10X INVESTMENT GUIDE WHY SETTLE FOR LESS? INVESTMENTS

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1 10X INVESTMENT GUIDE WHY SETTLE FOR LESS? INVESTMENTS

2 THIS IS NOT A REHEARSAL. It is said that behaviour is truth. And the truth about 10X is rooted in its one, simple, optimal retirement solution. A simple product means simplified administration and reduced costs. Simplicity allows for clarity and transparency in our regular reports. Transparency and openness mean our members are never kept from how their investments are performing. The beauty about such a revolutionary approach to investing for retirement means that we have nothing to hide. In fact, we d be more than happy to share our formula with you: With 10X, your investment is based on your time horizon, and our portfolios track the index, rather than the whims of a fund manager. The cost savings that result allow us to charge less than half the industry standard in fees. What may have gone towards costs at any other institution is invested on your behalf (not ours), which then compounds over your investment period. No wonder, then, that over forty years our members can look forward to returns of as much as 60%* more than they might with most other retirement investments. How many times are you planning to retire anyway? *2% more in returns will increase your final pension by approximately 60% over a 40-year working life. High fees and underperforming fund managers can erode 2% of your long-term investment return.

3 WILL YOUR RETIREMENT INVESTMENT MATCH UP TO THE PROMISES MADE?

4 WHAT YOU SEE IS WHAT YOU GET. We never forget whose money we are working with. So it s as much in our interests as it is in yours to maintain transparency and clarity throughout the lifetime of your investment. Our highly qualified administration team is efficient and focused. Our reporting is simple and comprehensive. As a member, you ll receive annual benefit statements, quarterly reviews and investor newsletters each presented in plain language, with simple, clear graphics. And of course you re free to contact us with questions or concerns whenever they arise. Simply visit our website at 10x.co.za, download the 10X App for Android and IOS, or SMS 10X to and we ll be in touch. MORE MONEY AT RETIREMENT. That s our primary mission to ensure that you have as much money as possible when you retire. Our proven investment approach follows international best practice, and is centred around a single, optimal investment solution that does away with complex choices, and is geared to ensure consistent growth of your investment over time. The features of this solution are: 1. Diversification 2. Time-driven Investing 3. Low Fees 4. Index Funds 5. Full Transparency The 10X Investment Guide will explain how these components bear on your retirement investment.

5 DIVERSIFY. AND SPREAD THE RISK. Placing all your investment eggs in one basket isn t called investing it s called gambling. But with 10X, your money is invested across a spread of over a thousand different investments. Which not only protects your savings but also provides enhanced long-term returns. With 10X, your savings are invested in: Shares in well-established companies Property Interest-earning investments known as bonds Cash When we structure your portfolio across these four categories, we consider two key aspects: Weightings: how much of your savings are allocated to each of the four categories above, given your age and retirement date Investment Style: the method used to purchase the investments in the four categories. Investment Class Index Tracked Index Description SA Equity Deutsche Bank 10X South Africa Equity Index Top 60 shares on the JSE, with a 6% cap per single share SA Property South African Listed Property Index Top 14 property shares on the JSE, with a 22% cap per single share SA Bonds South African Government Bonds Index Top 10 SA Government Bonds with a fixed coupon THE PERFECT FORMULA FOR A COMFORTABLE RETIREMENT: Save 15% of your salary for 40 years in a high equity tracker fund paying total fees of 1% or less. SA Cash International Equity International Cash South Africa Government Inflation-Linked Bond Index AF Short-Term Fixed Interest Index Global All Cap Index Emerging Markets Index US Dollar exchange rate Top 9 Inflation-linked SA Government Bonds Interest rate on 3 month SA cash deposits Top 7,000+ global stocks Top 900+ emerging market stocks US Dollar exchange rate

6 TIME. MAKING THE MOST OF IT. Whether you re expecting to access your retirement savings relatively soon, or whether your retirement is some way off, 10X will structure your portfolio in a way that makes the most of the time available to you. It s important to understand that the four main investment categories each have their own advantages and disadvantages. Shares and Property (which are considered growth investments) offer high expected long-term returns, but are also liable to fluctuations over time, especially in the shorter term. Bonds and Cash (which are considered defensive investments) provide lower long-term returns, but are far more resilient to market fluctuations and generally offer more stable results. The weighting of your portfolio, then, must be considered in terms of your time horizon in other words, your expected retirement date. The closer this date, the less you can afford the risk of a portfolio weighted towards growth investments. And if the date is sufficiently far off, your investment will have time to recover from fluctuations, and still provide you with higher returns. At 10X, this is the default investment approach and is called the 10X Default Guide Path. This allows us to shift your money from a growth-oriented portfolio (10X High Equity Portfolio) to a more defensive portfolio (10X Defensive Portfolio) as your retirement draws near. You ll notice that all the returns in the chart below are after stripping out inflation. This is critical because at current rates of inflation (approximately 6%), in twelve years time your money would be worth half of what it s worth today. That is why our portfolios target an after-inflation return. The returns below are the expected long-term returns on the 10X portfolios. However, in the short term, the portfolios are likely to deviate from this significantly. INVESTMENT TIME HORIZON % EQUITY % PROPERTY % BONDS & CASH 72% 5% 23% HIGH 60% 8% 32% 10X Life-Stage Portfolios SHORT-TERM RETURN FLUCTUATIONS 50% 10% 40% 40% 8% 52% > 5 YEARS ± 5 YEARS ± 4 YEARS ± 3 YEARS 25% 6% 69% ± 2 YEARS LOW 7% 5% 88% ± 1 YEAR However, if your savings are going to remain invested at retirement (i.e. you plan to purchase a living annuity), then you have a longer time horizon than your retirement date. In this case you may prefer to remain invested in a portfolio with predominantly growth investments, such as the 10X High Equity Portfolio. EXPECTED LONG-TERM RETURN (AFTER INFLATION) 6% HIGH EQUITY 5% 4% 3% 2% 1% 60% EQUITY MEDIUM EQUITY 40% EQUITY LOW EQUITY DEFENSIVE At 10X, you may choose to opt out of the Default Glide Path and to invest in the 10X High Equity, 10X Medium Equity or 10X Low Equity Portfolios. The accompanying graph shows the investment weightings of the six 10X Life-Stage Portfolios the longer the time frame, the greater the weighting towards growth investments.

7 TIME. IT S ON YOUR SIDE. Markets crash, unfortunately (and even though this generally only happens once every twenty-five years, we d never attempt to predict the next one). As the graph below shows, such an event may mean that your investment value decreases over the short-term. But take a look at how the three 10X Portfolios performed during and after the global financial crisis of 2008/9. The Low Equity Portfolio incurred the smallest losses over the crisis period, but by December 2013 had the lowest returns of the three. The Medium Equity Portfolio weathered the crash reasonably well. And while the High Equity (long term) Portfolio took the biggest hit over the crisis, by December 2013 it had gone on to return more than double the initial deposit of R100 shown on the graph. That is why it s vital that you re invested in a portfolio that best meets your life-stage needs and your time horizon. R204 R192 R178 R100 R101 R93 R Source: 10X (December March 2014) THE POWER OF THE EXPONENTIAL.

8 FORTUNES. NOT FORTUNE TELLERS. Did you know that only one in five actively-managed funds ever beats the market? That s because it s impossible to predict exactly what s going to transpire, and claiming to do so is nothing more than offering a best guess. Which is precisely what many fund managers do and then shuffle your funds around accordingly. Call us conservative, but we d rather not take this kind of risk with your retirement money. Instead, we invest your money in proportion to the investments that make up the market. Simply put, if the overall market were to grow by 10% in any given year, so, logically, would your investment. This is called an index fund, and offers you the best chance of steady and reliable investment growth over time. After all, if only one in five actively-managed funds beat the market, it means that four of them are doing worse than the market average. Not exactly the most appealing odds, you d agree.

9 EVERY 1% COUNTS. Actively-managed funds are expensive to run far more so than index funds. That s why some retirement fund providers will charge as much as 3% of your investment balance in total fees. It s substantially more than twice as much as 10X charges. Here s the maths. For every 1% you save on fees, your investment can return as much as 30% more over a working life of 40 years. By saving 2%, your investment could return as much as 60% more than many funds over the same time. By charging less than half the industry fee average, 10X is able to ensure that more of your money is working to make you more money, every day. As Morningstar Research discovered, Costs are the most important indicator of future returns. Low cost funds beat high cost funds in every period measured. And as we constantly ask, why settle for less? High fees can ruin your retirement investment If you save R1,000 pm for 40 years earning a 5% pa return after inflation you ll build a retirement investment of R1.5 million in today s money. The chart below shows the impact of an extra 1% in fees on your investment. Simply put, each 1% fee saving increases your final investment value by approximately 30%. SAVINGS POTENTIAL RETURN LOST TO EXCESS FEES R1,500,000 R1,150,000 R900,000 R700,000 R600,000 ONLY 1 IN 5 FUNDS WILL BEAT THE INDEX. WHICH ONE DO YOU THINK IT IS? 0% 1% 2% 3% 4% EXTRA FEES AS A % OF INVESTMENT BALANCE PA Source: 10X Investments (May 2014)

10 SUPERIOR INVESTMENT PERFORMANCE. R100 invested in the 10X High Equity Fund in Jan 2008 (10X s inception) would have grown to R225 by 31 July 2014, before fees. This compares to R213 with the average fund manager before fees. Assuming a 1% fee save (10X saves most of its clients 1% in total fees for administration, advice and investment management) with 10X, the return from the average manager reduces to R199. Over the period, 10X has consistently outperformed the average fund manager by 1% pa before fees and by 2% pa including a 1% fee saving. Mngr ave. less 1% Fee Manager Ave. 10X High Equity 10X RETURNS VS. LARGE FUND MANAGER TIME. IT S ON YOUR SIDE. Markets crash, unfortunately (and even though this generally only happens once every twenty-five years, we d never attempt to predict the next one). As the graph below shows, such an event may mean that your investment value decreases over the short-term. But take a look at how the three 10X Portfolios performed during and after the global financial crisis of 2008/9. The Low Equity Portfolio incurred the smallest losses over the crisis period, but by December 2013 had the lowest returns of the three. The Medium Equity Portfolio weathered the crash reasonably well. And while the High Equity (long term) Portfolio took the biggest hit over the crisis, by December 2013 it had gone on to return more than double the initial deposit of R100 shown on the graph. R100 INVESTED DATE That is why it s vital that you re invested in a portfolio that best meets your life-stage needs and your time horizon. High Equity Portfolio Medium Equity Portfolio Low Equity Portfolio SOURCE: 10X, ALEXANDER FORBES LARGE MANAGER WATCH SURVEY JULY 2014 R204 INVESTMENT RETURNS PA (BEFORE FEES) R192 R July X High Equity Manager Ave. Mngr ave. less 1% fees 10X excess 1 Year 3 Year 5 Year 22,2% 20,4% 18,0% 20,7% 19,5% 2,7% 19,3% 18,1% 2,3% 16,8% 15,6% 2,4% R100 R101 Since inception Jan ,1% 12,1% 11,0% 2,1% R93 R Source: 10X (December March 2014)

11 HERE WE ARE. The one time that we believe choice is a good thing is when it comes to your getting in touch with us, and when it comes to keeping tabs on your investment. You can visit our website at 10x.co.za, where you can log in securely and track the progress of your investment at any time, day or night. Through our website, you can access our blog, where we share pertinent news and considered opinion on matters of retirement. You can download our mobile app, available for Android and ios, and easily access your investment information on the fly. Or of course, if you prefer to deal with one of our staff members, simply phone us, or send us an or fax. Add transparency to simplicity, and you get the peace of mind that comes with ease of access. Why not try our Retirement Calculator and interactive educational material on our website? They ll give you a great idea of what you should be considering for a secure retirement. Visit our website at 10x.co.za, where you can log in securely and track the progress of your investment at any time. Download our 10X Investments mobile app and easily access your investment information. CHOICE. HOW COMPLICATED DOES IT NEED TO BE? send to: Or simply call us on , us at info@10x.co.za, or send a fax to X clients can SMS the word Balance to at any time to receive their current investment value.

12 OUR CLIENTS The name 10X comes from Andy Grove, former CEO of Intel. He describes a force that changes the fundamental rules of an industry as a 10X force, something that makes it ten times harder for others in the industry to compete an appropriate name given our challenge to the fundamentals of the retirement industry. We pronounce it ten-ex. 10X shareholders include Old Mutual Private Equity and management. We serve companies in all industries from finance, retail, education, telecommunications, property, media and advertising, to the engineering and technology sectors. We manage several billion rands in private and corporate retirement investments. Our clients include Virgin Active, EOH, Deutsche Bank and Macquarie Bank. Cape Town Suite 105, Foyer A, Sovereign Quay 34 Somerset Road, Green Point Cape Town 8005 T: Johannesburg Upper Grayston Office Park, Block D Cnr of Linden and Ann Crescent, Sandton Johannesburg 2146 T: E: info@10x.co.za F: W: 10X Investments is a licensed Financial Services Provider #28250 and S13B Pension Funds Administrator #24/444. The 10X Living Annuity is underwritten by Guardrisk Life Limited (a registered Long Term Insurer and licensed Financial Services Provider #76). This brochure applies to regulations as at August 2014.