Boutique market strategies

Transcription

1 Boutique market strategies Market Dynamics February 2012

2 Contents Absolute Return Investments Alternative Investments Dibanisa Fund Managers ELECTUS Futuregrowth Asset Management Macro Strategy Investments Marriott Old Mutual Equities Old Mutual Property Contact Details Regulatory Information

3 Absolute Return Investments Market Highlights Domestic equities traded in positive territory throughout February 2012 following the January 2012 rebound. The FTSE/JSE Shareholder Weighted Index returned 2.8% for the month. Solid macro data and further clarity around the Greek sovereign debt issues helped to keep the equity markets going. The South African Volatility Index (SAVI), a measure of implied volatility on the FTSE/JSE Top 40 Index, barely moved over the course of the month. Premium Equity Fund Premium Equity Fund since inception 1 November February 2012 Cumulative Outperformance (RHS) SWIX 0.95 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Source: OMIGSA Premium Equity 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% Premium Equity Fund is an actively-managed institutional equity fund that targets 2% to 3% outperformance of the FTSE/JSE Shareholder Weighted Index (SWIX) benchmark over the long term. Returns for the fund will also tend to be less volatile than the benchmark. 60% 50% 40% Premium Equity SWIX Historical returns The Premium Equity Fund was up 2.6% for the month, underperforming the benchmark by 0.2%. Since inception, the fund has outperformed the SWIX by 4.6% per annum. 30% 20% 10% Our Premium Equity Fund has outperformed the market, with less volatility, since inception. 0% Previous 3 3 months Months 6 Months YTD 1 Year Since Inception (Cumulative) (Nov 2009) Nov Source: OMIGSA. Institutional returns only Since Inception (Annualised) (Ann) Bryn Hatty Portfolio Manager 1

4 Alternative Investments Infrastructure Private Equity 2 The Department of Energy (DOE) has been running a programme to procure renewable energy generation: the Renewable Energy Independent Power Producer Programme (REIPPP). In terms of the programme, the DOE aims to procure MW of renewable capacity from IPPs before 2016, split between onshore wind (1 850 MW), solar PV (1 450 MW) and solar CSP (200 MW), with the balance going to other technologies. At the end of last year, 53 bids were submitted in the first round of which 28 were awarded preferred bidder status and represented potential capacity of MW. This left MW available for rounds two (submissions 5 March), three and beyond. The programme will be expanded in the future. The Infrastructure team partnered with other parties on 12 projects, of which 10 were awarded preferred bidder status and accounted for roughly half of the MW s awarded. The team is again participating in round two. The price of renewable energy generation is decreasing significantly, to a point where it makes sense beyond just the feel good factor. The assets, with strong CPI protection characteristics and stable projected cash flows, are good longterm savings assets. Development Impact Funds Schools and Education Investment Impact Fund of SA (Schools Fund): Following the first deal being approved in December 2011, the second deal was approved in quarter one, Documentation has been submitted for the incorporation of the School and Education Grant Fund (the Grant Fund ). The Grant Fund was created to compliment the Schools Fund by sourcing grant funding aimed at improving the of quality of education. This is done by involving organisations that provide whole-school and in-community development services. These services include: - the training and support of principals and school management teams, - the organisation and administration of school operations, - increasing the capacity of school governing bodies and education officials, - in-service training and support for teachers, and - facilitating access to programmes which address poverty-related inhibitors to learning, such as nutrition, health and safety programmes. Housing Impact Fund of SA (HIFSA): The Birch Acres development project, one of the projects within the Mettle transaction, was completed in December 2011 and delivered a 24% internal rate of return (IRR). We have made a significant commitment to investing in renewable energy and have secured several successful bids in the first round tender run by Government for renewable energy. Jurie Swart Infrastructure All three of the Old Mutual Private Equity (OMPE) funds of funds ended 2011 successfully, outperforming the FTSE/JSE All Share Index by between 3% and 29.6% for the year. During the last quarter of 2011, we successfully concluded the sale of Shanduka, an investment that delivered growth in excess of 40% a year since February Shanduka was an investment in OMPE Fund II, which is held by OMMMPEF2 and OMPESF. During February 2012, the disposal of Savcio was concluded, following sign-off of the deal by the competition tribunal. The Savcio sale was the last asset in OMPE Fund I, a fund that has delivered over four times money back to investors since its inception in All three of our fund of funds products have benefited from exposure to OMPE Fund I. The latest Riscura survey shows how the Old Mutual Private Equity funds have consistently outperformed their private equity peers and listed equity (see graph). 25% 20% 15% 10% 5% 0% * Private Equity returns are net of management and performance fees ** Listed indices used in these computations are total return indices before fees. Source: OMIGSA, SAVCA Riscura Performance Profile (to December 2011) Annualised Returns since inception (1) Time-weighted return annualised (2) Internal rate of return annualised (3) Return on investment annualised, and net of fees Inception Date IDEAS Fund 16.1% (1) January 1999 Old Mutual Private Equity Fund I 39.8% (2) March 2004 Old Mutual Private Equity Fund II 9.5% (2) October 2005 OM Multi-Manager Private Equity Fund 1 (OMMMPEF1) 30.3% (3) May 2006 OM Multi-Manager Private Equity Fund 2 (OMMMPEF2) -0.1% (3) October 2007 OM Private Equity Secondary Fund (OMPESF) 16.1% (3) October 2009 Source: OMIGSA Industry excl. OMPE OMPE * JSE ALSI SA Private Equity Survey Net Private Equity IRR - Sep Year 5 Year 10 Year

5 End Year Dibanisa Fund Managers 3 Dibanisa Pooled Fund Range Dibanisa Fund Managers has a range of index tracker funds which track various asset classes. These pooled portfolios can be used as a core solution to an investment strategy and enhanced by adding more expensive and aggressive satellite portfolios. The Dibanisa RAFI ALSI Capped Tracker has outperformed the FTSE/JSE SWIX and FTSE/JSE All Share Indices by 0.8% and 0.7% year- to-date respectively. Obtaining consistent outperformance from actively managed global funds after fees is a challenge. Alternatively-weighted global index trackers like the Dibanisa FTSE RAFI All World Tracker Fund is a cost-effective way to gain exposure to both developed and emerging equity markets. The Dibanisa S&P Africa ex-sa tracker fund is an efficient way to gain diversified exposure to 20 African countries, while the Dibanisa MSCI Emerging Markets tracker fund provides access to high growth countries showing exceptional value at the moment. Large Cap Exposure The majority of the South African equity market can be attributed to large caps, as large cap stocks, represented by the FTSE/JSE Top 40 constituents, make up about 84.3% of the market cap of the FTSE/JSE All Share Index. Mid caps and small caps only represent about 13.3% and 2.5% respectively. Alternatively-weighted passive strategies tracking the FTSE/JSE RAFI 40 and FTSE/JSE Equally Weighted Top 40 indices have historically outperformed the FTSE/JSE Top 40 Index at lower volatility over various periods. As seen in the performance triangle, a blended FTSE/JSE RAFI 40 and FTSE/JSE Equally Weighted Top 40 tracker solution has outperformed the FTSE/JSE Top 40 Index by 2.4% p.a. from the start of 2009 to the end of As at end February 2012, the blended strategy has outperformed the FTSE/JSE Top 40 Index by 3.9% over a 12-month period. Investors can access this large cap strategy via a segregated account or the Collective investment Schemes managed by Dibanisa. Cost-effective, alternatively weighted tracker solutions can add significant value to a fund s overall portfolio construction. Craig Chambers MD Dibanisa Pooled Fund Range Performance Triangle (Active Returns) (50%:50%) FTSE/JSE RAFI 40 and FTSE/JSE Equally Weighted Top 40 strategy vs. FTSE/JSE TOP 40 Index % Dibanisa RAFI ALSI Capped Tracker Fund Dibanisa ALBI Tracker Fund Dibanisa Inflation-linked Bond Tracker Fund Dibanisa SA Listed Property Tracker Fund Dibanisa Balanced Tracker Fund Dibanisa MSCI All Country World Tracker Fund Dibanisa FTSE RAFI All World Tracker Fund Dibanisa MSCI Emerging Markets Tracker Fund Dibanisa S&P Africa ex SA Tracker Fund Dibanisa manages assets in the following Collective Investment Schemes Old Mutual RAFI 40 Tracker Unit Trust Old Mutual Top 40 Tracker Unit Trust Dibanisa Balanced Unit Trust Dibanisa Absolute Return Unit Trust Nedbank Betta Beta Equally Weighted Top 40 ETF Nedbank Green Index ETF Source: I-Net Bridge Data prior to Oct 2007 are backdated. Start Year % 10.32% % 3.78% -3.68% % 1.46% -3.47% -3.26% % 0.17% -3.35% -3.19% -3.12% % 1.42% -0.61% 0.16% 1.33% 4.26% % 1.74% 0.14% 0.88% 1.94% 4.14% 3.54% % 1.79% 0.47% 1.12% 1.98% 3.53% 2.78% 2.10% % 1.77% 0.66% 1.21% 1.91% 3.04% 2.36% 1.85% 1.63%

6 ELECTUS MARKET HIGHLIGHTS INVESTMENT TEAM & UNIT TRUSTS MANAGED BY ELECTUS For the month of February 2012, the FTSE/JSE All Share Index (ALSI) gained 1.7%, while the FTSE/JSE Shareholder Weighted All Share Index (SWIX) gained 2.8%. The resource sector lost -2.2%, industrials gained 3.9% and financials gained 4.1%. The large cap sector gained 1.5%, mid-caps gained 3.0% and small caps gained 2.6%. BOUTIQUE UPDATE In order to enhance client outcomes, we have re-positioned ELECTUS as a focused and specialist equity boutique by expanding to create our own proprietary equity research team. Richard Hasson Old Mutual Top Companies and Growth Funds Neil Brown Old Mutual Top Companies Fund Feroz Basa Old Mutual High Yield Opportunity and Value Funds Six investment professionals from within OMIGSA have joined ELECTUS. This now nine-strong team ensures that we can provide our entire proprietary bottom-up equity analysis ourselves. These investment professionals have an identical investment philosophy to that of the existing ELECTUS philosophy, while adding the appropriate investment skills and experience across all sectors of the South African equity market. We have worked closely with these colleagues over many years. They fit well with the existing ELECTUS culture as we share similar passion, focus and a desire to be accountable for client returns. Another important change is that, for the first time, the investment analysts' remuneration and incentives will be completely aligned with client success and ELECTUS deliverables. Anwaar Wagner Old Mutual Global Emerging Market Fund Warren Jervis Old Mutual Small Companies Fund Siboniso Nxumalo We welcome the following six highly skilled investment professionals (and the unit trusts they manage) to the ELECTUS team: Feroz Basa (High Yield Opportunity and Value Funds), Warren Jervis (Small Companies Fund), Siboniso Nxumalo, Sharief Pansarey, Greg Cort and Gustav Schulenburg. All investment professionals are 100% aligned to ELECTUS' investment philosophy, process and culture. Sharief Pansarey Greg Cort Gustav Schulenburg Richard Hasson & Neil Brown Boutique Heads 4

7 Futuregrowth Asset Management Yield Curve (%) Market Highlights Following a strong start to 2012, the local interest-rate markets had to deal with renewed intra-month volatility during February with an average trading range of around 30 basis points. Highlights during the month included strong performance from the rand, sharply reduced budget-deficit estimates (for the current as well as the forthcoming fiscal years), fairly strong fourth quarter GDP data and a mixture of slightly higher CPI and lower PPI data releases. Foreign buying interest has kept pace with the global trend, lending some support to the market with net purchases for the year-to-date now totaling R11.5bn. Looking north, another liquidity injection by the European Central Bank in support of the European banking sector as well as some progress on Greece, kept market sentiment in positive territory. As a result, the All Bond Index returned +0.2%, with short-dated bonds performing the best. Inflation-linked bonds also experienced some intramonth volatility, but the inflation-linked index managed to end the month in positive territory, with a return of 0.6% and outperforming cash (+0.4%). Our investment view, based on an expectation of lower inflation by year-end and an unchanged repo rate, supports an increase in interestrate risk. We are particularly interested in the steeply positive slope of the yield curve, which appears to have priced in too much negative news. However, it is difficult to ignore the risks associated with the above strategy, in particular, the impact of a rising crude oil price, which is forcing us to slowly unwind the inflation-linked bond holding Longer-dated bonds have performing well during the first two months of Feb Dec Sources: I-Net, Futuregrowth R206 R201 R157 R203 R204 R207 R208 R186 R213 R209 R Y-t-d Returns (%) Investment Strategy 5 Our money market funds are neutral duration and overweight in longerdated assets. Our investment view has become less defensive as we increase our holding of longer-dated fixed rate bonds, while retaining some inflation-linked bonds as hedge against inflation surprises in the short term. Wikus Furstenberg Portfolio Manager In our bond mandates, we retain a small underweight duration position, while accumulating longer-dated bonds into weakness. Corporate debt spreads have tightened to the point where we are conducting a very selective purchase strategy. Inflation-linked bonds still offer fair value following the strong bull rally over the past few months.

8 Macro Strategy Investments Monthly market comments Boutique performance relative to performance target to end February 2012 After underperforming in 2011, emerging markets have been leading global equities higher in In US dollar terms, the MSCI Emerging Market Index gained 6% in February, and the MSCI All Country World Index gained 4.9%. On the domestic front, the FTSE/JSE All Share Index (ALSI) was up 1.7%, listed property gained 1%, the All Bond Index was up 0.2%, inflation-linked bonds gained 0.6%, and cash delivered 0.5% for the month. Commodity prices were generally firmer, led by the oil price which was up 12% for the month on the back of geopolitical concerns in the Middle East. The domestic budget was well received, with the deficit coming in below expectations and a commitment to further narrow the deficit in coming years. Profile Funds Life Wrapped Unit Trusts Profile Funds Life Wrapped Unit Trusts AGGRESSIVE 1 Year 3 Years 5 Years Profile Pinnacle 10.7% 20.3% 8.1% Performance Target: CPI + 7% 13.1% 12.2% 14.0% Optimised Aggressive 9.4% 19.3% 6.8% Performance Target: CPI + 8% 14.1% 13.2% 15.0% Old Mutual Flexible Fund 8.8% 20.9% 7.4% Performance Target: CPI + 8% 14.1% 13.2% 15.0% MODERATE 1 Year 3 Years 5 Years Profile Balanced 11.7% 19.2% 7.5% Performance Target: CPI + 5% 11.1% 10.2% 12.0% Optimised Balanced 9.7% 17.5% 6.2% Performance Target: CPI + 6% 12.1% 11.2% 13.0% Old Mutual Balanced Fund 10.9% 18.6% 6.6% Performance Target: CPI + 6% 12.1% 11.2% 13.0% Oil prices rally to early 2011 highs Profile Funds Life Wrapped Unit Trusts Profile Funds Unit Trusts CONSERVATIVE 1 Year 3 Years 5 Years Profile Stable Growth 11.5% 14.8% 8.2% Performance Target: CPI + 4% 10.1% 9.2% 11.0% Optimised Defensive 9.4% 12.2% 7.5% Performance Target: CPI + 4% 10.1% 9.2% 11.0% Old Mutual Stable Growth Fund 9.1% 12.1% Performance Target: CPI + 4% 10.1% 9.2% 11.0% VERY CONSERVATIVE 1 Year 3 Years 5 Years Profile Capital 10.8% 11.8% 8.9% Performance Target: CPI + 3% 9.1% 8.2% 10.0% Old Mutual Real Income Fund 9.8% 12.2% 9.1% Performance Target: CPI + 3% 9.1% 8.2% 10.0% Below performance target On or above performance target Source: I-Net Asset allocation is simply much easier than adding alpha to a fund, since there is more to sink your teeth into. Counter-intuitively, asset classes are more inefficiently priced than stocks. Jeremy Grantham, CIO and co-founder: GMO Note: A performance target is not necessarily the same as a benchmark. It is the average level of performance that the fund manager aims to achieve over the long term. Note: These fund returns are shown net of management fees (does not include initial charge for unit trusts), except for Profile funds, which are gross of fees. Source: OMIGSA 6 Peter Brooke Boutique Head

9 Marriott Market Highlights February 2012 Inflation: Consumer inflation in January measured 6.3% year-on-year (y/y), remaining above the South African Reserve Bank (SARB) s 6% upper target band. Inflation is set to continue rising as South Africa (SA) is yet to feel the full impact of a weaker rand. Almost one-third of SA s gross domestic expenditure (GDE) consists of imports, thus the rand s depreciation against the US dollar over the last 12 months will exert significant upward pressure on inflation in the months ahead as import costs rise. Recapping 2011 Rising Inflation and a Fatigued Consumer Apart from our interest rate expectations, 2011 unfolded largely as we had anticipated. Currency: The rand is currently trading at approximately R7.50/US$. The current strength in the currency from the R8.20/US$ level seems to have been associated with recent announcements that rates will be kept lower for longer in the US, making SA rates more attractive. We have seen approximately R3 billion in foreign inflows into our market for the week ending 24 February which has brought the total amount of foreign flows for the year into positive territory. The majority of flows are into our bond market with a R10.8 billion total for the year so far. Local Markets: The start of the year has been good for equity investors, with the FTSE/JSE All Share Index (ALSI) increasing in value by approximately 7.3%. We are of the view that the majority of sectors making up the ALSI are expensive, as reflected in low dividend yields without the prospect of above-average dividend growth. Sectors that are showing good value, however, are the telecommunication and insurance sectors. The forward yields of Vodacom, MTN, Altech and Liberty Holdings compare favourably to current cash interest rates. On an after-tax basis the yields of these securities are even more attractive. These companies also have the potential to grow their income in line with inflation over the next five years. This yield growth proposition suggests cheap income streams. Offshore Markets: The global economy is showing slower growth which would generally manifest itself in less growth in corporate dividends and, hence, less capital growth. Seeking out reliable dividend streams and high dividend yields will therefore be the better way of ensuring reasonable returns. With the dividend yields of some of the biggest companies in the world well above bond yields, equity valuations in these markets are presenting investors with a significant opportunity to generate inflationbeating returns over the next five years. Marriott aims to reduce the financial anxiety of the retired investor The combination of rising inflation and slowing household consumption, as well as on-going uncertainties surrounding the Eurozone sovereign debt crisis, resulted in volatile markets with prices ending the year at similar levels to where they started. The table below highlights the price return and total return of the four major South African asset classes for the year ending 31 December 2011: Source: Profile Data 7 Simon Pearse CEO

10 R100 invesetd on 31 December 1999 Old Mutual Equities One Team : One Philosophy : One Process : One Goal We follow a fundamental approach to analysis supported by quantitative awareness Old Mutual Equities has a very powerful team with significant combined experience in SA listed equities analysis and portfolio management; with one process and one philosophy driving the goal of highly competitive returns for all clients. Peter Linley I Investment Strategy Brian Pyle I Equity Research This one team approach allows us to align investment professionals to the returns we deliver to our clients and ensures that maximum time is spent focusing on investment decisions. We combine rigorous fundamental analysis and a sophisticated quantitative screening to provide insight to the valuation of the companies in which we invest. Our disciplined portfolio construction approach ensures we leverage our research and maximise returns for the least risk. Mike Schroder (22 yrs) Portfolio Manager & Mining Analyst Ian Woodley (17 yrs) Resources pfm & Mining Analyst Jonathan Larcombe (11 yrs) Portfolio Manager: General Equity Jon Duncan (15 yrs) ESG Analyst In addition, we believe that sustainability factors directly affect long-term business profitability and seek ways to innovatively integrate this information into our investment and ownership process. Funeka Beja (5 yrs) Industrial Analyst Cavan Osborne (13 yrs) Industrial pfm & Industrial Analyst Tracy Brodziak (11 yrs) Financials pfm & Financial & Oils Analyst Yasmine Ganief (10 yrs) Industrial Analyst Old Mutual Investors Fund performance to 29 February 2012 R 600 R 550 R 500 R 450 R 400 R 350 R 300 R 250 R 200 Cumulative Excess Return (RHS) Old Mutual Investors' Fund Domestic General Equity Sector Average Cumulative Excess Returns Jeanine Van Zyl (13 yrs) Industrial Analyst Ganesh Shenoy (6 yrs) Industrial Analyst James Slabbert (25 yrs) Financial Analyst (consultant) Leanne Micklewood (16 yrs) Quant Analyst R R R Dec-99 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Sources: Morningstar & OMIGSA Dumisani Chiume Analyst * Meryl Pick Analyst * Burchert Johannes Analyst * * Under supervision 8

11 Old Mutual Property All Property rental reversion (%) Market Highlights Performance Profile The distribution growth for the full year to December 2011 was 1.4% higher than that of December 2010, while the second half of 2011 was 2.1% higher than the comparable period in The fund outperformed the Listed Property sector in 2011, producing a total annual return of 19.3% versus the index s 8.9%. The fund s discount to NAV decreased from 8.0% in December 2010 to a surplus of 3.4% at December The standing portfolio s rental growth increased by 6.1%, due to a combination of reduction in vacancies, improved tenant retentions as well as positive rental reversions in The standing portfolio s value increased by 0.7% (since December 2010). The fund also disposed of seven properties in 2010 for a sum of R195.4m. The annual 2011 IPD index results are scheduled for release at the end of March The previous release (year ending December 2010) showed direct property produce a total annual return of 13.3%. The underlying fundamentals of commercial property remain relatively healthy, as highlighted by the latest set of results put out by the listed property sector. For the most part, these were characterised by lower vacancy rates and positive rental reversions on lease renewals (see graphic). In saying that, we do not foresee 2011 total returns surpassing those of 2010, mainly as a result of a shift in valuation fundamentals. However, in the medium term we expect a gradual increase in capital growth as excess supply is absorbed. The latest SAPOA Capitalisation & Discount rate survey suggests a 20 to 30 basis point increase in cap rates for the year ending December In terms of sector allocation, we believe retail-property capital growth will outperform over the medium term, while industrial property is likely to provide a superior total return on the back of a higher income return. SA Corporate Real Estate Fund (Listed Real Estate) The fund maintained its strategy of continued reinvestment in the portfolio, through incurring capital expenditure of R175m in However, it remains well funded for quality acquisition opportunities. With increasing pressure on vacancy rates, our preference is for dominant retail centres. 9 Peter Levett Boutique Head Lower vacancies & positive rental reversions support growth outlook 12% 10% 8% 6% 4% 2% 0% -2% Lower vacancies; positive reversions -4% Bubbles indicate listed property funds; sized according to market cap -6% 0% 2% 4% 6% 8% 10% 12% 14% Sources: Company data,; Old Mutual Property Research Triangle Funds (Direct Real Estate) All Property vacancy rate (%) The fund management team remains focused on actively managing arrears and vacancies levels. Management s focus on portfolio arrears has seen a significant improvement in decreasing the level of arrears. Inactive tenants with a low chance of debt recovery are being given special attention. Office vacancies in the Durban CBD continue to be a concern. Vacancies remain high due to economic decline in the node as well as the migration of tenants out of the CBD and closer to the airport. The fund continues to focus on cost-control measures and industry benchmarking across all properties, in order for us to deliver the desired returns.

12 For more information, please contact: Western Cape: Old Mutual Investment Group South Africa (OMIGSA), West Campus: Entrance 2, 3 rd Floor, Jan Smuts Drive, Pinelands 7405 Mike van Heerden Senior Executive: Distribution Tel: Cell: mvheerden@omigsa.com Paul Glendining Investment Sales and Marketing Executive: Retail Tel: Cell: pglendining@omigsa.com Nirdev Desai Investment Sales and Marketing Executive: Retail Tel: Cell: ndesai@omigsa.com Sue Brooks Business Development Consultant Tel: Cell: sbrooks@omigsa.com Gauteng: Old Mutual Square, Umnotho Building, 3 rd Floor, OMIGSA office, 93 Grayston Drive, Sandton 2196 Taz Victor Investment Executive: Retail Institutional Tel: Cell: tvictor@omigsa.com Wynand Gouws Head: Retail Sales Tel: Cell: wgouws@omigsa.com Eudrè Craven Investment Executive: Retail Institutional Tel: Cell: ecraven@omigsa.com Mokgadi Skwambane Investment Sales and Marketing Executive: Retail Tel: Cell: mskwambane@omigsa.com Sean du Buisson Investment Sales and Marketing Executive: Retail Tel: Cell: sdubuisson@omigsa.com Naleni Govender Investment Sales and Marketing Executive: Retail Tel: Cell: ngovender@omigsa.com Durban: Westway, Office 3B, 11 The Boulevard, Westway Park 3611 Imtiaz Shaik Investment Sales and Marketing Executive: Retail Tel: Cell: ishaik@oldmutual.com Bloemfontein: The Courtyard, 196 Nelson Mandela Drive, Bloemfontein 9300 Brian Vermeulen Investment Sales and Marketing Executive: Retail Tel: Cell: bvermeulen@omigsa.com Nondumiso Zulu Investment Sales and Marketing Executive: Retail Tel: Cell: nzulu@oldmutual.com Pretoria: 1 st Floor, Glen Manor Office Park, Frikkie de Beer Street, Menlyn 0042 Hennie van Rensburg Investment Sales and Marketing Executive: Retail Tel: Cell: hjansevanrensburg@omigsa.com Eastern Cape: 3rd Floor, Mutual Plaza, Cnr Cape Rd & Langenhoven Dr, Greenacres, PE 6000 Brendan Capstick Investment Sales and Marketing Executive: Retail Tel: Cell: bcapstick@omigsa.com 10

13 Regulatory Information Old Mutual Investment Group Old Mutual Investment Group (South Africa) (Pty) Limited Physical address: Mutualpark, Jan Smuts Drive, Pinelands 7405 Telephone number: Old Mutual Investment Group (South Africa) (Pty) Limited is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services Providers ( to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of Old Mutual Investment Group (South Africa) (Pty) Limited is a wholly owned subsidiary of Old Mutual (South Africa) Limited. Reg No 1993/003023/07. Old Mutual Global Index Trackers (Pty) Ltd is a licensed financial services provider, FSP 721, approved by the Registrar of Financial Services Providers ( to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of Futuregrowth Asset Management (Pty) Limited (Futuregrowth) is licensed as a discretionary financial services provider in terms of Section 8 of the Financial Advisory and Intermediary Services Act, 37 of 2002, as amended (FAIS). Old Mutual Investment Group Property Investments (Pty) Ltd, is a licensed financial services provider, FSP 817, approved by the Registrar of Financial Services Providers ( to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of Marriott Unit Trust Management Company is a member of the Association for Savings & Investments SA. Marriott Asset Management (Pty) Ltd is a licensed financial services provider FSP592. The trademarks Research Affiliates, Fundamental Index and RAFI are the exclusive intellectual property of and are being used under licence with Research Affiliates, LLC. Any use of these trade names and logos without the prior written permission of Research Affiliates, LLC is expressly prohibited. Fundamental Index, the non-capitalisation method of creating and weighting of an index of securities, is the patent-pending property of Research Affiliates, LLC (Patent Pending. Publ. Nos. US A1, US A1, US A1, US A1, WO 2005/076812, WO 2007/ A2 and EPN ). The investment products are market-linked. Products are either policy based or unitised in collective investment schemes. Investors rights and obligations are set out in the relevant contracts. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. Personal trading by staff is restricted to ensure that there is no conflict of interest. All directors and those staff who are likely to have access to price sensitive and unpublished information in relation to the Old Mutual Group are further restricted in their dealings in Old Mutual shares. All employees of Old Mutual Investment Group (South Africa) (Pty) Limited are remunerated with salaries and standard short-term and long-term incentives. No commission or incentives are paid by Old Mutual Investment Group (South Africa) (Pty) Limited to any persons. All inter-group transactions are done on an arm s length basis. In respect of pooled, life wrapped products, the underlying assets are owned by Old Mutual Life Assurance Company (South Africa) Limited, who may elect to exercise any votes on these underlying assets independently of Old Mutual Investment Group (South Africa) (Pty) Limited. In respect of these products, no fees or charges will be deducted if the policy is terminated within the first 30 days. Returns on these products depend on the performance of the underlying assets. Old Mutual Investment Group (South Africa) (Pty) Limited has comprehensive crime and professional indemnity insurance, as part of the Old Mutual Group cover. For more detail, as well as for information on how to contact us and on how to access information, please visit Unit trusts are generally medium to long term investments. Past performance is no indication of future growth. Shorter term fluctuations can occur as your investment moves in line with the markets. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. Unit trusts can engage in borrowing and scrip lending. The fund s TER reflects the percentage of the average Net Asset Value of the portfolio that was incurred as charges, levies and fees related to the management of the portfolio. A higher TER 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. A schedule of fees, charges and maximum commissions is available from the company. You may sell your investment at the ruling price of the day (calculated at 15h00 on a forward pricing basis (and 17h00 at month-end for Old Mutual Umbono RAFI 40 Tracker Fund and Old Mutual Umbono Top 40 Fund). Certain funds may be capped to be managed in accordance with their mandates. Different classes of units apply to these portfolios and are subject to different fees and charges. Old Mutual Unit Trusts is a member of the Association of Savings and Investments, SA. The portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income. Past performance is not necessarily an indication of future performance. A schedule of fees and charges and maximum commissions is available from the management company/intermediary. Source for unit trust fund returns: Morningstar (unless otherwise stated) for periods ended 29 February