 S, Inc, GBP, Hedged , ,643 Latin American Corporate Debt A, Acc, USD 3,572, ,399, ,754,433 81,468,946 A, Inc, USD 1,917, ,005,236 36,196,686 4,615,319 C, Acc, USD 743, ,120,747 14,817,841 C, Inc, USD 8,924, ,867, ,719,498 31,136,405 F, Acc, USD 2,496, ,651,360 58,337,219 3,552,841 F, Inc, USD 12,903, ,633, ,958,787 82,765,486 I, Acc, USD 7,484, ,378, ,225, ,091,877 I, Inc, USD 304, ,648,628 3,862, ,587 IX, Inc, USD 151, ,781,042 10,104 Emerging Markets Multi-Asset A, Acc, USD 3, , ,774 9,686 A, Inc, USD ,081 9,686 A, Inc-2, USD ,077 C, Acc, USD ,490 11,046 9,681 C, Inc-2, USD ,075 F, Acc, USD ,621 11,117 9,685 F, Inc-2, USD ,077 I, Acc, USD ,273 9,694 I, Acc, GBP 5, ,583 88,919 6,281 IX, Inc, USD 4, ,451 10,311 S, Acc, USD 10, ,108 17,130,704 19,401,496 S, Acc, GBP 6,521, ,238,026 71,050,292 6,286 Global Diversified Growth A, Acc, USD ,087 C, Acc, USD ,082 F, Acc, USD ,086 I, Acc, USD ,095 IX, Acc, USD ,094 S, Acc, USD 4,164, ,145,228 Global Diversified Income A, Acc, USD ,302 A, Inc, USD ,626 A, Inc, USD 18, ,176 C, Inc, USD ,595 C, Inc, USD 243, ,896,232 I, Acc, USD ,129 I, Inc, USD ,094 IX, Inc, USD ,211 F, Inc, USD 144, ,797, ,842 9,616 S, Inc, USD 1,520, ,689,112 30,581,554 28,876,268 Investec Global Strategy 19