NEDGROUP INVESTMENTS. Abridged Annual Report 31 December 2010

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1 NEDGROUP INVESTMENTS Abridged Annual Report 31

2 Nedgroup Investments Abridged Annual Report

3 Contents Report to Investors 3-7 Trustees Report 9 Unit Trust Performance Table Equity Range Nedgroup Investments Rainmaker Fund 12 Nedgroup Investments Equity Fund 13 Nedgroup Investments Quants Core Equity Fund 14 Nedgroup Investments Growth Fund 15 Nedgroup Investments Value Fund 16 Specialist Equity Range Nedgroup Investments Entrepreneur Fund 17 Nedgroup Investments Mining & Resource Fund 18 Nedgroup Investments Financials Fund 19 Asset Allocation Range Nedgroup Investments Balanced Fund 20 Nedgroup Investments Managed Fund 21 Nedgroup Investments Bravata Worldwide Flexible Fund 22 Nedgroup Investments Core Diversified Fund 23 Asset Allocation Range (continued) Nedgroup Investments Core Guarded Fund 24 Nedgroup Investments Positive Return Fund 25 Nedgroup Investments Stable Fund 26 Income Range Nedgroup Investments Bond Fund 27 Nedgroup Investments Optimal Income Fund 28 Nedgroup Investments Money Market Fund 29 Nedgroup Investments Cash Plus Fund 30 Nedgroup Investments Flexible Income Fund 31 Nedgroup Investments Property Fund 32 International Rand-Denominated Range Nedgroup Investments Global Equity Feeder Fund 33 Nedgroup Investments Global Balanced Feeder Fund 34 Nedgroup Investments Global Cautious Feeder Fund 35 Corporate Social Responsibility Nedgroup Investments Fundisa Fund 36 Nedgroup Investments Abridged Annual Report 01

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5 Report to Investors I am pleased to report that Nedgroup Investments has delivered another set of solid investment results for investors in. We remain fully committed to fulfilling our mission of equipping you to achieve your investment goals. Market overview Equity markets ended the year on a very pleasing note with the FTSE/JSE ALSI rewarding investors with a return of 19% for. Although the index price series is still below its previous high in May 2008, investors who endured the 2008 market crash have returned to positive territory on a total return basis. South African asset classes fared well overall with the bond and property sectors delivering healthy returns of 15% and 30% respectively for the year. With inflation at its most subdued levels in recent years (3.6%), all domestic asset classes including cash (6.3%) provided investors with significant real returns for. Attractive local interest rates saw an influx of foreign portfolio flows (with interest rates in developed markets at historic lows) into South Africa, resulting in the rand appreciating further against the major currencies over the year. While this has benefited foreign investors in local markets, it has diminished returns for local investors offshore. The developed world continues to struggle with a recessionary environment and in particular, the extraordinarily high debt of many governments. The outlook remains uncertain as the world and global markets consider the consequences of unprecedented quantitative easing (a monetary policy that a central bank may employ to increase the supply of money in the economy in order to stimulate growth), exceptionally low interest rates and bailing out countries that are unable to service their debt. We acknowledge that investing in such an environment can be daunting and understand the significant responsibility we have in partnering with you. Best of breed investment strategy Nedgroup Investments once again delivered a very strong performance over the course of, anchored by our Best of breed investment strategy, which allows us to identify the most appropriate investment managers to meet our investors needs. This strategy sees us partner with select investment managers - individuals and teams - who we believe will deliver exceptional, consistent investment performance over the long term, while acting as responsible stewards of investors capital. Nedgroup Investments Abridged Annual Report 03

6 Performance review We are delighted with the performance of our fund range, with the majority of our funds outperforming their benchmarks over the relevant measurement periods. We were recently awarded second place in the category Domestic Management Company of the Year at the 2011 Raging Bull Awards ceremony in addition to four individual fund awards. The awards recognise asset management companies with the most impressive and consistent overall performance across their range of funds, taking into account performance and risk management. Some individual performance highlights during include: Equity Range The Nedgroup Investments Rainmaker Fund (+18.9% in ; +24.4% per annum over 10 years) our largest fund and the second largest equity fund in the industry had another solid year, finishing just outside the top quartile. The fund ranked 13th out of 55 over five years, 3rd out of 42 over seven years, and 1st in its category over 10 years. The Nedgroup Investments Value Fund (+24.4% in ; +25.8% per annum over 10 years) was ranked 1st in the Value category over one, three and five years and relative to all General Equity, Growth and Value Funds, placed 1st out of 88 funds over three years and 2nd over five and 10 years. 04 Nedgroup Investments Abridged Annual Report

7 Report to Investors The Nedgroup Investments Growth Fund (+22.2% in ; +18.2% per annum over 10 years) was ranked 1st in its category over the year as well as over five, seven and 10 years. Out of the 55 General Equity, Growth and Value Funds, we have three funds in the top 10 over a seven year period the Nedgroup Investments Growth Fund (6th), the Nedgroup Investments Value Fund (7th) and the Nedgroup Investments Rainmaker Fund (8th). Over 10 years, the Nedgroup Investments Rainmaker Fund ranked 2nd and Value 3rd out 43 General Equity, Value and Growth Funds. Asset Allocation Range The Nedgroup Investments Managed Fund (+11.9% in ; +16.1% per annum over seven years) delivered another pleasing performance for the year. Relative to all Prudential Medium & Variable Equity Funds, the fund ranked 3rd out of 77 funds over three years and 11th out of 53 funds over five years. The Nedgroup Investments Stable Fund (+11.1% in ) had an excellent year, repeating the success of 2008 and (its first two calendar years). The fund was placed 12th out of 53 over one year and 2nd out of 44 over three years. The Nedgroup Investments Positive Return Fund (+7.8% in ; +9.7% per annum over three years) enjoyed a good year relative to its inflation plus 4% benchmark. With the recent run in equity markets and moderation in inflation, the fund has recovered a fair amount of lost ground relative to its performance benchmark. Income Range The Nedgroup Investments Bond Fund (+14.6% in ; +11.2% per annum over three years) ranked 2nd in its category over two years and 1st over three and five years. The Nedgroup Investments Flexible Income Fund (+4.9% in ; +8.9% per annum over three years) had a slightly disappointing year as the offshore exposure was negatively impacted by the strong rand. Its longer-term performance remains good, with the fund keeping pace with a challenging benchmark of 110% of cash over a five-year period. The Nedgroup Investments Optimal Income Fund enjoyed an outstanding year with a return of 9.2% - well ahead of its after-tax cash benchmark. Our investors We would like to thank our investors for entrusting their money to Nedgroup Investments. We remain committed to providing our investors with relevant information in a straight-forward and responsible way to assist them in making well-informed decisions. We should also not overlook the vital role that financial planners have played in guiding their clients during this volatile period. Nedgroup Investments Abridged Annual Report 05

8 We enjoyed very strong flows with record gross and net inflows. The assets we manage on behalf of investors has grown an incredible ten-fold since the introduction of our Best of breed strategy in 2003, from R5 billion to R50 billion. Our people I would like to thank my colleagues at Nedgroup Investments for their commitment and hard work during the year in providing our investors with the excellent service they have come to expect from us. New developments We launched our first TV commercial in. The key message is about preventing emotions from negatively affecting your investment decisions. We hope to convey that humans all experience powerful emotions (such as fear, greed, over-confidence, frustration and impatience). These emotions often cause us to make irrational investment decisions that are not in our best long-term interests. We will continue reinforcing this important theme and message during Nedgroup Investments Abridged Annual Report

9 Report to Investors We also made two enhancements to our range during the year. In July, we launched the Nedgroup Investments Property Fund and appointed Ian Anderson of Grindrod Asset Management as the investment manager. We have taken a decision to limit the size of the fund, which we believe will allow the manager greater flexibility and improve the probability of outperformance. South African equity investors have enjoyed a decade of excellent returns, particularly in comparison to their experience with offshore investments. We believe that long-term investors should look carefully at increasing their offshore exposure. With this in mind, we have spent considerable time refining our best of breed international offering. During the final quarter of, we appointed Veritas Asset Management to manage the Nedgroup Investments Global Equity Fund (and therefore also the Global Equity Feeder Fund). During we launched our Dream Big Campaign, encouraging South Africans to invest for a child s education through the Nedgroup Investments Fundisa Fund. (up to a maximum of R600 per year). We have made it our mission to raise awareness of this initiative so that it can reach its full potential and are pleased to report considerable take-up during. In closing, despite the challenging economic conditions, we believe that we continue to deliver on our promise of providing excellent client service and strong investment performance. We look forward to helping our investors achieve their financial goals over the course of 2011 and beyond. Nic Andrew Head: Nedgroup Investments This is a powerful initiative between industry and government that offers competitive interest rates and a 25% bonus for all contributions made Nedgroup Investments Abridged Annual Report 07

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11 Report of the Trustee for the Nedgroup Collective Investments Scheme We, the Standard Bank of South Africa limited, in our capacity as Trustee of the Nedgroup Collective Investments ( the Scheme ) have prepared a report in terms of Section 70(1)(f) of the Collective Investment Schemes Control Act, 45 of 2002, as amended ( the Act ), for the financial year ended 31. In support of our report we have adopted certain processes and procedures that allow us to form a reasonable conclusion on whether the Manager has administered the Scheme in accordance with the Act and the Scheme Deed. As Trustees of the Scheme we are also obliged to in terms of Section 70(3) of the Act to satisfy ourselves that every income statement, balance sheet or other return prepared by the Manager of the Scheme as required by Section 90 of the Act fairly represents the assets and liabilities, as well as the income and distribution of income, of every portfolio of the Scheme. The Manager is responsible for maintaining the accounting records and preparing the annual financial statements of the Scheme in conformity with generally accepted accounting practice. This responsibility also includes appointing an external auditor to the Scheme to ensure that the financial statements are properly drawn up so as to fairly represent the financial position of every portfolio of its collective investment scheme in accordance with generally accepted accounting practice and in the manner required by the Act. Our enquiry into the administration of the Scheme by the Manager does not cover a review of the annual financial statements and hence we do not provide an opinion thereon. Trustees Report Based on our records, internal processes and procedures we report that nothing has come to our attention that causes us to believe that the accompanying financial statements do not fairly represent the assets and liabilities, as well as the income and distribution of income, of every portfolio of the Scheme administered by the Manager. We confirm that according to the records available to us, no losses were suffered in the portfolios and no investor was prejudiced as a result thereof. We conclude our report by stating that we reasonably believe that the Manager has administered the Scheme in accordance with: the limitations imposed on the investment and borrowing powers of the manager by this Act; and the provisions of this Act and the deed. Melinda Mostert Head: Trustee Services Standard Bank of South Africa Limited 25 March 2011 Seggie Moodley Head: Risk and Legal (Trustee Services) Standard Bank of South Africa Limited Nedgroup Investments Abridged Annual Report 09

12 Fund Size Rm Fund Return % Benchmark Return % Benchmark Equity Range Nedgroup Investments Rainmaker Fund Sector average Nedgroup Investments Equity Fund Sector average Nedgroup Investments Quants Core Fund Sector average Nedgroup Investments Growth Fund Sector average Nedgroup Investments Value Fund Sector average Specialist Equity Range Nedgroup Investments Entrepreneur Fund Sector average Nedgroup Investments Mining & Resource Fund Sector average Nedgroup Investments Financials Fund Sector average Asset Allocation Range Nedgroup Investments Positive Return Fund Inflation +4% pa over rolling 3-year periods Nedgroup Investments Stable Fund Inflation +4% pa over rolling 3-year periods Nedgroup Investments Balanced Fund Sector average Nedgroup Investments Managed Fund Average of the Prudential Medium and Variable Equity sectors Nedgroup Investments Bravata Worldwide Flexible Fund Inflation + 5% per annum Nedgroup Investments Core Diversified Fund Inflation +4-6% pa over rolling 5-year periods Nedgroup Investments Core Guarded Fund Inflation +2-4% pa over rolling 3-year periods 10 Nedgroup Investments Abridged Annual Report

13 Unit Trust Performance Fund Size Rm Fund Return % Benchmark Return % Benchmark Income Range Nedgroup Investments Bond Fund All Bond Index Nedgroup Investments Optimal Income Fund STeFI Call rate after income tax (40%) Nedgroup Investments Money Market Fund STeFI Call rate Nedgroup Investments Cash Plus Fund STeFI Composite Nedgroup Investments Flexible Income Fund % STeFI Call rate Nedgroup Investments Property Fund 81 Not applicable Not applicable Sector average International Rand-Denominated Range Nedgroup Investments Global Equity Feeder Fund Sector average Nedgroup Investments Global Balanced Feeder Fund Sector average Nedgroup Investments Global Cautious Feeder Fund USD Libor 1 month (rand equivalent) Corporate Social Responsibility Nedgroup Investments Fundisa Fund Sector average Source: Morningstar, Inc. All rights reserved. For the period 1 year ending 31. Lump sum investment, using NAV-NAV prices with income distributions reinvested. Market Returns: 1 Year Ending 31 All Share Index 19% All Bond Index 15% Inflation 3.5% Source: I-Net Nedgroup Investments Abridged Annual Report 11

14 NEDGROUP INVESTMENTS Rainmaker Fund The fund seeks to offer investors long-term capital growth through active stock selection within the South African equity market. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. 31 Dec 31 Dec Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 2.00% pa Class B 3.42% pa Class B1 0.00% pa Class R 1.14% pa Market Value Rm Rm Medium - High Income available for distribution R 000's Distribution R 000's Consumer Services 9% Telecomms 8% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Industrials 14% Oil & Gas 7% Cash 4% Healthcare 3% Additional 3% Consumer Goods 15% Class A cpu cpu Class A cpu cpu Class B 0.00 cpu cpu Class B cpu cpu Class R cpu cpu Basic Materials 21% Financials 16% 12 Nedgroup Investments Abridged Annual Report

15 Equity Range NEDGROUP INVESTMENTS Equity Fund An equity fund that seeks to offer investors long term capital growth through active stock selection within the South African equity market. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 2.00% pa Class R 1.14% pa Market Value Rm Rm 993 Medium - High 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Industrials 24% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Class A 6.62 cpu 3.77 cpu Class A cpu 3.02 cpu Class R 8.47 cpu 5.24 cpu Basic Materials 24% Consumer Goods 14% Telecomms 6% Oil & Gas 6% Consumer Services 3% Technology 3% Cash 1% Financials 19% Nedgroup Investments Abridged Annual Report 13

16 NEDGROUP INVESTMENTS Quants Core Equity Fund An equity fund that seeks to offer investors long-term capital growth through active stock selection within the South African equity market. The manager utilises a quantitative technique called Price Indifferent Investing to enhance the ability of the fund to meet its objectives. A minimum of 75% of the fund s assets will be invested in domestic equities at all times Maximum financial adviser fee 2.28% Management fee: Class A 1.14% pa Class R 0.86% pa Market Value Rm 666 Rm 592 Medium - High 31 Dec 31 Dec Consumer Goods 11% Consumer Services 9% Income available for distribution R 000's Distribution R 000's Industrials 17% Telecomms 8% Oil & Gas 6% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Cash 5% Technology 2% Healthcare 1% Class A 6.86 cpu cpu Class R 7.91 cpu cpu Financials 18% Basic Materials 23% 14 Nedgroup Investments Abridged Annual Report

17 Equity Range NEDGROUP INVESTMENTS Growth Fund An equity fund that seeks to offer investors long-term capital growth through active stock selection within the South African equity market. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 2.00% pa Class B 3.42% pa Class R 1.14% pa Consumer Services 14% Market Value Rm Rm 728 Industrials 11% Medium - High Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Class A cpu cpu Class A cpu cpu Class B 0.00 cpu 0.40 cpu Class R cpu cpu Basic Materials 20% Additional 10% Consumer Goods 6% Telecomms 5% Technology 4% Oil & Gas 4% Cash 3% Healthcare 2% Financials 21% Nedgroup Investments Abridged Annual Report 15

18 Equity Range NEDGROUP INVESTMENTS Value Fund An equity fund that seeks to offer investors long-term capital growth through active stock selection within the South African equity market. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. 31 Dec 31 Dec Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 2.00% pa Class B 3.42% pa Class R 1.14% pa Market Value Rm Rm 728 Medium - High Income available for distribution R 000's Distribution R 000's Basic Materials 18% Financials 17% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Industrials 28% Consumer Services 14% Consumer Goods 9% Class A cpu cpu Class A cpu cpu Class B cpu cpu Class R cpu cpu Oil & Gas 5% Cash 5% Healthcare 4% 16 Nedgroup Investments Abridged Annual Report

19 Specialist Equity Range NEDGROUP INVESTMENTS Entepreneur Fund A specialist equity fund that seeks to offer investors long term capital growth by actively investing in the shares of small and medium sized companies listed on the JSE. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 2.00% pa Class B 3.14% pa Class R 1.14% pa Industrials 25% Technology 2% Additional 1% Cash 3% Consumer Services 23% Market Value Rm 433 Rm 728 High Healthcare 5% Consumer Goods 11% Class A cpu cpu Class A cpu cpu Class B cpu 7.42 cpu Class R cpu cpu Financials 15% Basic Materials 15% Nedgroup Investments Abridged Annual Report 17

20 NEDGROUP INVESTMENTS Mining & Resource Fund A specialist equity fund that seeks to offer investors long-term capital growth by actively investing in the mining and resources sector of the market. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class R 1.14% pa Market Value Rm 729 Rm 668 High 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Consumer Goods 4% Oil & Gas 14% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Basic Materials 82% Class A 7.68 cpu cpu Class R cpu cpu 18 Nedgroup Investments Abridged Annual Report

21 Specialist Equity Range NEDGROUP INVESTMENTS Financials Fund A specialist equity fund that seeks to offer investors long-term capital growth by actively investing in the shares of financial services companies. A minimum of 75% of the fund s assets will be invested in domestic equities at all times. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class R 1.14% pa Foreign Equities 14% Market Value Rm 194 Rm 158 High Insurance 17% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Class A cpu cpu Class R cpu cpu Domestic Cash 2% Foreign Cash 1% Banks 34% Financial Services 32% Nedgroup Investments Abridged Annual Report 19

22 NEDGROUP INVESTMENTS Balanced Fund The fund seeks to offer investors medium- to long-term income and capital growth by actively investing in a mix of local and international assets. The manager may invest in a combination of local and international equities, bonds, property and cash. A maximum of 75% of the fund s assets may be invested in domestic equities at all times. The fund complies with Regulation 28 of the South African Pension Funds Act. Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Market Value Rm 92 Rm 72 Medium 31 Dec 31 Dec Local Equities 56% Income available for distribution R 000's Distribution R 000's Foreign Assets 13% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Local Cash 8% - Class A cpu cpu June - Class A cpu cpu Local Bonds 23% 20 Nedgroup Investments Abridged Annual Report

23 Asset Allocation Range NEDGROUP INVESTMENTS Managed Fund The fund seeks to offer investors medium- to long-term income and capital growth by actively investing in a mix of local and international equities, bonds, property and cash. A maximum of 75% of the fund s assets may be invested in domestic equities at all times. The fund complies with Regulation 28 of the South African Pension Funds Act. Maximum financial adviser fee 3.42% Management fee: Class A 1.71% pa Class A1 1.43% pa Class B 3.14% pa Class R 1.14% pa Market Value Rm Rm Medium 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Local Equities 44% Local Bonds 2% Foreign Cash 7% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Foreign Equities 13% June Class A 4.34 cpu 3.43 cpu Class A cpu 3.93 cpu Class B 1.79 cpu 1.39 cpu Class R 5.41 cpu 4.46 cpu Local Cash 34% Nedgroup Investments Abridged Annual Report 21

24 NEDGROUP INVESTMENTS Bravata Worldwide Flexible Fund A flexible, worldwide portfolio aiming to maximise total return for investors by actively investing in a mix of equities, bonds, property and cash, both locally and internationally. 31 Dec 31 Dec Income available for distribution R 000's Transfer from capital R 000's Maximum financial adviser fee 3.42% Management fee: Class A Class B Fixed fee of 1.71% plus a performance fee of 20% of the total positive performance above the high watermark, limited to 2.28% (VAT incl.) over any 12-month period. 2.00% to 4.28% pa Market Value Rm 481 Rm 468 Medium - High Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Local Equities 16% Class A 1.60 cpu 2.84 cpu Class B 1.24 cpu 2.51 cpu Local Cash 2% Foreign Bonds 2% Foreign Cash 24% 22 Nedgroup Investments Abridged Annual Report Foreign Equities 56%

25 Asset Allocation Range NEDGROUP INVESTMENTS Core Diversified Fund The fund targets a long-term annual return of inflation +4-6% over rolling 5 years. The fund is compliant with Regulation 28 of the South African pension Funds Act and is suitable for retirement funds. Management fee: 0.57% pa Market Value Rm 86 Rm Dec 31 Dec Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Class B cpu cpu Class C cpu cpu Foreign Nominal Bonds 2% Foreign Inflation-Linked Bonds 1% Local Equities 60% Medium Local Inflation-Linked Bonds 3% Foreign Cash 4% Local Listed Property 4% Local Nominal Bonds 5% Foreign Equities 7% Local Cash 14% Nedgroup Investments Abridged Annual Report 23

26 NEDGROUP INVESTMENTS Core Guarded Fund The fund targets a long-term annual return of inflation +2-4% over rolling 3 years. The fund is compliant with Regulation 30 of the South African Medical Schemes Act. Management fee 0.57% pa Market Value Rm 34 Medium 31 Dec Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's 346 Total assets R 000's Foreign Bonds 4% Local Inflation-Linked Bonds 6% Foreign Cash 6% Local Bonds 15% Local Listed Property 4% Foreign Inflation-Linked Bonds 2% September June March Local Cash 28% Class B cpu cpu cpu 7.21 cpu Local Equities 35% 24 Nedgroup Investments Abridged Annual Report

27 Asset Allocation Range NEDGROUP INVESTMENTS Positive Return Fund The fund seeks to offer investors total returns that are in excess of inflation over the medium-term through active asset allocation and with a high emphasis on capital protection. A maximum of 75% of the fund s assets may be invested in domestic equities at all times. The fund complies with Regulation 28 of the South African Pension Funds Act. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Maximum financial adviser fee 3.42% Management fee: 0 to 2.85% pa (Performance fee calculated daily as 10% of total positive performance Management fee: Class A above high watermark, limited to a maximum of 2.85% (incl. VAT) over any rolling 12-month period.) Class A1 Class A2 Class B Base fee: 0.57% plus performance fee calculated daily as 10% of total positive performance above high watermark, limited to a maximum of 2.85% (including VAT) over any rolling 12-month period. 1.42% pa 1.71% to 4.56% pa Oil & Gas 3% Industrials 2% Healthcare 1% Basic Materials 24% Consumer Services 4% Telecommunications 4% Listed Bonds 5% June Class A 2.25 cpu 2.38 cpu Class A cpu 2.08 cpu Class A cpu 1.97 cpu Class B 1.41 cpu 1.55 cpu Money Market Instruments 29% Consumer Goods 8% Cash 10% Market Value Rm Rm Low - Medium Financials 10% Nedgroup Investments Abridged Annual Report 25

28 Asset Allocation Range NEDGROUP INVESTMENTS Stable Fund The fund seeks to offer investors total returns that are in excess of inflation over the medium term. A maximum of 40% of the fund s assets may be invested in domestic equities at all times. The fund complies with Regulation 28 of the South African Pension Funds Act. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's June Maximum financial adviser fee 3.42% Management fee: % pa (Performance fee calculated daily as 10% of total positive performance Management fee: Class A above high watermark, limited to a maximum of 2.85% (incl. VAT) over any rolling 12-month period.) Class A1 3.52% pa Class B 2.79% pa Class C 1.54% pa Foreign Cash 6% Market Value Rm Rm 385 Local Cash 36% Low - Medium Class A 1.53 cpu 1.89 cpu Class A cpu 1.61 cpu Class B 0.71 cpu 1.02 cpu Class C 1.40 cpu 1.68 cpu 26 Nedgroup Investments Abridged Annual Report Listed Bonds 5% Foreign Equities 13% Local Equities 40%

29 Income Range NEDGROUP INVESTMENTS Bond Fund A specialist portfolio aiming to secure an optimal overall yield, comprising both capital and income. The fund invests across government and parastatal bonds, as well as other fixed income securities approved by the Financial Services Board. Maximum financial adviser fee 0.68% Management fee: Class A 0.57% pa Class B 2.22% pa Class R 0.57% pa Market Value Rm 322 Rm 274 Low - Medium 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's years 1% 7-12 years 29% 0-1 year 14% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's September June March Class A 3.14 cpu 3.07 cpu 3.14 cpu 3.08 cpu Class B 2.48 cpu 2.44 cpu 2.52 cpu 2.48 cpu Class R 3.18 cpu 3.08 cpu 3.13 cpu 3.08 cpu 12+ years 21% Maturity Spread 3-7 years 35% Nedgroup Investments Abridged Annual Report 27

30 NEDGROUP INVESTMENTS Optimal Income Fund The primary investment objective of the portfolio is to seek to generate returns that exceed cash deposits on an after-tax basis, i.e. returns similar to those available from a bank, but in a far more tax efficient manner through the generation of dividends, capital gains and interest income. Maximum financial adviser fee 1.71% Management fee: Class A 0.80% pa Class B 2.39% pa Market Value Rm Rm 768 Low 31 Dec 31 Dec Preference Shares 22% Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Money Market Floating 18% September June March Class A 0.79 cpu 2.21 cpu 1.57 cpu 1.84 cpu Class B 0.18 cpu 1.64 cpu 1.01 cpu 1.28 cpu Credit Bonds 8% Hybrid Debt 5% Hedged Equity 47% 28 Nedgroup Investments Abridged Annual Report

31 Income Range NEDGROUP INVESTMENTS Money Market Fund The fund aims to maximise interest income while protecting the initial capital and providing immediate liquidity to investors by investing in short-term money market instruments. Management fee: Class R 0.57% pa Market Value Rm Rm Dec 31 Dec Low Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's months 1% 0-3 months 99% Maturity spread November October September Class R 0.50 cpu 0.51 cpu 0.54 cpu 0.54 cpu August July June May Class R 0.57 cpu 0.58 cpu 0.57 cpu 0.60 cpu April March February January Class R 0.59 cpu 0.62 cpu 0.56 cpu 0.62 cpu Nedgroup Investments Abridged Annual Report 29

32 NEDGROUP INVESTMENTS Cash Plus Fund The fund aims to preserve capital and to provide a total return in excess of that offered by money market portfolios, regular annual fixed deposits and cash accounts. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Management fee: Class A 0.40% pa Class B 0.57% pa Class C 0.29% pa Market Value Rm 942 Rm 370 Low Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Months 100% Maturity Spread September June March Class A 1.71 cpu 1.89 cpu 1.93 cpu 2.02 cpu Class B 1.67 cpu 1.84 cpu 1.90 cpu 1.98 cpu Class C 1.74 cpu 1.91 cpu 1.97 cpu 2.05 cpu 30 Nedgroup Investments Abridged Annual Report

33 Income Range NEDGROUP INVESTMENTS Flexible Income Fund The fund aims to maximise income and identify opportunistic capital gains by actively repositioning the portfolio across a dynamic mix of cash, bonds and other fixed interest securities. 31 Dec 31 Dec Income available for distribution R 000's Distribution R 000's Maximum financial adviser fee 0.68% Management fee: % pa (Performance fee calculated daily as 10% of total positive performance Management fee: Class A above high watermark, limited to a maximum of 1.43% (incl. VAT) over any rolling 12-month period.) Management fee: % pa (Base fee of 0.57% plus performance fee calculated daily as 10% Class A1 of total positive performance above high watermark, limited to a maximum of 1.43% (incl. VAT) over any rolling 12-month period.) Class A2 1.25% pa Class B 2.28% pa Class R 0.86% pa Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Market Value Rm Rm Low - Medium Inflation-Linked Bonds 15% Credit Bonds 16% September June March Class A cpu cpu cpu cpu Class A cpu cpu cpu cpu Class A cpu cpu cpu cpu Class B cpu cpu cpu cpu Class R cpu cpu cpu cpu Cash 2% Money Market Floating 50% International Assets 17% Nedgroup Investments Abridged Annual Report 31

34 Income Range NEDGROUP INVESTMENTS Property Fund A specialist portfolio aiming to secure an optimal overall yield comprising both income and long-term capital appreciation by investing primarily, but not exclusively, in listed property shares and collective investment schemes in property. The portfolio shall maintain a minimum effective exposure to real estate securities of 50% or such other percentage as prescribed by ASISA. Maximum financial adviser fee 3.42% Management fee: Class A 1.14% pa Market Value Rm 81 Medium - High 6 Months to 31 Dec Income available for distribution R 000's Distribution R 000's Cash 4% Real Estate Investment Trusts 22% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's 591 Total assets R 000's Real Estate Holding & Development 74% September Class A 0.62 cpu 2.17 cpu Class A cpu 2.22 cpu 32 Nedgroup Investments Abridged Annual Report

35 International Rand-Denominated Range NEDGROUP INVESTMENTS Global Equity Feeder Fund A global equity fund that aims to provide investors with long-term capital growth through active stock selection in global equity markets. A minimum of 85% of the fund s assets will be invested offshore, with a minimum of 75% in equities at all times. 31 Dec 31 Dec Maximum financial adviser fee 3.42% Management fee: Class A - Feeder Fund 0.00% pa - Offshore Fund 1.50% pa Class B 2.39% pa Class B1 2.75% pa Market Value Rm 493 Rm 251 Medium - High Income available for distribution R 000's (4 085) Distribution R 000's 87 0 European Equity 16% UK Equity 13% Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Foreign Cash 11% Domestic Cash 19% Class A 0.03 cpu 0.00 cpu Class B 0.07 cpu 0.00 cpu Emerging Markets Equity 7% Japan Equity 6% US Equity 28% Nedgroup Investments Abridged Annual Report 33

36 NEDGROUP INVESTMENTS Global Balanced Feeder Fund A global balanced fund that aims to provide investors with long-term capital growth and income through a diversified portfolio of foreign equities and fixed income securities. A minimum of 85% of the fund s assets will be invested offshore. 31 Dec 31 Dec Maximum financial adviser fee 3.42% Management fee: Class A - Feeder Fund 0.00% pa - Offshore Fund 1.50% pa Class B 1.25% pa Class R 0.00% pa Market Value Rm 661 Rm 508 Medium - High Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Foreign Equities 60% Foreign Fixed Interest 19% Domestic Cash 10% Foreign Cash 7% Foreign Alternative Assets 3% Foreign Property 1% Class A 1.24 cpu 0.56 cpu Class B 0.00 cpu 0.00 cpu Class R 0.41 cpu 0.27 cpu 34 Nedgroup Investments Abridged Annual Report

37 International Rand-Denominated Range NEDGROUP INVESTMENTS Global Cautious Feeder Fund A low-risk asset allocation fund that aims to provide investors with steady long-term capital growth, while at the same time controlling the level of downside risk. The fund will invest in a diversified portfolio of foreign equities and fixed income securities with a maximum equity exposure of 50%. A minimum of 85% of the fund s assets will be invested offshore. Maximum financial adviser fee 3.42% Management fee: Class A 0.00% pa Offshore Fund 1.50% pa Class A1 0.00% pa Class B 1.25% pa Market Value Rm 3 Rm 1 Medium - High Year Ended 31 Dec 2 Months Ended 31 Dec Income available for distribution R 000's (12) 0 Distribution R 000's 0 1 Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's 0 1 Total assets R 000's Foreign Equities 25% Foreign Cash 42% Domestic Cash 3% Foreign Convertibles 6% Class A 0.00 cpu 0.56 cpu Class A cpu 0.99 cpu Class B 0.00 cpu 0.00 cpu Foreign Bonds 24% Nedgroup Investments Abridged Annual Report 35

38 Corporate Social Responsibility NEDGROUP INVESTMENTS Fundisa Fund A savings fund where you can save money for your children s education and receive a government grant as a bonus for your savings. Management fee 0.00% pa Market Value Rm 11 Rm 5 31 Dec 31 Dec Low - Medium Income available for distribution R 000's Distribution R 000's Statement of financial position Total equity and liabilities R 000's Capital value of unit portfolio R 000's Current liabilities R 000's Total assets R 000's Class A 8.75 cpu cpu Class G 8.75 cpu cpu Cash 100% of the Central Fundisa Fund 36 Nedgroup Investments Abridged Annual Report

39 Disclaimer Collective Investment Schemes in Securities (CIS) are generally medium- to long-term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. The price of each unit is aimed at a constant value. The total return to the investor is primarily made up of interest received, but may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. CIS are traded at ruling prices and can engage in borrowing and scrip lending. Different classes of units apply to these portfolios and are subject to different fees and charges. A schedule of fees and charges and maximum financial planner fees is available on request from Nedgroup Investments. Financial planner fees may be paid and if so, would be included in the overall costs. A Feeder Fund is a portfolio that, apart from assets in liquid form, consists solely of participatory interests in a single portfolio of a collective investment scheme. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. s may be closed or capped at any stage. Nedgroup Investments is a member of the Association of Savings & Investment South Africa.

40 Contact us Client Service Centre (within South Africa) (outside South Africa) Tel: Tel: Fax: Fax: Website: BRANDLAB/43 Western Cape BoE Clocktower, Clocktower Prescient, V&A Waterfront, Cape Town, 8001 PO Box 1510, Cape Town, 8000 Gauteng & Pretoria Nedbank Building Second Floor I Block 135 Rivonia Road, Sandown, 2197 PO Box 582, Johannesburg, 2000 Durban Nedbank Ridgeside, 2 Ncondo Place, Umhlanga, 4320 PO Box 50995, Musgrave, 4062 Copies of the audited financial statements for Nedgroup Collective Investments Limited, together with each of the Nedgroup Investments unit trust portfolios are available on request, free of charge. Simply call our Client Service Centre or send us an to clientservices@nedgroupinvestments.co.za to request a printed or electronic copy. Nedgroup Collective Investments Company Registration Number: 1997/001569/06 Trustees The Standard Bank of SA Limited, PO Box 54, Cape Town, 8000 Directors D Macready, NA Andrew, CE Sevenoaks, MA Hoosain, J Bestbier Company Secretary Nedgroup Secretariat Services (Proprietary) Limited