Fund Availability on Linked Platforms

Transcription

1 Fund Availability on Linked Platforms March 2016

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3 01 About STANLIB 02 STANLIB core range 04 STANLIB funds on external guided architecture platforms 05 STANLIB funds on buy lists 06 STANLIB funds on external open architecture platforms 07 STANLIB offshore funds on external offshore platforms 08 STANLIB core and extended range insights 29 Multiple capabilities 30 Contact details

4 Investment focus backed by * years of collective investment experience *As at 30 April 2016

5 A leading investment business We are a Pan-African multi-specialist investment company, active in ten African countries. We have business partners in North America, the United Kingdom, Europe, the Middle East, and Asia. We have USD37 billion assets under management and administration (ZAR579 billion, as at 31 December 2015) for over retail and institutional customers across Africa. At STANLIB we really believe in the African story. Our continent has a good story to tell and there are excellent investment opportunities. We see the challenges but we also see the potential. We believe in Africa s people. - Seelan Gobalsamy, STANLIB CEO About STANLIB STANLIB was founded in 2002 when Standard Bank Asset Management and Liberty Asset Management joined forces. STANLIB is fully owned by Liberty Holdings Limited and is a subsidiary of the Standard Bank Group. We ve built our business on the same foundation as our parent companies Standard Bank and Liberty Holdings focusing on today while always preparing for tomorrow. This allows us to continually meet our clients needs no matter how they evolve. Our head office is in Johannesburg, with regional offices in other major urban centres around South Africa and in nine other African countries, with further expansion plans afoot. This gives us the knowledge that can only come from on-theground presence on the continent. In addition, we leverage our group presence, which complements our own. Additional facts STANLIB has more than 100 investment experts We have one of the oldest existing unit trusts in South Africa, the STANLIB Equity Fund STANLIB pioneered the Fundisa Fund which is a unit trust investment created to encourage lower income families to save for their children s tertiary education for as little as R40 per month. It s the first ever public/private partnership in the services industry We employ over 735 employees directly STANLIB manages over R100 billion in money market assets and we are the largest player in the money market space Љ Љ We have won 82 Raging Bull Awards and 92 Morningstar Awards. STANLIB is proud to have been awarded the following accolades at the Raging Bull 2016 Award ceremony: Top Risk-Adjusted Performers STANLIB Multi-Manager Global Bond Fund, which is well diversified across major international bond markets, was awarded a certificate for top performance in the Best Risk-Adjusted Offshore Global Fixed Interest Bond category STANLIB s Offshore America Fund received a certificate for the best Risk-Adjusted Offshore USA Equity General Fund. The Fund is benchmarked against the S&P500 Index and has a 94% exposure to equity, mostly in the US About this document This document is aimed at you, the financial adviser, providing a guide on how to access STANLIB funds via the following Linked Product Platforms: AIMS Alexander Forbes Allan Gray Ashburton Discovery Glacier Investec Momentum Old Mutual PPS PSG Sygnia Wealthport Additional updates on all STANLIB portfolios are available from your Investment Specialist or Relationship Manager, the STANLIB call centre ( ) or visit our website on 1

6 STANLIB core range TIme horizon Conservative Moderately Conservative Moderate Moderately Aggressive Aggressive Maximum Exposure to Growth Assets 100% 25% 5 years+ STANLIB Equity Fund 75% 25% 25% 3-5 years STANLIB Balanced Fund STANLIB Absolute Plus Fund 75% 25% 1-3 years STANLIB Balanced Cautious Fund 40% 25% 15% 1 years+ STANLIB Flexible Income Fund 10% Domestic Equity Property Offshore 2

7 Risk Profile Fund Time Horizon Fund Objective Portfolio LImits Regulation 28 Performance Fees Offshore Exposure Launch Date Aggressive STANLIB Equity Fund 5 years+ The fund aims to provide longterm capital growth by investing in both local and offshore equities. Exposure to offshore assets is limited to a maximum of 25% X X v Jan 70 Moderately aggressive STANLIB Balanced Fund 3-5 years The fund aims to provide capital growth over time at a lower risk than pure equity funds. The fund invests in a diversified spread of cash, bonds, property, equity and offshore assets. Exposure to equities is limited to a maximum of 75% v X v Aug 94 Moderate STANLIB Absolute Plus Fund 3-5 years The fund aims to provide investors exposure to the potential upside of domestic equities with limited downside. The fund aims to provide 90% capital protection over a rolling one-year period by investing in financial instruments that protect the portfolio in down markets. Exposure to equities is limited to a maximum of 75% v X X Dec 05 Moderately conservative STANLIB Balanced Cautious Fund 1-3 years The fund aims to provide reasonable capital growth and income over a three-year investment horizon. The fund invests in a diversified spread of cash, bonds, property, equity and offshore assets with a maximum of 40% in property and equities. Exposure to equities and properties is limited to a maximum of 40% v X v Jan 09 Conservative STANLIB Flexible Income Fund 1 year+ The fund aims to provide income generation and capital growth, targeting outperformance over traditional money market income funds, by investing in the full spectrum of fixed interest instruments and property. Maximum weighted average maturity of two years and exposure to property is limited to a maximum of 10% v X X Apr 04 *Regualtion 28 stipulates that the maximum exposure to equities and property combined is 90% 3

8 STANLIB Funds on External Guided Architecture Platforms Ashburton Investments STANLIB Bond Fund (A) 0.75% STANLIB Global Bond Feeder Fund (B3) ** 0.30% STANLIB Global Balanced Cautious Feeder Fund (B3) ** 0.50% STANLIB Global Balanced Feeder Fund (B3) ** 0.50% STANLIB Property Income Fund (B1) ** 1.00% Glacier Fusion Total Annual Fee Annual Investment Fee STANLIB Absolute Plus Fund (B4) 2.10% 0.60% 0.75% STANLIB Aggressive Income Fund (B5) 2.10% 0.60% 0.75% STANLIB Balanced Fund (B4) * 2.10% 0.60% 0.75% STANLIB Balanced Cautious Fund (B4) 2.10% 0.60% 0.75% STANLIB Income Fund (B8) 2.10% 0.60% 0.75% STANLIB Global Balanced Cautious Feeder Fund (B4) ** 2.35% 0.85% 0.75% Momentum Essential Total Annual Fee Annual Investment Fee STANLIB Balanced Fund (B4) * 2.10% 0.60% 0.75% STANLIB Balanced Cautious Fund (B4) 2.10% 0.60% 0.75% STANLIB Equity Fund (B4) 2.10% 0.60% 0.75% STANLIB Income Fund (B8) 2.10% 0.60% 0.75% STANLIB Inflation + 5% Fund (B4) 2.10% 0.60% 0.75% STANLIB Property Income Fund (B4) 2.10% 0.60% 0.75% STANLIB SA Equity Fund (B4) * 2.10% 0.60% 0.75% STANLIB Quants Fund (B4) 2.10% 0.60% 0.75% STANLIB Value Fund (B4) * 2.10% 0.60% 0.75% PPS Investments STANLIB Absolute Plus Fund (B1) 1.00% STANLIB Balanced Fund (B1) 1.00% STANLIB Equity Fund (R) 1.00% Investment Management Fee Distribution Fee Distribution Fee Annual Management Fee PSG Asset Management Total Annual Fee Fund Rebate STANLIB Absolute Plus Fund (B1) 1.00% 0.00% STANLIB Aggressive Income Fund (B1) 0.90% 0.00% STANLIB Balanced Fund (B1) 1.00% 0.00% STANLIB Euro Currency Fund of Funds (A) 0.50% 0.10% STANLIB Extra Income Fund (R) 0.75% 0.00% STANLIB Flexible Income Fund (B1) 0.75% 0.00% STANLIB Global Balanced Feeder Fund (B1) ** 1.00% 0.00% STANLIB Global Bond Feeder Fund (A) ** 1.50% 0.50% STANLIB Global Equity Feeder Fund (R) ** 1.00% 0.00% STANLIB Global Property Feeder Fund (B1) 0.60% 0.00% STANLIB Income Fund (B6) 0.60% 0.00% STANLIB Property Income Fund (B1) 1.00% 0.00% Sygnia Emporium STANLIB Flexible Income Fund (B1) 0.75% Investment Management Fee 4 Wealthport STANLIB ALSI 40 Fund (A) 0.42% STANLIB Balanced Fund (B1) 1.00% STANLIB Bond Fund (A) 0.75% STANLIB Extra Income Fund (R ) 0.75% STANLIB Flexible Income Fund (B1) 0.80% STANLIB Income Fund (B6) 0.60% STANLIB Index Fund ( R) 0.50% STANLIB Institutional Money Market Fund (B13) 0.50% STANLIB Property Income Fund (B1) 1.00% * Excluding performance fee ** Plus underlying fees Annual Management Fee

9 STANLIB Funds on Buy Lists ABSA Approved List STANLIB ALSI 40 Fund STANLIB Bond Fund STANLIB Global Equity Feeder Fund STANLIB Global Property Feeder Fund STANLIB Index Fund STANLIB Industrial Fund STANLIB Global Balanced Feeder Fund STANLIB Property Income Fund FNB STANLIB Bond Fund STANLIB Global Balanced Feeder Fund STANLIB Global Balanced Cautious Fund STANLIB Global Bond Feeder Fund STANLIB Property Income Fund Glacier Shopping List STANLIB Bond Fund STANLIB Income Fund STANLIB Property Income Fund Harbour Advisory STANLIB Global Property Feeder Fund STANLIB Extra Income Fund STANLIB Money Market Fund PSG Wealth Product Menu STANLIB Aggressive Income Fund STANLIB Flexible Income Fund STANLIB Global Balanced Feeder Fund STANLIB Global Equity Feeder Fund STANLIB Global Equity Fund (USD) STANLIB Global Property Feeder Fund STANLIB Property Income Fund 5

10 STANLIB Funds on External Open Architecture Platforms (Linked Platforms) Domestic AIMS Alexander Forbes Discovery Glacier Investec Momentum STANLIB Absolute Plus Fund* X X X X STANLIB Aggressive Income Fund X X X X X X STANLIB ALSI 40 Fund X X X X X STANLIB Balanced Fund* X X X X X X STANLIB Balanced Cautious Fund* X X X X STANLIB Bond Fund X X X X X STANLIB Capital Growth Fund X X X X X STANLIB Enhanced Yield Fund X X X STANLIB Equity Fund X X X X STANLIB Extra Income Fund* X X X X X STANLIB Financials Fund X X X STANLIB Flexible Income Fund* X X X X STANLIB Income Fund X X X X X X STANLIB Index Fund X X X X X STANLIB Industrial Fund X X X STANLIB Inflation Plus 3% Fund* X X X X STANLIB Inflation Plus 5% Fund* X X X X STANLIB Property Income Fund X X X X X X STANLIB Quants Fund X X X X X STANLIB Resources Fund X X X X STANLIB SA Equity Fund X X X X X STANLIB Shari ah Equity Fund X X X X X STANLIB Value Fund X X X X X * Regulation 28 Compliant Global (Rand Denominated) STANLIB Euro Currency Fund of Funds STANLIB European Equity Feeder Fund STANLIB Global Balanced Cautious Feeder Fund STANLIB Global Balanced Feeder Fund AIMS Alexander Forbes Discovery Glacier Investec Momentum X X X X X X X X X X X X X X X X X STANLIB Global Bond Feeder Fund X X X X X STANLIB Global Equity Feeder Fund X X X X X STANLIB Global Property Feeder Fund STANLIB US Dollar Currency Fund of Funds X X X X X X X X X 6

11 STANLIB Offshore Funds on External Offshore Platforms Equity Funds Currency Momentum Wealth International STANLIB European Equity Fund USD X X STANLIB Global Emerging Markets Fund USD X X STANLIB Global Equity Fund USD X X Glacier International Allan Gray Old Mutual International Fixed Interest And Cash Currency Momentum Wealth International Glacier International STANLIB Global Bond Fund USD X X X STANLIB Euro Cash Fund EUR X X STANLIB Sterling Cash Fund GBP X X STANLIB US Dollar Cash Fund USD X X Allan Gray Old Mutual International Managed Solutions Currency Momentum Wealth International Glacier International Allan Gray STANLIB Global Balanced Fund USD X X X STANLIB Global Balanced Cautious Fund USD X X X X Old Mutual International Property Currency Momentum Wealth International Glacier International Allan Gray STANLIB Global Property Fund USD X X X Old Mutual International For more information on STANLIB s offshore range, please speak to your Investment Specialist or visit All of the above funds are FSB approved. 7

12 STANLIB Core and Extended Range Insights Absolute Return Franchise STANLIB Absolute Plus Fund 10 Balanced Franchise STANLIB Balanced Fund 12 STANLIB Balanced Cautious Fund 13 Equity Franchise STANLIB Equity Fund 15 STANLIB SA Equity Fund 16 Fixed Interest Franchise STANLIB Aggressive Income Fund 18 STANLIB Flexible Income Fund 19 STANLIB Bond Fund 20 STANLIB Income Fund 21 Property Franchise STANLIB Property Income Fund 23 STANLIB Global Property Feeder Fund 24 Global Solutions STANLIB Global Equity Feeder Fund 25 STANLIB Global Balanced Feeder Fund 26 STANLIB Global Balanced Cautious Feeder Fund 27 Note: STANLIB funds not listed above are accessible on Linked Platforms and access to these funds is detailed on page 6. 8

13 ƴƴ Marius Oberholzer ƴƴ Peter van der Ross Absolute Return Franchise Marius Oberholzer joined STANLIB from Sarala Capital in Cape Town, where he was a Managing Partner responsible for providing strategic direction for the firm. His role was focused on corporate finance solutions and spearheading the group s unlisted investment activities. Marius holds a BCom degree from Stellenbosch and an MSc in Global Finance from the Hong Kong University of Science and Technology and New York University. Peter van der Ross joined STANLIB in January 2016 as a Portfolio Manager of Absolute Return. Peter has 17 years of investment management experience, as well as a background in life insurance at Momentum and Liberty. He was previously Head of LibFin Investments, where he was the custodian of the relationship between Liberty and STANLIB, as well as other service providers. Before joining Liberty, Peter was Head of Investment Strategy at Momentum Asset Management where he chaired the asset allocation committee. He also spent five years at RMB Asset Management. His experience and background are exceptionally complementary to the existing and varied skills sets in the Absolute Return team. Peter holds a Bachelor of Business Science from the University of Cape Town and is a CFA Charterholder. 9

14 STANLIB Absolute Plus Fund (Regulation 28 compliant) The fund is a specialist portfolio and aims to achieve capital growth, as well as some level of capital protection over the long term. In the short term the fund aims to profit from a rising equity market and protect investors against capital losses in a weak equity market. Who should invest? The fund is targeted at investors who: Are aiming for a certain level of targeted return and capital preservation over their investment term Find comfort in their money being managed towards clearly defined investment objectives Fund update Quarter Market review Investors are breathing a sigh of relief as a difficult investment period punctuated by robust volatility seems behind us. Downside pressures were felt until late February before risk assets finished the quarter off in fine form. At one point in January the South African Top40 Equities were trading down by 10% on the year and listed property was down in excess of 8%. This volatility was driven largely by global fears which added to familiar local political and economic woes. We remain gripped in a world of low economic growth, currency dislocations, questions around commodity prices and especially fears of oil oversupply. Oversupply should lead to lower oil prices which have fed into corporate credit markets. Additionally, equity markets are digesting a continued earnings recession as companies and analysts revise their estimates lower. The above non-exhaustive list of concerns explains some of the volatility which seemingly was pushed to the back of investors minds post the Shanghai meeting between the G20 nations. While there was no formal announcement from Shangai, it became clear that Europe and Japan approved the agreement to allow their currencies to strengthen against the dollar, but by virtue, also strengthen against the Chinese yuan which in turn removed some of the concerns around China needing to devalue its currency. Chinese devaluation concerns had previously resulted in market fragility in August 2015 and January 2016 and rightly, investors have been grappling with the negative impact that a once-off devaluation would cause on asset prices globally. Post this Shanghai Accord we seem to have now progressed to a world where it appears the Federal Reserve who hiked rates in December realise some of the unintended consequences of their actions, and appear now to be more dovish than was previously the case over the last few months. Additionally, the European Central Bank (ECB) has brought about more accommodative policy in Europe amidst continued economic weakness, lack of inflation and negative nominal yields. It appears that we are back into a coordinated policy environment between the world s most powerful Central Bankers. This has provided some relief or support for asset prices amidst the continued earnings recessions (weaker earnings). While currencies have reacted to the new environment quickly it remains to be seen if this is sustainable since yen and euro strength will increase deflationary effects in these countries. How long until coordinated response is too painful and the status quo is unsettled and we head into another round of volatility or will equities trend lower given the expected earnings trajectory despite the appearance of a status quo. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) 4.09 Benchmark standard deviation (ann.) 1.79 Risk profile Moderate Asset allocation Domestic Equity Domestic Bonds Domestic Cash Global Property Global Cash Performance figures (%) (March 2016) 13.81% 29.83% 46.47% 5.00% 4.90% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark CPI 10

15 ƴ ƴ Robin Eagar ƴ ƴ Herman van Velze ƴ ƴ Warren Buhai ƴ ƴ Kobus Nell ƴƴ Anwaar Wagner Multi-Asset Franchise Robin Eagar started his investment career in 1998 working in corporate finance and private equity. At STANLIB he began as an Industrial Analyst, transferring in 2006 to managing general equity funds. Robin has successfully managed Balanced Funds since 2007 and is currently Co-Head of the Multi-Asset Franchise. Herman van Velze Herman joined STANLIB in 1995 as a research analyst. Since then he has held the positions of Head of Research, Portfolio Manager, Head of Balanced Funds and he is currently the Head of Investments and a member of STANLIB s executive committee. As part of the executive committee, Herman oversees all STANLIB s investment activities in STANLIB s multi-specialist model. Herman chairs the both the investment executive committee and the franchise oversight committee meetings. The franchise oversight committee assesses Franchise philosophy, processes, and risk limits. Following five years in corporate finance at Standard Bank, Warren Buhai joined STANLIB in 2005 where he initially specialised in resources analysis and portfolio management. He has been a portfolio manager in the Multi-Asset Franchise since Kobus Nell joined STANLIB in 2003 on completion of his accountancy articles in the Unit Trust pricing department and Corporate Actions and Confirmations. He joined the Unconstrained Equity Franchise as a research analyst and assistant portfolio manager in He also specialises in the Resources sector research and has been managing the STANLIB Gold and Precious Metals Fund (now merged with the STANLIB Resources Fund) since He is a PricewaterhouseCoopers-trained chartered accountant, and is also a CFA charter holder. Anwaar Wagner joined STANLIB in 2015 as a Portfolio Manager in the Multi-Asset Franchise, with 17 years of investment management experience including five years of International investing. He previously worked at Old Mutual Global Emerging Markets(GEM) boutique as the Portfolio Manager of the GEM Fund. Prior to that, he worked as Head of Basic Materials, Equity Analyst and Portfolio Manager for the Old Mutual Resources Fund. His passion and wealth of industry experience has seen him bag three Raging Bull Awards and S&P Micropal Awards. Anwaar started out as a Trainee Analyst at Oasis Management before moving to Metropolitan Asset Managers in He holds a Bachelor of Business Science from the University of Cape Town and is Registered Person with the South African Institute of Financial Markets (SAIFM). 11

16 STANLIB Balanced Fund (Regulation 28 compliant) The STANLIB Balanced Fund provides capital growth over time at a lower risk than pure equity funds. The fund invests in a diversified spread of cash, bonds, property, equity and offshore assets with a maximum of 75% in equities. The fund is suitable for retirement savings schemes. Who should invest? The fund is targeted at investors: Aiming to achieve capital growth with lower risk than equity only funds With a time horizon of five years or more to invest With a moderately aggressive risk profile Fund update Quarter Fund review The STANLIB Balanced Fund increased by 1.6% over the last quarter ended 31 March 2016, underperforming its relative benchmark by 3.3%. The stand out in the quarter was the volatility in risky assets and the 5.4% appreciation in the rand. Domestic interest rate sensitive asset classes performed well in this environment with domestic bonds outperforming domestic equities. Domestic multi-national industrial equities also underperformed its asset class in this environment. Similarly, international equities suffered a decline of 4.9% after its stellar performance in Our local market experienced volatile swings in performance during the quarter, falling almost 9% in the first 21 days of 2016 and then rallying more than 16%. The decline can be attributed to negative sentiment around Chinese growth and worries over further devaluation of the Renminbi coming into The initial pullback was reversed by dovish comments from the US Federal Reserve, which saw the investment community reduce its expectation for interest rate hikes in This coupled with enhanced stimulus measures from the European Central Bank (ECB) triggered a risk-on view of the market. The Resources Sector reversed its decline with a 13% bounce in the quarter, although the fundamentals appeared to have little to do with the rally. Financials followed with a 5.4% return, although the rate hiking cycle may limit this, whilst industrials declined by 0.7%. Global equities rose modestly in the first quarter with the MSCI Emerging Markets (EM) outperforming the Developed Markets. Equity valuation levels remains at elevated levels, with a preference for income products which should still be able to deliver inflation beating returns without the risk of substantial capital losses in the former. Our preference remains skewed to offshore equities, where we find far more value and conviction relative to an expensive domestic equity market. Looking ahead We have positioned the fund conservatively, given the extent of equity market gains over the past six years, together with the level of valuations and continued uncertainty around the global growth path; we remain cautiously tilted to higher quality multi-national companies that have a long-term history of compounding returns over time. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) 5.05 Benchmark standard deviation (ann.) 9.47 Risk profile Moderate Asset allocation Domestic Equity Domestic Bonds Domestic Cash Global Equity Global Property Global Cash Other Performance figures (%) (March 2016) 33.67% 10.92% 26.23% 14.37% 4.16% 8.38% 2.26% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 60% FTSE/JSE Shareholders Weighted All Share Index 25% BEASSA All Bond Index 9% MSCI World Index 6% Barclays Global Aggregate Bond Index 12

17 STANLIB Balanced Cautious Fund (Regulation 28 compliant) The STANLIB Balanced Cautious Fund is a low equity balanced fund aiming to provide reasonable capital growth and income over a three-year investment horizon. The fund invests in a diversified spread of cash, bonds, property, equity and offshore assets with a maximum of 40% in property and equities. The fund is suitable for retirement savings schemes. Who should invest? The fund is targeted at investors: With a time horizon of three years to invest Aiming for moderate capital growth and a reasonable level of income With a moderately conservative risk profile Fund update Quarter Fund review The STANLIB Balanced Fund increased by 2% over the last quarter ended 31 March 2016, underperforming its relative benchmark by 1.6%. The three and five year rolling performance remains good with 0.5% and 1.1% respective benchmark outperformance. The stand out in the quarter was the volatility in risky assets and the 5.4% appreciation in the rand. Domestic interest rate sensitive asset classes performed well in this environment with domestic bonds outperforming domestic equities. Domestic multi-national industrial equities also underperformed its asset class in this environment. Similarly, international equities suffered a decline of 5% after its stellar performance in Our local market experienced volatile swings in performance during the quarter, falling almost 9% in the first 21 days of 2016 and then rallying more than 16%. The decline can be attributed to negative sentiment around Chinese growth and worries over further devaluation of the Renminbi coming into The initial pullback was reversed by dovish comments from the US Federal Reserve, which saw the investment community reduce its expectation for interest rate hikes in This coupled with enhanced stimulus measures from the European Central Bank (ECB) triggered a risk-on view of the market. The Resources Sector reversed its decline with a 13% bounce in the quarter, although the fundamentals appeared to have little to do with the rally. Financials followed with a 5.4% return, although the rate hiking cycle may limit this, whilst industrials declined by 0.7%. Global equities rose modestly in the first quarter with the MSCI Emerging Markets (EM) outperforming the Developed Markets. Equity valuation levels remains at elevated levels, with a preference for income products which should still be able to deliver inflation beating returns without the risk of substantial capital losses in the former. Our preference remains skewed to offshore equities, where we find far more value and conviction relative to an expensive domestic equity market. Looking ahead We have positioned the fund conservatively, given the extent of equity market gains over the past six years, together with the level of valuations and continued uncertainty around the global growth path; we remain cautiously tilted to higher quality multi-national companies that have a long term history of compounding returns over time. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) 2.50 Benchmark standard deviation (ann.) 4.55 Risk profile Moderately conservative Asset allocation Domestic Equity Domestic Bonds Domestic Cash Global Equity Global Property Global Bonds Global Cash Other Performance figures (%) (March 2016) 16.26% 11.29% 50.44% 6.47% 4.10% 6.91% 3.62% 0.90% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 45% STeFI Call Deposit Rate Index 25% FTSE/JSE Shareholders Weighted All Share Index 15% BEASSA All Bond Index 6% Barclays Global Aggregate Bond Index 5% FTSE/JSE SA Listed Property Index (SAPY) 4% MSCI AC World Index (ZAR) 13

18 ƴ ƴ Robin Eagar ƴ ƴ Herman van Velze ƴ ƴ Warren Buhai ƴ ƴ Kobus Nell ƴƴ Anwaar Wagner Core Equity Franchise Robin Eagar started his investment career in 1998 working in corporate finance and private equity. At STANLIB he began as an Industrial Analyst, transferring in 2006 to managing general equity funds. Robin has successfully managed Balanced Funds since 2007 and is currently Co-Head of the Multi-Asset Franchise. Herman van Velze joined STANLIB in 1995 as a research analyst. Since then he has held the positions of Head of Research, Portfolio Manager, Head of Balanced Funds and he is currently the Head of Investments and a member of STANLIB s executive committee. As part of the executive committee, Herman oversees all STANLIB s investment activities in STANLIB s multi-specialist model. Herman chairs the both the investment executive committee and the franchise oversight committee meetings. The franchise oversight committee assesses Franchise philosophy, processes, and risk limits. Following five years in corporate finance at Standard Bank, Warren Buhai joined STANLIB in 2005 where he initially specialised in resources analysis and portfolio management. He has been a portfolio manager in the Multi-Asset Franchise since Kobus Nell joined STANLIB in 2003 on completion of his accountancy articles in the Unit Trust pricing department and Corporate Actions and Confirmations. He joined the Unconstrained Equity Franchise as a research analyst and assistant portfolio manager in He also specialises in the Resources sector research and has been managing the STANLIB Gold and Precious Metals Fund (now merged with the STANLIB Resources Fund) since He is a PricewaterhouseCoopers-trained chartered accountant, and is also a CFA charter holder. Anwaar Wagner joined STANLIB in 2015 as a Portfolio Manager in the Multi-Asset Franchise, with 17 years of investment management experience including five years of International investing. He previously worked at Old Mutual Global Emerging Markets(GEM) boutique as the Portfolio Manager of the GEM Fund. Prior to that, he worked as Head of Basic Materials, Equity Analyst and Portfolio Manager for the Old Mutual Resources Fund. His passion and wealth of industry experience has seen him bag three Raging Bull Awards and S&P Micropal Awards. Anwaar started out as a Trainee Analyst at Oasis Management before moving to Metropolitan Asset Managers in He holds a Bachelor of Business Science from the University of Cape Town and is Registered Person with the South African Institute of Financial Markets (SAIFM). 14

19 STANLIB Equity Fund The STANLIB Equity Fund is a general equity fund that aims to outperform its composite benchmark over time. The fund uses a bottom-up stock-picking approach and can invest in both local and offshore equities. The fund has a mandate that is not restricted to any specific investment style. Investments are focused around companies that are housed within the fund s benchmark, with offshore being limited to a maximum of 20% of the fund. Who should invest? The fund is targeted at investors: Aiming to achieve capital growth with a time horizon of five years or more to invest Who want a single equity fund for local and offshore equities Who prefer an equity mandate that is not restricted to a specific investment style Fund update Quarter Fund review The STANLIB Equity Fund increased by 1.6% over the past quarter ended 31 March 2016, but underperformed its benchmark by 4.3%. The 5-year rolling performance remains good, outperforming the benchmark by 1.7%. Our local market experienced volatile swings in performance during the quarter, falling almost 9% in the first 21 days of 2016 and then rallying more than 16%. The decline can be attributed to negative sentiment around Chinese growth and worries over further devaluation of the Renminbi coming into The initial pullback was reversed by dovish comments from the US Federal Reserve, which saw the investment community reduce its expectation for interest rate hikes in This coupled with enhanced stimulus measures from the European Central Bank (ECB) triggered a risk-on view of the market. The Resources Sector reversed its decline with a 13% bounce in the quarter, although the fundamentals appeared to have little to do with the rally. Financials followed with a 5.4% return, although the rate hiking cycle may limit this, whilst industrials declined by 0.7%, partially on the back of a stronger rand; after last year s huge decline. Global equities rose modestly in the first quarter with the MSCI Emerging Markets (EM) outperforming the Developed Markets. Anglo American gained 67%, but ended at levels seen during the last quarter of Impala Platinum also had a strong recovery of 88% during the period adding to your fund s performance. Gold had a particular strong quarter, contributing favourably to the fund s performance through its holding in Newgold. Being overweight Santam and FirstRand, which both produced good performance in the quarter, impacted the fund favourably. Retail stocks, like Woolworths and Mr Price performed poorly during the quarter but added to the fund s overall performance. Shoprite and Massmart recovered strongly over the same period but being underweight in these counters had a negative impact. Although the recovery of the rand impacted multi-national industrial companies like Naspers, SA Breweries and Richemont negatively, it contributed positively to the fund s overall performance. Steinhoff managed to stage a comeback after their listing on the Frankfurt Stock Exchange and recovered their losses during the previous quarter. Looking ahead We have a bias towards companies that can take advantage of the business cycle stage that we envisage with a strong reference to underlying intrinsic value. We remain cautiously tilted to higher quality multi-national companies that have a long term history of compounding returns over time. Fund information 1 Year ended 31 March 2016 Fund Size R million Fund standard deviation (ann.) Benchmark standard deviation (ann.) Risk profile Aggressive Asset allocation Domestic Equity Domestic Cash Global Equity Performance figures (%) (March 2016) 69.02% 2.38% 28.59% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark FTSE/JSE Shareholders Weighted All Share Index 15

20 STANLIB SA Equity Fund The STANLIB SA Equity Fund is a general equity fund that aims to outperform the JSE Shareholders Weighted Index (SWIX) over time. The fund uses a bottom-up stock-picking approach and can invest only in SA equities. The fund has a mandate that is not restricted to any specific investment style. Holdings are focused around companies that are constituents of the fund s benchmark. Who should invest? The fund is targeted at investors: Aiming to achieve capital growth with a time horizon of five years or more Who want a single equity fund for local equities Who prefer an equity mandate that is not restricted to a specific investment style Fund update Quarter Fund review The STANLIB SA Equity Fund increased by 5.7% over the past quarter ended 31 March 2016, but underperformed its benchmark by 0.2%. Our local market experienced volatile swings in performance during the quarter, falling almost 9% in the first 21 days of 2016 and then rallying more than 16%. The decline can be attributed to negative sentiment around Chinese growth and worries over further devaluation of the Renminbi coming into The initial pullback was reversed by dovish comments from the US Federal Reserve, which saw the investment community reduce its expectation for interest rate hikes in This coupled with enhanced stimulus measures from the European Central Bank (ECB) triggered a risk-on view of the market. The Resources Sector reversed its decline with a 13% bounce in the quarter, although the fundamentals appeared to have little to do with the rally. Financials followed with a 5.4% return, although the rate hiking cycle may limit this, whilst industrials declined by 0.7%, partially on the back of a stronger rand; after last year s huge decline. Anglo American gained 67%, but ended at levels seen during the last quarter of Impala Platinum also had a strong recovery of 88% during the period adding to the fund s performance. Gold had a particular strong quarter, contributing favourably to the fund s performance through its holding in Newgold. Being overweight Santam and FirstRand, which both produced good performance in the quarter, impacted the fund favourably. Pressure on the SA consumer is expected to intensify towards the latter part of the year. Retail stocks, like Woolworths and Mr Price performed poorly during the quarter but added to the funds overall performance. Shoprite and Massmart recovered strongly over the same period but being underweight in these counters had a negative impact. Although the recovery of the rand impacted multinational industrial companies like Naspers, SA Breweries and Richemont negatively, it contributed positively to the fund s overall performance. Steinhoff managed to stage a comeback after their listing on the Frankfurt Stock Exchange and recovered their losses during the previous quarter. Looking ahead We have a bias towards companies that can take advantage of the business cycle stage that we envisage with a strong reference to underlying intrinsic value. We remain cautiously tilted to higher quality multi-national companies that have a long term history of compounding returns over time. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) Benchmark standard deviation (ann.) Risk profile Aggressive Asset allocation Domestic Equity Domestic Cash Performance figures (%) (March 2016) 96.93% 3.07% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark FTSE/JSE Shareholders Weighted All Share Index 16

21 ƴƴ Henk Viljoen ƴƴ Victor Mphaphuli Fixed Interest Franchise After gaining early experience in the Treasury environment at Telkom and at Senbank, Henk Viljoen joined the then Liberty Asset Management in 1990, and was appointed Head of Fixed Income. Henk retained this role throughout the amalgamation with Standard Corporate and Merchant Bank that formed STANLIB, and for many years led a multi-award-winning team which built an undisputed reputation as the most astute and consistently successful Bonds/Fixed Income unit in the South African industry. In 2008, Henk handed over responsibility for the day-to-day management of all third-party, life asset and retail bond funds. He retained executive responsibility as Head of Fixed Income Franchise and Chairman of the Interest Rate Committee the key macro factor forum that determines the duration positioning of STANLIB s fixed income mandates. He now jointly manages the franchise with Victor Mphaphuli. Victor Mphaphuli is a key member of STANLIB s multi-award-winning Fixed Interest Franchise, which is also one of the largest in South Africa with assets under management totalling R165 billion. Victor is one of the top fixed income fund managers in the country and has won ABSIP Awards for Fund Management as well as Raging Bull Awards. He initially joined the Franchise as a bond dealer and later assumed added responsibility for portfolio management. He was promoted to Head of Bond and Income Funds in 2008, assuming full responsibility for the daily management of these funds. In 2016 Victor was promoted to Co-Head of the Fixed Interest Franchise which he jointly manages with Henk Viljoen. Victor began his financial services career as a trainee foreign currency dealer with Standard Bank s Treasury Division in After gaining experience as a bond market dealer with Nedbank Investment Bank, he joined STANLIB s forerunner Liberty Asset Management in

22 STANLIB Aggressive Income Fund The STANLIB Aggressive Income Fund aims to provide investors with a high level of income in addition to capital growth over the longer term. The fund offers flexible exposure to property, bonds and money market instruments through different economic environments. The fund is a more aggressive solution than the STANLIB Flexible Income Fund, allowing for a maximum property exposure of 50%. The fund has no duration limit. Who should invest? The fund is targeted at investors who: Would like to achieve a high level of income and the potential for capital growth Seek elements of both fixed instruments and property in a well diversified portfolio Prefer one actively managed solution for all their fixed interest needs Fund update Quarter Fund review The fund s size remained unchanged at R2.4 billion during the first quarter of The fund s modified duration was increased from 0.6 year to 0.9 years, still a defensive positioning in the face of increased volatility and the threat of further interest rate hikes by the South African Reserve Bank (SARB). The fund s exposure to listed property has increased as property instruments performed better during the quarter. Looking ahead The bond market kicked off the year with a very volatile tone, tracking the local currency movements which were marred by a global risk-off environment and local political developments. The risk-off environment was created by developments in China, where the equity markets plummeted, which negatively affected Emerging Market (EM) assets. The All Bond Index, however, returned an impressive 6.55% for the quarter driven by solid returns of 4.57% in January. The South African 10 year bond opened the quarter and year at 9.76%, traded firmer for most of the quarter to close at 9.10%. The firm performance was largely due to the bond market following the currency stronger, due to improved global risk appetite and decisive action from the SARB and the National Treasury, which was well received by the markets. The rand was volatile, opening the year at R15.50 to the US dollar, weakening to an intra quarter closing low of R16.92 in January and recovering to close the quarter at R14.76 to the US dollar. The SARB responded to this currency weakness and worsening inflation outlook by increasing the repo rate by a total of 75 basis points at their first two meetings of the year. March Consumer Price Index (CPI) printed above expectations at 7.0%, largely due to food inflation caused by the drought the country is experiencing. The Finance Minister tabled the 2016/2017 National Budget in February, which highlighted the need for fiscal discipline while also acknowledging that the private sector needs to play a greater role in the economy and work with the government to avoid any further credit rating downgrades. Overall, it was a positive budget for bonds and sovereign ratings, with foreign investors and international credit rating agencies welcoming the Finance Minister s intention to reduce fiscal deficit and contain government debt. We saw positive net investments of R16.6 billion by foreign investors into the bond market during the first quarter of In international markets, the European Central Bank (ECB) announced new measures to stimulate growth and inflation in the region. They cut interest rates, which pushed their deposit rate further into negative territory, and extended their Quantitative Easing (QE) program by EUR20 billion to EUR80 billion per month. The US Federal Reserve kept rates on hold at their two meetings, citing global markets volatility and worsening world economic outlook. These dovish actions and sentiment from Developed Markets central banks revived the carry trade and risky assets. EM s benefitted immensely during the quarter. Upside risks to inflation still remain as a result of the weak currency, the drought that the country experienced and sharp petrol price increases. The SARB is expected to react further by increasing the repo rate to contain inflation. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standarddeviation (ann.) 4.25 Benchmark standard deviation (ann.) 7.12 Modified duration 0.9 years Risk profile Moderate Asset allocation Domestic Property Domestic Bonds Domestic Cash Performance figures (%) (March 2016) 34.71% 56.05% 9.23% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 33.33% FTSE/JSE SA Listed Property Index (SAPY) 33.33% BEASSA All Bond Index 33.33% STeFI Composite Index 18

23 STANLIB Flexible Income Fund (Regulation 28 compliant) The STANLIB Flexible Income Fund is a fixed interest fund that aims to provide income generation and capital growth, targeting outperformance over traditional money market and income funds, by investing in the full spectrum of fixed interest instruments and property. The fund offers investors one solution to manage their fixed interest needs across changing interest rate cycles. The fund has no maturity limitations. Property is limited to a maximum of 10% of the fund. Who should invest? The fund is targeted at investors who: Require a specialist fixed interest fund as part of a diversified portfolio Have a longer term investment horizon than traditional money market income funds Prefer one actively managed solution for all their fixed interest needs Fund update Quarter Fund review The size of the STANLIB Flexible Income Fund was unchanged at R1.1 billion at the end of the first quarter of 2016 compared to the last quarter. The modified duration of the fund was increased from 1.12 years to end the quarter at 1.41 years, in order to capture the value created by the expected decline in bond yields. The fund s exposure to listed property was retained at zero as valuations in the listed property market were expensive. Looking ahead The bond market kicked off the year with a very volatile tone, tracking the local currency movements which were marred by a global risk-off environment and local political developments. The risk-off environment was created by developments in China, where the equity markets plummeted, which negatively affected Emerging Market (EM) assets. The All Bond Index, however, returned an impressive 6.55% for the quarter driven by solid returns of 4.57% in January. The South African 10 year bond opened the quarter and year at 9.76%, traded firmer for most of the quarter to close at 9.10%. The firm performance was largely due to the bond market following the currency stronger, due to improved global risk appetite and decisive action from the South African Reserve Bank (SARB) and the National Treasury, which was well received by the markets. The rand was volatile, opening the year at R15.50 to the US dollar, weakening to an intra quarter closing low of R16.92 in January and recovering to close the quarter at R14.76 to the US dollar. The SARB responded to this currency weakness and worsening inflation outlook by increasing the repo rate by a total of 75 basis points at their first two meetings of the year. March Consumer Price Index (CPI) printed above expectations at 7.0%, largely due to food inflation caused by the drought the country is experiencing. The Finance Minister tabled the 2016/2017 National Budget in February, which highlighted the need for fiscal discipline while also acknowledging that the private sector needs to play a greater role in the economy and work with the government to avoid any further credit rating downgrades. Overall, it was a positive budget for bonds and sovereign ratings, with foreign investors and international credit rating agencies welcoming the Finance Minister s intention to reduce fiscal deficit and contain government debt. We saw positive net investments of R16.6 billion by foreign investors into the bond market during the first quarter of In international markets, the European Central Bank (ECB) announced new measures to stimulate growth and inflation in the region. They cut interest rates, which pushed their deposit rate further into negative territory, and extended their Quantitative Easing (QE) program by EUR20 billion to EUR80 billion per month. The US Federal Reserve kept rates on hold at their two meetings, citing global markets volatility and worsening world economic outlook. These dovish actions and sentiment from Developed Markets central banks revived the carry trade and risky assets. EM s benefitted immensely during the quarter. Upside risks to inflation still remain as a result of the weak currency, the drought that the country experienced and sharp petrol price increases. The SARB is expected to react further by increasing the repo rate to contain inflation. Fund information 1 Year ended 31 March 2016 Fund size R967.9 million Fund standard deviation (ann.) 1.69 Benchmark standard deviation (ann.) 2.70 Modified duration 1.41 years Risk profile Moderately conservative Asset allocation Domestic Bonds Domestic Cash Performance figures (%) (March 2016) 80.60% 19.40% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark BEASSA 1-3 Year Index 19

24 STANLIB Bond Fund The STANLIB Bond Fund is a fixed interest fund that aims to provide income generation and capital growth by investing in longer dated fixed interest securities. The weighted average maturity of this fund must be more than two years. The fund has a higher volatility than money market and traditional income funds, but a lower volatility than an equity fund. Who should invest? The fund is targeted at investors: Who want an optimised total return of capital and income With a moderately conservative risk profile Fund update Quarter Fund review The size of the STANLIB Bond Fund was R3.8 billion at the end of the first quarter of 2016 compared to R3.6 billion at the end of the fourth quarter of The fund s modified duration was increased from 6.55 years to 6.90 years during the quarter as bond yields were oversold following the volatility seen in December The increase in duration was achieved by increasing the weight in the 12+ area of the benchmark. The yield curve flattened during the quarter, as the short end responded to increases in the repo rate while the long end benefited from an improved currency and the reduction in global volatility. The yield gap between the R203 maturing 2017 and the R186 maturing 2026 declined from 124 basis points to end the quarter at 110 basis points. The fund retained the overweight position in credit. Looking ahead The bond market kicked off the year with a very volatile tone, tracking the local currency movements which were marred by a global risk-off environment and local political developments. The risk-off environment was created by developments in China, where the equity markets plummeted, which negatively affected Emerging Market (EM) assets. The All Bond Index, however, returned an impressive 6.55% for the quarter driven by solid returns of 4.57% in January. The South African 10 year bond opened the quarter and year at 9.76%, traded firmer for most of the quarter to close at 9.10%. The firm performance was largely due to the bond market following the currency stronger, due to improved global risk appetite and decisive action from the South African Reserve Bank (SARB) and the National Treasury, which was well received by the markets. The rand was volatile, opening the year at R15.50 to the US dollar, weakening to an intra quarter closing low of R16.92 in January and recovering to close the quarter at R14.76 to the US dollar. The SARB responded to this currency weakness and worsening inflation outlook by increasing the repo rate by a total of 75 basis points at their first two meetings of the year. March Consumer Price Index (CPI) printed above expectations at 7.0%, largely due to food inflation caused by the drought the country is experiencing. The Finance Minister tabled the 2016/2017 National Budget in February, which highlighted the need for fiscal discipline while also acknowledging that the private sector needs to play a greater role in the economy and work with the government to avoid any further credit rating downgrades. Overall, it was a positive budget for bonds and sovereign ratings, with foreign investors and international credit rating agencies welcoming the Finance Minister s intention to reduce fiscal deficit and contain government debt. We saw positive net investments of R16.6 billion by foreign investors into the bond market during the first quarter of In international markets, the European Central Bank (ECB) announced new measures to stimulate growth and inflation in the region. They cut interest rates, which pushed their deposit rate further into negative territory, and extended their Quantitative Easing (QE) program by EUR20 billion to EUR80 billion per month. The US Federal Reserve kept rates on hold at their two meetings, citing global markets volatility and worsening world economic outlook. These dovish actions and sentiment from Developed Markets central banks revived the carry trade and risky assets. EM s benefitted immensely during the quarter. Upside risks to inflation still remain as a result of the weak currency, the drought that the country experienced and sharp petrol price increases. The SARB is expected to react further by increasing the repo rate to contain inflation. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) 8.97 Benchmark standard deviation (ann.) 9.20 Modified duration 6.90 years Risk profile Moderately conservative Asset allocation Domestic Bonds Domestic Cash Performance figures (%) (March 2016) 97.20% 2.80% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark BEASSA All Bond Index 20

25 STANLIB Income Fund The STANLIB Income Fund is a fixed interest fund that aims to provide a reasonable level of income as well as capital stability. The fund invests in high-yielding South African fixed interest assets including government and corporate bonds, fixed deposits and money market instruments. The weighted average maturity of this fund may not exceed two years. Who should invest? The fund is targeted at investors requiring: A regular quarterly income that aims to generate returns above money market over a two to three year period A traditional low risk income fund Fund update Quarter Fund review During the first quarter of 2016, the size of the STANLIB Income Fund increased from R20.82 billion to R21.43 billion. Returns in the fund look attractive compared to money market returns despite the defensive positioning, due to investments in high yielding securities. The modified duration of the portfolio was increased from 0.15 years to 0.22 years by introducing some fixed rate bonds. The higher concentration to floating rate notes was slightly decreased leading to an increase in the duration of the fund. Looking ahead The bond market kicked off the year with a very volatile tone, tracking the local currency movements which were marred by a global risk-off environment and local political developments. The risk-off environment was created by developments in China, where the equity markets plummeted, which negatively affected Emerging Market (EM) assets. The All Bond Index, however, returned an impressive 6.55% for the quarter driven by solid returns of 4.57% in January. The South African 10 year bond opened the quarter and year at 9.76%, traded firmer for most of the quarter to close at 9.10%. The firm performance was largely due to the bond market following the currency stronger, due to improved global risk appetite and decisive action from the South African Reserve Bank (SARB) and the National Treasury, which was well received by the markets. The rand was volatile, opening the year at R15.50 to the US dollar, weakening to an intra quarter closing low of R16.92 in January and recovering to close the quarter at R14.76 to the US dollar. The SARB responded to this currency weakness and worsening inflation outlook by increasing the repo rate by a total of 75 basis points at their first two meetings of the year. March Consumer Price Index (CPI) printed above expectations at 7.0%, largely due to food inflation caused by the drought the country is experiencing. The Finance Minister tabled the 2016/2017 National Budget in February, which highlighted the need for fiscal discipline while also acknowledging that the private sector needs to play a greater role in the economy and work with the government to avoid any further credit rating downgrades. Overall, it was a positive budget for bonds and sovereign ratings, with foreign investors and international credit rating agencies welcoming the Finance Minister s intention to reduce fiscal deficit and contain government debt. We saw positive net investments of R16.6 billion by foreign investors into the bond market during the first quarter of In international markets, the European Central Bank (ECB) announced new measures to stimulate growth and inflation in the region. They cut interest rates, which pushed their deposit rate further into negative territory, and extended their Quantitative Easing (QE) program by EUR20 billion to EUR80 billion per month. The US Federal Reserve kept rates on hold at their two meetings, citing global markets volatility and worsening world economic outlook. These dovish actions and sentiment from Developed Markets central banks revived the carry trade and risky assets. EM s benefitted immensely during the quarter. Upside risks to inflation still remain as a result of the weak currency, the drought that the country experienced and sharp petrol price increases. The SARB is expected to react further by increasing the repo rate to contain inflation. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) 0.21 Benchmark standard deviation (ann.) 0.07 Modified duration 0.22 years Risk profile Conservative Asset allocation Domestic Bonds Domestic Cash Performance figures (%) (March 2016) 84.00% 16.00% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark STeFI Composite Index 21

26 ƴƴ Keillen Ndlovu Listed Property Franchise Keillen Ndlovu started his property career in 2004 at Standard Bank Properties working on the Leveraged Listed Property Product and partly doing listed property research. In 2005, Keillen became a full-time listed property analyst after an inter-group move to STANLIB. He took on more responsibility and assisted with managing of listed property funds in October He became co-head of STANLIB Property Fund and a full-time manager in He was appointed Head of Listed Property Franchise in Since joining the group, Keillen has been part of a successful and consistent investment philosophy and process that has led to the property team winning numerous awards. He currently manages about R30 billion * of listed property funds. * As at 31 March

27 STANLIB Property Income Fund The STANLIB Property Income Fund invests in listed property shares and aims to provide a high level of income in addition to capital growth over time. The fund uses proprietary research to identify investment opportunities that aim to achieve superior long term risk-adjusted returns. The fund aims to be fully invested in property at all times. Who should invest? The fund is targeted at investors who: Require a high level of income in addition to capital growth with a time horizon of five years to invest Want to include property as part of their diversified portfolio Fund update Quarter Fund review The fund underperformed the benchmark by 1.07% during the quarter, delivering a gross total return of 9.02% versus the benchmark return of 10.10%. The top detractor to fund performance was the large underweight position in Resilient. The stock had outperformed market peers significantly as its year-end results had exceeded market expectations. We continue to find Resilient excessively overvalued (3.9% yield vs sector yield of 6.6%) and ranked amongst the most expensive property stock globally. The top contributors were the overweight positions in SA Corporate and Arrowhead-A. SA Corporate outperformed on achieving strong distribution growth of 10.8% for its full year. Arrowhead-A converted to a single class of shares which improved its liquidity. Market review Listed property rebounded strongly in the quarter (10.1% total return), outperforming bonds (6.55%), equities (3.87%) and cash (1.68%). The sector recovered on the bond yield strengthening from 9.7% to 9.1% in the quarter and another strong results season. Despite the weak economic backdrop, listed property funds continued to achieve above inflation like-for-like net property income growth of ±6%. Fixed leases with annual escalations have provided short to medium-term protection against the economic downturn but some pressure on rental growth is expected in the medium to long-term if economic growth remains subdued. This explains why listed property companies are venturing offshore in search for growth. Offshore earnings now comprise 38% of total earnings generated by the sector and 54% for the total universe of JSE-listed property stocks. We remain cautious against chasing offshore-dominant counters purely on a randhedge basis. Performance of offshore counters may reverse rapidly as it did in the quarter given the recent rand strength. Furthermore, the majority of offshore property acquisitions are of a secondary nature and transacted on a fully priced basis. income growth slows down to 6% - 7%. Listed property currently offers a forward yield of 6.6% which is below the 10-year bond yield (9.1%) and cash (8.5%). Over the next 12 months, we expect listed property to deliver a total annualised return of 2.2% in our base case, 7.6% in our bull case and -2.6% in our bear case. This is based on the assumption that bond yields are 9.50%, 9.0% and 10.00% respectively. The biggest risk facing the sector is downside risks to the bond yield given the potential credit downgrade and rising inflation. Fund information 1 Year ended 31 March 2016 Fund size R million Fund standard deviation (ann.) Benchmark standard deviation (ann.) Risk profile Aggressive Asset allocation Domestic Property Domestic Cash Performance figures (%) (March 2016) 98.07% 1.93% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark FTSE/JSE SA Listed Property Index Looking ahead Looking ahead, we are expecting income growth of 10% over the next 12 months. This has been largely boosted by increased offshore earnings. Excluding offshore earnings, 23

28 STANLIB Global Property Feeder Fund The STANLIB Global Property Feeder Fund adopts a bottomup approach to stock selection. The investment process is very research intensive, based on thorough analysis of companies assets, the quality of their property tenants, the track record of their management team and the environment in which they operate. Emphasis is placed on holdings with high-quality rental returns. Who should invest? The fund is targeted at investors seeking: Exposure to international property markets Exposure to different sectors of the property market Currency diversification Fund update Quarter Market review After a volatile start to the year, Real Estate Investment Trusts (REITs) in developed markets rallied more than 15% from the lows in the quarter after global sentiment changed in the middle of February and credit spreads tightened back to levels seen at the end of REITs in developed markets returned about 6.7% total return in USD (1.2 % in ZAR) for the first quarter of The best performing regions was Canada, Japan and Australia. The UK performed the worst, weighed down by uncertainty around the outcome of the European Union (EU) referendum to be held later this year. Hong Kong REITs staged a strong rally in March after a reprieve from the US Federal Reserve pushing out further rate hikes in the US. Retail sales in Hong Kong remains weak and economic growth is expected to slow. The Singapore office market is still under pressure from weak demand and expected new supply. In the US, the office sector was the worst performing due to perceived concerns around the New York City office market and specialty sectors such as data centers, storage and student housing outperformed. Japan listed property performed very well after unexpected Quantitative Easing (QE) by the Bank of Japan. Listed property in all the regions outperformed their respective domestic equity markets, except for Hong Kong and the UK. Fund review The global property portfolio underperformed the benchmark during the quarter. The US had the biggest negative attribution, mostly due to the overweight position in SL Green Realty Corporation, which has big exposure to the New York City office market, and the underweight position in Realty Income Corporation. The overweight allocation to the UK also detracted from portfolio relative return. The portfolio will remain overweight to the New York Office market as there is no solid evidence yet of an entrenched slowdown in that market. Looking ahead Overall property fundamentals in the US and UK is still good, underpinned by healthy demand and manageable new supply across sectors. There is a risk that the UK will vote to exit the EU which could cause severe volatility for the region. A UK exit is not the most likely outcome and UK REITs can be expected to re-rate strongly after the vote, all else remaining equal. Higher interest rates may negatively impact the ability of commercial real estate owners to roll-over maturing debt. Elevated levels of commercial mortgage debt will mature in 2016 and 2017 in the US. Property values in general may be re-priced lower if the availability of debt decrease. Listed REITs have better access to capital and a bias to better quality assets but will not be immune to any debt induced volatility. According to UBS Research global REITs are currently trading at 7% premium to NAV (net asset value). The portfolio has an implied dividend yield of about 3.8%. Fund information 1 Year ended 31 March 2016 Fund size Fund standard deviation (ann.) Benchmark standard deviation (ann.) Risk Profile Asset allocation R million Aggressive Global Property Global Cash Performance figures (%) (March 2016) 98.53% 1.47% Quarter 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark S&P Developed REIT Index 24

29 Global Solutions STANLIB Global Equity Feeder Fund ƴƴ Neil Robson The STANLIB Global Equity Feeder Fund is a rand denominated feeder fund which aims to maximise long-term total return. The manager may invest in all global stocks with a market cap of over $1 billion, and average daily volume of at least $5 million. Given the vast investable universe, the manager s research team has standardised the process of analysing each of the companies. When analysing a company, the analyst will take into account each of the following factors: capital management, current valuations compared to the market, share price trends and earnings revisions. The manager s investment process enables them to build portfolios in a highly disciplined and systematic fashion. Who should invest? The fund is targeted at investors: Seeking exposure to growth assets to meet financial needs Seeking exposure to global equity markets Looking to broaden their equity exposure by investing in a wide array of opportunities outside of South Africa Wanting to add offshore diversification benefits to their portfolio Requiring a currency hedge against the rand Fund update Quarter Fund review After delivering an excellent return in the December quarter of +9.9% in dollars (benchmark +5.2%) or +22.8% in rands, the fund s first quarter of 2016 saw a negative return of -3% in dollars (benchmark +0.4%) or -8.1% in rands as the rand strengthened by 5.2% against the dollar. Over the year to end March 2016 the fund did +15.4% in rands, or -4.1% in dollars (benchmark -3.8%). Sector allocation hurt during the quarter, with underweights in energy and materials (including mining) plus an overweight in healthcare and technology (together 39% of the portfolio) hurt relative returns. The portfolio s US return was -1.6%, with the US at 58.8% of the portfolio (benchmark 53.2%). The worst return of the bigger countries came from Japan with -9.1%. Fortunately the portfolio is even more underweight in Japan at 4.7% of portfolio (benchmark 7.5%). By comparison, the Brazilian return was +36%, but is only 0.5% of the portfolio. The Fund Manager Columbia Threadneedle Investments is still overweight in Emerging Markets (EM) at 11.2% of portfolio versus 10.2% for benchmark (10.5% at end September). Shares in China comprise most of this, followed by shares in Mexico. Europe excluding the UK is now slightly overweight at 16.1% (benchmark 15.6%). Alphabet, Google s holding company, is the biggest share in the portfolio at 4.4% of portfolio, followed by Amazon.com, Facebook, Gilead Sciences, AON and JP Morgan. Looking ahead The Fund Manager, Columbia Threadneedle Investments in London, expects developed stock markets to continue to climb the proverbial wall of worry. They are focusing on company-led growth as they believe economic growth will remain subdued and companies that can deliver consistent growth in this environment will be attractive investments. They also prefer secular-growth companies and high quality franchises, rather than cyclical areas of the market. Asset allocation Domestic Cash Global Equity Performance figures (%) (March 2016) 2.92% 97.08% 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 95% MSCI World Index (USD) 5% STeFI Call Deposit Rate Index 25

30 STANLIB Global Balanced Feeder Fund The STANLIB Global Balanced Feeder Fund s assets are managed in order to minimise risks but at the same time expose the investor to assets within regions that have the most potential. The fund has the second highest equity weighting compared to the other two global solution funds giving it a higher potential for capital growth than the STANLIB Global Balanced Cautious Fund, but at a higher risk rating. Who should invest? The fund is targeted at investors: Seeking capital growth and income derived from global markets Seeking a diversified exposure to global markets and assets Requiring a currency hedge against the rand Fund update Quarter Fund review ƴƴ Alex Lyle After a superb December quarter when the fund did +19.3% in rands and +6.6% in dollars (beating the benchmark s 3.3%) in the first quarter of 2016 the fund did -6.8% in rands or -1.6% in dollars (benchmark +2.2%), as the rand gained 5.2% against the dollar. Over the 12 months to end December the fund did +17.1% in rands and -3% in dollars (benchmark -0.8%). The fund has been managed by Columbia Threadneedle Investments of London since early The equity portion of the fund (lower at 61.7% at end March) is identical to the STANLIB Global Equity Fund portfolio, which had a difficult quarter, but a good 12 months to end March. The equity portion of the fund did -2% in dollars in the quarter, the worst return of the four asset classes. Sector allocation hurt during the quarter, with underweights in energy and materials (including mining) plus an overweight in healthcare and technology (together 39% of the portfolio) hurting relative returns. During the quarter to end March, fixed interest did best with a return of +4.9% in dollars (9.9% of fund versus 20% for the benchmark and down from 13.5% of fund at end December). So the big underweight in bonds detracted most from relative performance in the quarter. Next best was property s +4.7% dollar return (11.2% of portfolio versus 10% for the benchmark), then the cash return of +1.8% in dollars. The allocation to cash was raised from 12.4% at end December to 17.2% at end March, much higher than the benchmark s 10%. Looking ahead Stock and property markets corrected sharply in the first six weeks of 2016, finally bottoming on 11 February. Since then markets have rallied quite strongly, recouping most of the losses. Columbia Threadneedle Investments thinks developed stock markets will continue to climb the proverbial wall of worry. The fund manager continues to believe that economic growth will remain challenged in 2016 and prefers to focus on shares that deliver consistent growth and attractive dividends. However, volatility is expected to remain a key feature. Asset allocation Domestic Cash Global Equity Global Property Global Bond Global Cash Performance figures (%) (March 2016) 3.22% 59.72% 10.83% 9.60% 16.62% 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 60% MSCI AC World Index 20% Barclays Global Aggregate Bond Index 10% S&P Developed REIT Index 5% LIBID USD 1m 2.5% LIBID GBP 1m 2.5% LIBID EUR 1m Index 26

31 STANLIB Global Balanced Cautious Feeder Fund The STANLIB Global Balanced Cautious Feeder Fund is managed on a cautious basis with a main objective of long term growth in capital and income. The fund has the lowest weighting in equities compared to the other two global solution funds, offering the investor a more conservative level of capital growth than would otherwise be expected from a fund with a higher equity component. Who should invest? The fund is targeted at investors: ƴƴ Alex Lyle Seeking a conservative level of capital growth and income Seeking diversified exposure to global markets and assets Requiring a currency hedge against the rand at 21.6% of portfolio from 32.4% at end December and very underweight the benchmark s 40% of portfolio) which returned +4.8% in the quarter in dollars. So the underweight in fixed interest hurt the relative return most. Cash chipped in with a 2% dollar return. The allocation to cash is 35.7% at end March, much higher than the 24.3% at end December and the benchmark s 20% allocation. Looking ahead Stock and property markets corrected sharply in the first six weeks of 2016, finally bottoming on 11 February. Since then markets have rallied quite strongly, recouping most of the losses. Columbia Threadneedle Investments thinks developed stock markets will continue to climb the proverbial wall of worry. The fund manager continues to believe that economic growth will remain challenged in 2016 and prefers to focus on shares that deliver consistent growth and attractive dividends. However, volatility is expected to remain a key feature. Asset allocation Domestic Cash Global Equity Global Property Global Bonds Global Cash 6.12% 29.77% 10.40% 20.24% 33.48% Fund update Quarter Fund review After a stellar December quarter when the fund returned +15% in rands or +2.8% in dollars (beating the benchmark s 1.45%) the first quarter of 2016 proved a lot tougher, with a rand return of -4.9% (the dollar lost 5.2% to the rand) and a dollar return of +0.3% - at least still positive. Over the 12 months to end March the fund did +19.5% in rands and -1.1% in dollars. The fund has been managed by Columbia Threadneedle Investments of London since early The equity portion of the fund (31.7% at the end of March, down from 32.6% at end December) is identical to the STANLIB Global Equity Fund portfolio, which had a difficult quarter, but a good 12 months to end March. The equity portion of the fund did -2% in dollars in the quarter, the worst return of the four asset classes. Sector allocation hurt during the quarter, with underweights in energy and materials (including mining) plus an overweight in healthcare and technology (together 39% of the portfolio) hurting relative returns. The property portion of the fund (overweight at 11.1% of portfolio) did best with a return of +4.9% in dollars in the quarter. Next was the fixed interest portion (down Performance figures (%) (March 2016) 1 Year 3 Years 5 Years Fund Benchmark Source: Morningstar Fund benchmark 40% Barclays Global Aggregate Bond Index 30% MSCI AC World Index 10% S&P Developed REIT Index 10% LIBID USD 1m 5% LIBID GBP 1m 5% LIBID EUR 1m 27

32 A broad investment offering designed to deliver our investment promise to clients. 28