STANLIB Balanced Fund

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1 STANLIB Balanced Fund

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3 01 STANLIB Balanced Fund 01 Why Invest in the STANLIB Balanced Fund? 01 Investment Objective 01 How does the Investment Team Achieve this Objective? 01 Target Market Our Balanced Franchise Our Balanced Team 03 Herman van Velze 03 Robin Eagar 03 Paul Swanson 03 Warren Buhai The Specialist Teams 04 Equity Franchise 04 Fixed Interest Franchise 04 Listed Property Franchise 04 Global (Managed by Offshore Partners) About STANLIB 05 Our Belief 05 Our Franchise Model 05

4 You say future potential. We say STANLIB.

5 The Balanced Fund provides investors with exposure to a number of asset classes, domestic and foreign, that are positively and negatively correlated. This diversification of assets provides investors with the comfort that their exposure to risk is contained without unduly compromising return. STANLIB Balanced Team Why Invest in the STANLIB Balanced Fund? Љ Љ Focus: Our Balanced Team of four focus only on the asset allocation of assets and on managing the domestic equity component in the Fund, nothing else. All other asset classes property, fixed interest and offshore - are allocated to specialist teams to manage, providing clear focus on every component of the Fund ЉЉ Team diversity: Each member of the Balanced Team brings a different skill set and experience to the decision making process of the Fund. This provides varied perspectives and ideas ЉЉ Depth: The quarterly Tactical Asset Allocation (TAA) meeting, which informs the asset allocation in the Fund, relies on the input of 35 investment professionals locally, 45 across the continent, and 150 globally. This, we believe, results in well-informed asset allocation decisions ЉЉ Conviction: Our investors entrust us to make the investment decisions and as such, we tend to hold a lot of what we like and zero of what we don t Investment Objective The STANLIB Balanced Fund aims to provide capital growth over time at a lower risk than pure equity funds. It invests in a diversified spread of cash, bonds, property, equity and offshore assets with a maximum of 75% in equities and 25% direct and/or indirect foreign exposure. As the Fund is Regulation 28 compliant it is suitable for retirement savings schemes. Maximum Exposure to Growth Assets 75% 25% 25% Domestic Equity Offshore Property * Regulation 28 stipulates that the maximum exposure to Equities and Property combined is 90% How does the Investment Team Achieve this Objective? Asset allocation decisions are the starting point of STANLIB s Balanced portfolio management. Input is garnered from the in-house specialists on everything from economics to SA equity sector views and global bond input, to name but a few. This basically includes input from 35 investment professionals locally, 45 accross the continent and 150 globally which results in well-informed decisions. Once the full range of inputs has been debated, the Balanced Team formulates their long-term strategic asset allocation views. * 1

6 However, markets are fluid and therefore the asset allocation debate is a continuous one and evolves as new information becomes available, resulting in asset allocation tilts. The Team believes financial markets are inefficient. Mispricing occurs due to market participants misunderstanding of risk, value and unjustified optimism or pessimism. They tend to hold a lot of what they like and zero of what they don t. Target Market The STANLIB Balanced Fund is targeted at investors: ЉЉ Aiming to achieve capital growth with lower risk than equity-only funds ЉЉ With a time horizon of five years or more to invest ЉЉ With a moderate risk profile Our Balanced Franchise The Balanced Franchise manages the STANLIB Balanced Fund and the STANLIB Balanced Cautious Fund. A balanced investment is aimed at long-term wealth creation combined with risk diversification, which is achieved by investing in multiple asset classes. The diversification of assets within these portfolios provides investors with the comfort that their exposure to risk is contained without unduly compromising on returns. The Balanced Franchise is responsible for the management of the domestic equities as well as the tactical allocation of assets the Balanced and Balanced Cautious funds. The asset class components of these portfolios property, fixed interest and offshore are managed by specialist and dedicated teams with proven track records. Once an asset allocation decision has been made, these teams manage each underlying asset class. Equity Team Property Team Balanced Team Asset Allocation Fixed Interest Team Offshore Partners 2

7 Our Balanced Team Herman van Velze Robin Eagar Warren Buhai Paul Swanson Co-Head of Balanced and Core Equity Franchises BEng, MBL 20 Years industry service Co-Head of Balanced, Core Equity and Value Equity Franchises BSc(Eng), Accounts Conversion 17 Years industry service Senior Portfolio Manager: Balanced Franchise BCompt(Hons), CA(SA), CFA 13 Years industry service Senior Portfolio Manager: Balanced Franchise MCom (Financial Management), CFA 18 Years industry service Each member of the Balanced Team brings a different skill set and background, providing varied perspectives and ideas. Herman van Velze Herman currently co-heads STANLIB s highly successful Balanced and Core Equity Franchises. He began his investment career in 1993 as a mining analyst and resource portfolio manager, and was appointed Head of Research at Standard Corporate and Merchant Bank in Following the merger with Liberty Asset Management that formed STANLIB in 2002, Herman joined the portfolio management team responsible for specialist mandate clients, and was subsequently appointed Head of Retirement Funds. Robin Eagar Robin joined the STANLIB investment team in 2005 as an industrial analyst and shortly thereafter became a general equity manager in the Aggressive Equity space. In 2007 Robin moved to the Multi-Asset investment space where he is currently Co-Head of Balanced and Core Equity Franchises. In addition, Robin is caretaking the Value Equity Franchise. He had previously spent five years working in private equity and corporate finance in London finance investing in various emerging markets and the UK. Robin began his career in 1998 with Standard Bank s Corporate Finance team in Johannesburg, advising on corporate re-structures, mergers and acquisitions and public to private transactions. Paul Swanson As the senior portfolio manager, Paul is responsible for the day-to-day running of STANLIB Asset Management s Balanced Funds. As a member of the Financial team, he was previously responsible for managing a significant portion of Liberty s Life Funds, as well as the STANLIB Financials unit trust. He first joined the group as a financial analyst with SCMB Asset Management in 1999, and following the creation of STANLIB in 2002, took over full responsibility for the JSE s Life and Short-term insurance and General Finance sectors. Paul began his career as a junior analyst at Merrill Lynch. Warren Buhai Warren re-joined STANLIB in 2009 and is a Senior Portfolio Manager: part of a team managing more than R70 billion of balanced investments for Liberty s Life Funds. Investment decisions cover various asset classes, including equities, fixed income, property, commodities and currencies. His previous experience with STANLIB was in research and portfolio management in resources and commodity-related funds. Warren also spent five years gaining broad experience with SCMB s Corporate Finance team. In the interim, Warren also obtained experience in the US, as MD of Investments for a US$500 million private client business targeting opportunities in developed, emerging and frontier markets. 3

8 The Specialist Teams Equity Franchise The Balanced Franchise is also responsible for managing the Core Equity Franchise. They have worked together for years and leverage off each other s strengths to create team synergies evidenced in their fund performance. The Core Equity Franchise overlays their own research and convictions over the broader in-house equity research before making any buy or sell decisions. The research overlay focuses on causal drivers of earnings, cash flows and returns. They require analysts to provide extensive input into the key criteria that they believe are drivers of earnings, cash flows and returns. They believe in the importance of anticipating economic cycles and determining which industries are best placed to benefit. Fixed Interest Franchise The Fixed Interest Team, which is headed up by Henk Viljoen, is highly qualified with extensive experience in the industry and has been working together for over 10 years. The Franchise houses the Money Market, Bonds, Income and Credit Teams. Other Fixed Interest Managers typically develop skills that allow for outperformance of their benchmark through predominantly one strategy. Individual strategies can result in outperformance from time to time but they may not do so consistently. The Fixed Interest Franchise aims to exploit multiple strategies on a continuous basis, to be better positioned to outperform during all phases of the market. Listed Property Franchise The Listed Property Franchise is a leading Listed Property Manager in the country. In addition, the size of their Property book and their strong ties to Liberty Properties and Standard Bank Properties further strengthens their influence when it comes to voting, private placements and liquidity. The Franchise is headed by Keillen Ndlovu. STANLIB s specialist asset class management approach allows the Team to make use of an all-encompassing, thorough research process and portfolio construction process. The focus and dedication of the Team to a single sector only, enables the use of both a broad top-down, as well as detailed stock-specific, bottom-up approach. Global (Managed by Offshore Partners) Global Equities Threadneedle Investments Founded in 1994, Threadneedle is an established global asset manager with assets under management in excess of US$137 billion with a compliment of over 150 investment professionals. Their sole focus is the active management of client assets across equities, fixed income, commodities, multi-asset exposures and property. Threadneedle offers emerging market exposure within a diversified global portfolio of stocks. The Threadneedle investment process is driven primarily using bottom-up fundamental analysis, although some top-down analysis is applied in the context of the macro environment. Their investment style is market driven and the portfolio is not expected to display persistent style biases over different economic cycles therefore style agnostic. Their strategy exploits value opportunities during value cycles and growth opportunities during growth cycles. Global Bonds Brandywine Global Founded in 1986, Brandywine Global Investment Management manages US$48 billion in assets as at 30 September Core to their principles is seeking value not yet recognised by others. Brandywine applies a top-down, value-driven process when structuring global income portfolios. Real (inflationadjusted) yield is their primary measure of value. Currency valuation is next in importance, as the real yield must be captured in US dollars. They focus on appreciating, undervalued currencies and overvalued currencies that can be hedged. Inflation trends, political risks, monetary trends, and business cycle and liquidity measures are also considered. Brandywine typically concentrate investments in eight to 16 countries that appear to offer the best total return potential. Global Cash Fidelity Worldwide Investments Fidelity Worldwide Investment (FIL Limited) was established in 1969 and provides asset management services to investors all over the world. They have portfolio management and research staff in major financial centres around the world and offices in 25 countries. Fidelity International and its subsidiaries manage assets worth $270.4bn (as at 30 December 2013). The cornerstone of Fidelity s investment approach is research. As well as studying financial results, analysts and fund managers visit companies, meet their managers and talk to suppliers, customers and distributors, giving the investment team a clear 360 view of each company they invest in. 4

9 About STANLIB STANLIB is a leading asset management company in South Africa and manages assets in excess of R540 billion* for over retail and institutional clients across the African continent. We have a physical presence in seven African countries and are able to leverage from a wider Standard Bank Group Africa footprint. STANLIB Focused Investing Our Belief There is no one size fits all investment solution for clients. Diverse clients need diverse investment outcomes. We therefore look at investments through many lenses and from many angles - this gives us an in-depth understanding of an ever-changing investment landscape. Our investment model thus houses multiple focused units with unique philosophies, which cater for diverse client needs. Our Franchise Model The STANLIB investment team consists of Franchises made up of specialist teams of investment professionals. They manage clients assets in their area of expertise, namely: fixed interest, property, equities, multi-asset allocation, multi-management and alternatives. These specialist investment teams deal with market changes with agility and speed, as they are supported by dedicated research, trade, implementation, risk management and compliance teams. Our Multi-Specialist Franchise Model truly reflects the complex investment world we operate in and echoes our desire to deliver tailored solutions for diverse clients. Result A broad investment offering designed to deliver our investment promise to clients. *As at December

10 Disclaimer Collective investment schemes in securities 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 collective investment scheme in securities is not the same as a deposit with a banking institution. Participatory interest prices are calculated on a net asset value basis, which is the total value of all assets in the Fund including any income accrual and less any permissible deductions from the Fund divided by the number of participatory interests in issue. Permissible deductions include brokerage, UST, auditor s fees, bank charges, trustee/custodian fees and the service charge levied by STANLIB Collective Investments (RF) Limited ( the Manager ). Where exit fees are applicable, participatory interests are redeemed at the net asset value where after the exit fee is deducted and the balance is paid to the investor. A Portfolio of a collective investment scheme in securities may borrow up to 10% of the market value of the Fund to bridge insufficient liquidity as a result of the redemption of participatory interests, and may also engage in scrip lending. Where different classes of participatory interests apply to certain Portfolios, they would be subject to different fees and charges. A schedule of fees and charges and maximum commissions is available on request from the Manager. Commission and incentives may be paid and if so, would be included in the overall costs. The exposure limit to a single security in this Portfolio can be greater than is permitted for other Portfolios in terms of the Collective Investment Schemes Control Act, 2002 ( the Act ). Details are available from the Manager. A Fund of Funds Portfolio only invests in other collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. A Feeder Fund Portfolio only invests in the participatory interests of a single Portfolio of a collective investment scheme apart from assets in liquid form. The Manager reserves the right to close certain Portfolios from time to time in order to manage them more efficiently. More details are available from the Manager. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. The Manager undertakes to repurchase participatory interests at the price calculated according to the requirements of the Collective Investment Schemes Control Act, 2002, and on the terms and conditions of the relevant Deeds. Payment will be made within 14 days of receipt of a valid repurchase form. Any capital gain realized on the disposal of a participatory interest in a collective investment scheme is subject to Capital Gains Tax (CGT). The Manager is obliged to report on the weighted average cost method for CGT purposes. All portfolios are valued on a daily basis at 15h30, except for some Fund of Funds Portfolios and Feeder Fund Portfolios, which are valued at 17h00. Investments and Repurchases will receive the price of the same day if received prior to 15h30. The Fund Charges document (including the Performance Fee Frequently Asked Questions) is available on ( Investment for Individuals section). Liberty is a member of the Association of Savings and Investment of South Africa. The Manager is a member of the Liberty group of companies. Contact details of Trustees: Absa Bank Ltd, 1st Floor, 15 Alice Lane, Sandton, Telephone STANLIB Collective Investments (RF) Limited (Reg. No. 1969/003468/06) Liberty is a member of the Association for Savings and Investment of South Africa. The Manager is a member of the Liberty group of companies. Compliance Number: D8R858 6

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12 17 Melrose Boulevard Melrose Arch 2196 PO Box 203 Melrose Arch 2076 T (SA only) T +27 (0) E contact@stanlib.com W stanlib.com GPS coordinates S , E W STANLIB Asset Management Limited Reg. No. 1969/002753/06 Authorised FSP in terms of the FAIS Act, 2002 (Licence No. 26/10/719) 2647_Q42012