Absa Fund Managers. Abridged Annual Report. 1 Absa Fund Managers 2017

Transcription

1 Absa Managers Abridged Annual eport Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 1 Absa Managers 2017 For the period ended 31 December 2016

2 Introduction Contents Introduction to this report This annual review and summary financial statement has been compiled and covers select products in our Absa Unit Trust s investment range to provide stakeholders with relevant financial and nonfinancial information. The summary annual financial statements have been approved by the board of directors of the group. This document provides a summary of the information contained in the 2016 integrated annual report and does not contain sufficient information to allow for a complete understanding of the results and state of affairs of the group as would be provided by the full annual report. For further information consult the full annual financial statements, the unqualified auditor s report on those annual financial statements and the directors report. Contents 4. eport from the Head of Absa Managers 6. Our franchise model 7. Our team 9. eport from the Trustee for the Absa unit trust team 10. isk eturn Profiles 12. Collective Investment Portfolios 12 Absa Absolute 13 Absa Africa Equity Feeder 14 Absa Balanced 15 Absa Bond 16 Absa Large Cap 17 Absa Money Market 18 Absa Equity 19 Absa Smart Alpha Income 20 Absa Multi Bond 21 Absa Smart Alpha Equity 22. Our full range at a glance 26. Abridged financial statements 48. Company information 49. Legal notes 50. Contact details Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 2 Absa Managers 2017 Abridged Annual eport 3

3 eport from the Head of Absa Managers eport from the Head of Absa Managers eport from the Head of Absa Managers The year was extremely volatile for financial markets with a number of unpredictable and surprising events shaping the course of On the global stage the surprise Brexit vote of the people in favour of leaving the Eurozone left many market commentators shocked. Later in the year the US elections surprised us again with Donald Trump winning the Electoral College vote to become the president of the United States of America. On the home front Our local economy was also not immune to some shocks in 2016 with the constant threat of international ratings agencies downgrading the outlook of SA and the political landscape in a state of flux. The FTSE/JSE ALSI saw almost half of the country s 40 biggest companies lose share value over the period. In the face of this kind of volatility an investment manager s job is to remain rational and to help their clients navigate markets during testing times. There were a number of developments at Absa Managers over the preceding year that shaped our business and added to our stable of solutions for our clients. The traction of our franchise model was evident with some star performers in the stable. The Absa Equity was awarded a aging Bull certificate in two categories, outperforming its peer group for the third year running. This fund has delivered 17.74% per annum to investors over the last 10 years and was the top performing fund in its category since its inception in August The MultiManagement team was recognised at the Morningstar award ceremony, with the Absa Multi Bond winning the fund category award for the best bond fund. Over five years this is the top performing fund in its category having outperformed the benchmark and its peers by more than 1% per annum. The Absa Africa Equity Feeder increased its reach by registering on the UCITS platform, allowing additional investors access to the fund from around the world. This fund gives investors exposure to securities across the African continent as well as equities that may be listed and/or traded in recognised exchanges outside of Africa. In these volatile times however, we occasionally get a stark reminder that equity investing is a longterm imperative. The Absa Absolute had a trying year, and solid returns from domestic assets were offset by negative returns from assets denominated in foreign currencies, particularly Sterling. Over the year Sterling fell by a massive and unexpected 35.0%, while the US Dollar fell by 12.9% against the and, which impacted heavily on the fund returns. We remain cautious in the fund given the risks we see. When the investment environment remains stressed our priority is always to protect our clients money, and to achieve a satisfactory return over a rolling threeyear period. Our collaboration with Schroders strengthened our client offering by providing additional options across new geographies for our clients. Schroders stated objective is that asset management is their only business and their goal is the creation of longterm value to assist them in meeting their clients future financial requirements, which closely aligns with our businesses philosophy. There are plenty of exciting new developments happening in the business with a wide array of building blocks within all the asset classes (equity, fixed interest, property, commodities, credit, local, offshore) being developed. We believe that the active asset management industry is evolving to include a focus on a low cost environment which will eventually be the measure of the true valueadd of asset managers. Looking ahead An important strength of our investment offering is that it provides for multiple strategies that play to the strengths of a variety of portfolio managers, investment styles and outcomes. Not only does this allow for a diversity of investment options to be offered, but it facilitates relative success in all market conditions. We hope you find this publication useful and we look forward to sharing our journey with you. Sylvester Kgatla Head: Absa Managers Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 4 Absa Managers 2017 Abridged Annual eport 5

4 Our Franchise Model Our team Errol Shear Chief Investment Strategist & Head: Absolute eturn Franchise Absa Asset Management Eben Mare Head: Absa Fixed Interest Franchise Absa Asset Management Kurt Benn Head: Absa Balanced Franchise Absa Asset Management Our team Our Franchise Model Absa Asset Management operates a franchise model, made up of six individual franchises. These franchises support each other in research and idea generation, however each individual franchise applies the overarching investment philosophy in a way that assists them in achieving their goals. Balanced Targeted return Fixed interest Pan African Equity Errol has many years of experience in the industry. He completed his articles at Ernst & Young and joined Liberty Asset Management (Libam) in 1985; and in the ensuing years occupied many senior roles before joining Absa in May 2006 as Chief Investment Officer. Errol has a BBusSc (Finance)(Hons) degree, as well as the designations of CA(SA) and CFA. Eben joined Absa Asset Management in January 2016 as Head of the Fixed Interest franchise. Previously Eben was responsible for managing approximately 10bn absolute return assets with CPI+3/4/5/6 mandates and has held a number of senior positions in the financial markets over the past 26 years. Eben holds a PhD in Applied Mathematics and does active research in his spare time. Fayyaz Mottiar Head: Absa Franchise Absa Asset Management Fayyaz joined Absa in 2007 after many years of experience in the industry including time as an Equity Derivatives Trader and Fixed Interest Dealer and Portfolio Manager. He moved into Absa Asset Management in 2011 and continues to focus on listed property investments. Fayyaz has a Bachelor of Economic Science degree from the University of Witwatersrand and is a CFA charter holder. Kurt joined Absa Asset Managers in August 2015 and is the Head of the Balanced franchise. His 19 years of experience prior to joining Absa, includes senior analytical and portfolio management positions at several respected investment management companies. Kurt holds the qualifications of BBusSc, BCom (Hons) and CFA. Stephen Arthur Head: Absa Equity Franchise Absa Asset Management Stephen joined Absa Capital in 2003 as an Investment Banker, and held positions in Corporate Finance and Private Equity. With more than 20 years of investment and asset management experience, his career has included positions as an Equity Analyst and Portfolio Manager, managing a number of unit trusts and pension fund portfolios. Stephen s qualifications include a BSc Eng (Mining) and he is a CFA charter holder. Godfrey P. Mwanza Head: Absa PanAfrica Franchise Absa Asset Management Godfrey heads up the Absa PanAfrica franchise utilising his extensive experience working in African capital markets. He began his career in corporate finance in Zambia where he played a key role in pioneering corporate transactions in that country. He joined Absa Asset Management in April 2014 and together with his team runs the Absa African Equity Feeder. Godfrey has a Bachelor of Science degree in Economics from the London School of Economics and Political Science and is a CFA charter holder. Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 6 Absa Managers 2017 Abridged Annual eport 7

5 eport from the Trustee for the Absa unit trust scheme eport from the Trustee for the Absa unit trust scheme eport from the Trustee for the Absa unit trust scheme eport from the Trustee for the Absa unit trust scheme 31 January 2017 Compliance report of the Trustee Société Générale Johannesburg Branch We, Société Générale, in our capacity as trustee of the ABSA Unit Trust Scheme (the Scheme ) have prepared a report in terms of Section 70(1)(f) of the Collective Investment Schemes Control Act, 45 of 2002 ( the Act ), for the period 01 January 2016 up to and including 31 December 2016 ( the eport ). Having fulfilled our duties as required by the Act, we confirm that the Manager of the Scheme has in general administered the Scheme: i. within the limitations on the investment and borrowing powers of the manager imposed by the Act, and ii. in accordance with the provisions of the Act and the trust deeds. With some exceptions the report is available from us and/or ABSA Managers ( the Manager ). JeanLouis Bernardo Managing Director Hilda de Villiers Head of Securities Banking Operations JHB Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 8 Absa Managers 2017 Abridged Annual eport 9

6 isk eturn Profiles isk eturn Profiles isk eturn Profiles The isk eturn Profile highlights the expected investment returns of Absa s fund offerings against the expected investment risk/horizon. Interest Bearing ange Equity ange Expected Investment eturns (%) Absa Smart Alpha Income Absa Income Enhancer Absa Core Income Absa Flexible Income Absa Opportunity Income FoF Absa InflationLinked Income Absa Bond Absa Multi Bond Expected Investment eturns (%) Absa Large Cap Absa SA Core Equity Absa Equity Absa Smart Alpha Equity Absa Smart Alpha Absa Select Equity Absa Multi Equity Absa Money Market Low Expected Investment isk / Horizon High Low Expected Investment isk / Horizon High Multi Asset ange Offshore ange Absa Expected Investment eturns (%) Absa Multi Creation FoF Absa Balanced Absa Multi Accumulation FoF Absa Flexible Growth Absa Multi Absolute eturn Prudential Absa Absolute Absa Preserver Plus Absa Multi Preservation FoF Absa Smart Alpha Defensive Absa Inflation Beater Absa Multi Protection FoF Absa Prudential FoF Expected Investment eturns (%) Absa Euro Income Absa Sterling Income * Absa US Dollar Income Absa Global Feeder Absa Global Multi Asset Feeder Absa Africa Equity Feeder Absa Global Value Feeder Absa Global Core Equity Feeder Low Expected Investment isk / Horizon High Low Expected Investment isk / Horizon High Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 10 Absa Managers 2017 Abridged Annual eport 11

7 Absa Absolute Absa Africa Equity Feeder Absa Absolute Absa Africa Equity Feeder details isk profile advisable details isk profile advisable Industry category launch date manager Minimum lump sum Minimum monthly SA Multi Asset low equity CPI + 4% P.A. Over a rolling 36 month period 20 November 2006 Errol Shear Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + Industry category launch date manager Minimum lump sum Minimum monthly egional Equity General MSCI Emerging Frontier Markets Africa ex South Africa Index 14 April 2014 Godfrey Mwanza and oy Mutooni Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + objectives and strategy The fund s objective is to provide a consistent positive return above inflation over the medium term, while aiming to protect capital over the longer term, with moderate risk to investors. Lowering the risk of capital loss over any 12 month period is a focus area and a diversified allocation of investments across all classes of assets, as well as lower risk individual assets will be used to lower the risk profile of the fund. Securities to be included in the fund will be nonequity securities, assets in liquid form and equity securities acquired on exchanges. The fund is compliant with egulation 28 of the Pension s Act and is suitable for retirement funds investments. objectives and strategy The fund aims to provide longterm capital growth through exposure to securities of companies which are either domiciled in Africa or are established in another continent but derive a significant proportion of their earnings from African countries. A domestic feeder fund, it consists of exchange rate swaps, assets in liquid form and participatory interest of the Absa Africa Equity ( Master ) which aims to provide longterm capital growth through exposure to African equity securities listed on recognised stock exchanges across the African continent as well as equities that may be listed and/or traded in recognised exchanges outside of Africa. Investment in securities listed in South Africa will be limited to 20% of the Net Asset Value of the Master. performance and statistics Cumulative performance (5 years) performance and statistics Cumulative performance (5 years) 175 Term Class A Sector Average Term Class A Launch Launch Year 5 Year 10 Year Year Dec 12 Dec 13 Absa Absolute CPI + 4% Dec 14 Dec 16 CPI (Headline) The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Asset Allocation at 31 December % 3% 4% 16% 21% 1% 4% 10% Asset Allocation Equity Preference shares Fixed rate bonds Floating rate bonds Inflation linked bonds Money market International equity Nov 14 Jun 15 Absa Africa Equity FF A MSCI EFM Africa Ex South Africa The chart reflects the value (monthly data points) of a 100 investment made on the 14/04/2014 Jan 16 Aug 16 Dec 16 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 12 Absa Managers 2017 Abridged Annual eport 13

8 Absa Balanced Absa Bond Absa Balanced Absa Bond details isk profile advisable details isk profile advisable Industry category launch date Class A launch manager Minimum lump sum Minimum monthly SA Multi asset medium equity CPI + 5% P.A. Over a rolling 60 month period 01 June October 2000 Greg Kettles Kurt Benn objectives and strategy Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + Industry category launch date manager Minimum lump sum Minimum monthly SA Interest bearing Variable term BEASSA All Bond Index 14 May 2002 James Turp objectives and strategy Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + The fund s main objectives are steady growth of income and capital, a reasonable level of current income and the maximum possible stability for capital invested. The fund will use an active asset allocation strategy by investing in selected JSElisted shares, quoted property trusts, bonds, money market and international assets. The fund is managed according to the guidelines as set out in regulation 28 of the Pension s Act and is suitable for retirement funds investments. The Absa Bond is a specialist portfolio in the fixed income funds category whose primary objective is to seek above average income with some capital growth at below average risk to investors. The fund will provide investors with welldiversified exposure to the South African Bond market as well as other interest bearing instruments and will invest primarily in South African bonds, corporate bonds, gilts, fixed deposits and other interestbearing instruments of differing terms to maturity, taking into account changes in interest rates, credit risk and liquidity. performance and statistics Cumulative performance (5 years) performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) 200 Term Class A Sector Average Term Class A Sector Average Launch Launch Year Year Year 10 Year Year 10 Year Dec 12 Dec 13 Absa Balanced A CPI + 5% Dec 14 Dec 15 Dec 16 CPI (Headline) The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Asset Allocation at 31 December % 10% 0% 5% 0% 7% 20% 2% 1% 38% Asset Allocation Equity Preference shares Fixed rate bonds Floating rate bonds Inflation linked bonds Money market International equity International Bonds International Money Markets Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Absa Bond A BEASSA ALBI The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Duration information Modified duration Weighted average duration 67 years 5830 days Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 14 Absa Managers 2017 Abridged Annual eport 15

9 Absa Large Cap Absa Money Market Absa Large Cap Absa Money Market details isk profile advisable details isk profile advisable Industry category launch date Class A launch date manager Minimum lump sum Minimum monthly SA Equity Large Cap FTSE/JSE Top 40 Index 28 September September 2001 Stephen Arthur Dale Hutcheson Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + Industry category launch date manager Minimum lump sum Minimum monthly SA Interest Bearing Money Market STeFI Composite Index 02 May 1997 Juan Bekker, ehana ungasamy Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + objectives and strategy objectives and strategy The Absa Large Cap is in the domestic equity large sector and invests the majority of its assets in the South African investment markets at all times. The majority of the equity securities will be large capitalisation shares from the FTSE/JSE Africa top 40 index. The fund will predominantly invest in securities of an equity nature. Our equity investment process is primarily bottomup stockpicking and valuation focused. The portfolios are managed in line with our pragmatic value investment approach, with the objective of providing real returns to clients. The primary performance objective of the Absa Money Market is to obtain as high level of current income as is consistent with capital preservations and liquidity. Capital gains will be of an incidental nature. The fund aims to achieve this by investing in graded shortterm money market instruments. The fund invests principally in cash, deposits and moneymarket instruments. The fund has a maximum weighted duration of 90 days. performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) 220 Term Class A Sector Average 150 Term Class A Sector Average Launch 3 Year 5 Year 10 Year Launch 3 Year 5 Year 10 Year Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Absa Large Cap A FTSE/JSE Top 40 Index 100 Dec 12 Dec 13 Absa Money Market STeFI Composite Dec 14 Dec 15 Dec 16 Duration information Modified duration Weighted average duration 0,15 years 102 days The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 16 Absa Managers 2017 Abridged Annual eport 17

10 Absa Equity Absa Smart Alpha Income Absa Equity Absa Smart Alpha Income details isk profile advisable details isk profile advisable Industry category launch date Class A launch date Class C1 launch date manager Minimum lump sum Minimum monthly SA eal Estate General FTSE/JSE SA Listed Index 14 August August October 2013 Fayyaz Mottiar objectives and strategy Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + Industry category launch date Class A launch date manager Minimum lump sum Minimum monthly SA Interest Bearing Short Term STeFI Composite Index (the Alexander Forbes Short Term Fixed Income Index plus 2% per annum). 23 April April 2015 Aaron Masina, St John Bunkell objectives and strategy Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + The fund aims to provide investors with income and growth over the medium to longer term at medium to high risk, predominantly obtained in the South African listed property market. The majority of its assets will be invested in South African investment markets at all times and will predominantly be invested in securities of a property equity nature traded on South African exchanges, participatory interests that derive income and growth of a property nature, as well as nonequity securities. The Absa Smart Alpha Income aims to provide investors with sustainable income and liquidity over the short term with low standard deviation of return. Capital appreciation will be of an incidental nature. The fund will invest in fixed income and assets in liquid form and be exposed to small amounts of market risk in fixed income (nominal and inflation linked government bonds) in order to generate outperformance above assets in liquid form. The fund will have a relatively short duration by investing predominantly in Money Market Instruments (min. 80%) while generating alpha using quantitative asset allocation techniques. performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) 300 Term Class A Sector Average 115 Term Class A Sector Average 260 Launch Launch Year 5 Year 10 Year Months 6 Months 9 Months Dec 12 Dec 13 Dec 14 Dec Sep 15 Feb 16 Jul 16 Dec 16 Absa Equity A FTSE/JSE Listed Index The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Absa Smart Alpha Income A STeFI Composite Absa Smart Alpha Income D The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 18 Absa Managers 2017 Abridged Annual eport 19

11 Absa Multi Bond Absa Smart Alpha Equity Absa Multi Bond Absa Smart Alpha Equity details isk profile advisable details isk profile advisable Industry category launch date manager Minimum lump sum Minimum monthly SA Interest Bearing Variable Term BEASSA Albi Total eturn Index 27 January 2009 Sheetal ama Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + Industry category launch date Class A launch date manager Minimum lump sum Minimum monthly SA Equity General FTSE/JSE Shareholder Weighted Index (SWIX) 23 April October 2015 St John Bunkell MSc Chem.Eng Aaron Masina BCom (Stats), CFA Absa Alternative Asset Management Low Low Medium Medium 3 months + 6 months + 2 years + Medium High High 3 years + 5 years + objectives and strategy objectives and strategy The fund will invest in nonequity securities, assets in liquid form, bonds, fixed deposits and other nonequity securities, with either short, intermediate or long terms to maturity, being nonequity securities or securities purchased through exchanges in South Africa. The fund may invest in foreign assets as permitted by the act and financial instruments as determined by legislation from time to time. The Absa Smart Alpha Equity aims to provide investors with sustainable capital growth over the medium to long term. The fund is a domestic, general equity fund, using a proprietary quantitative process. Securities in the portfolio will move into the large and mid cap segment of the market. The fund will be allowed to invest into securities listed in South Africa on the JSE as well as the equities listed on international exchanges and in accordance with the exchange controls regulation. The fund is a quasipassive fund which invests in securities predominantly through indices whilst generating Alpha using qualitative asset allocation techniques. performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) performance and statistics Cumulative performance (5 years) Performance annualised total returns (%) 175 Term Class A Sector Average 100 Term Class A Sector Average 160 Launch Launch Year 5 Year Month 6 Month 9 Month Dec 12 Dec 13 Dec 14 Dec 15 Dec Sep 15 Feb 16 Jul 16 Dec 16 Absa MM Bond A BEASSA ALBI The chart reflects the value (monthly data points) of a 100 investment made on the 01/01/2012 Absa Smart Alpha Equity A FTSE/JSE All Share SWIX (J403T) Absa Smart Alpha Equity D The chart reflects the value (monthly data points) of a 100 investment made on the 23/04/2015 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 20 Absa Managers 2017 Abridged Annual eport 21

12 Our full range at a glance: Active Management Our full range at a glance: Active Management Our full range at a glance Active Management Strategy FUND NAME Absa Absolute Absa Africa Equity Feeder Absa Balanced Absa Bond Absa Core Income Absa Global Core Equity Feeder Absa Global Multi Asset Feeder Absa Global Feeder Absa Income Enhancer Absa Inflation Beater Absa Inflation Linked Income Absa Flexible Growth Absa Flexible Income Absa Global Value Feeder Absa Absa Money Market BENCHMAK CPI + 4% p.a. over a rolling 36 month period FTSE/JSE All Africa 40 Index CPI + 5% p.a. over a rolling 60 month period BESA All Bond Index JIBA + 0.5% MSCI $ World Index USD 3month LIBO +2% FTSE EPA NAEIT Developed Index STeFI Composite CPI + 3% Composite InflationLinked (CILI) Bond Index CPI + 3% STeFI Composite. MSCI $ World Index CPI + 6% p.a. over a rolling 5 year period STeFI Composite CATEGOY South Africa Multi Asset Low Equity egional Equity General South Africa Multi Asset Medium Equity South Africa Interest Bearing Variable Term Bonds South Africa Interest Bearing Short Term egional Equity General Global Multi Asset Low Equity Global eal Estate General South Africa Interest Bearing Short Term Bonds South Africa Multi Asset Low Equity South Africa Interest Bearing Variable Term South Africa Multi Asset Flexible South Africa Multi Asset Income Global Equity General South Africa Multi Asset High Equity South Africa Interest Bearing Money Market INVESTMENT ACCOUNTS MIN LUMP SUM MIN DEBIT ODE N/A N/A POTFOLIO MANAGE Errol Shear Godfrey Mwanza Greg Kettles James Turp James Turp, Eben Mare Stephen Arthur This fund invests up to 100% in a portfolio that is managed by Schroders Fayyaz Mottia Juan Bekker & ehana ungasamy Errol Shear James Turp, Eben Mare Greg Kettles James Turp This fund invests up to 100% in a portfolio that is managed by Schroders Greg Kettles Juan Bekker & ehana ungasamy INCOME DISTIBUTIONS 15 April, 15 July, 15 October & 15 April, 15 July, 15 October & January 15 April,15 July, 15 October & January 15 April, 15 July, 15 October & 15 April, 15 July, 15 October & 15 April,15 July, 15 October & Monthly January Monthly Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 22 Absa Managers 2017 Abridged Annual eport 23

13 Our full range at a glance: MultiManagement Strategy s Our full range at a glance: Alternative Strategy s Active Management Strategy cont. MultiManagement Strategy s Alternative Strategy s FUND NAME Absa Equity Absa Large Cap Absa Select Equity Absa SA Core Equity Absa Multi Bond Absa Multi Protection of s Absa Multi Preservation of s Absa Multi Accumulation of s Absa Multi Creation of s Absa Opportunity Income of s Absa Prudential of s Absa Smart Alpha Income Absa Smart Alpha Flexible Balanced Absa Smart Alpha Equity Absa Smart Alpha Absa Preserver Plus BENCHMAK FTSE/JSE Africa SA Listed Index (J253) FTSE/JSE Africa Top40 Index (J200T) FTSE/JSE All Share Index Including Income (J203T) FTSE/JSE Shareholder Weighted (SWIX) All Share Index BEASSA ALBI Total eturn Index CPI + 3% p.a. over a rolling 36 month period CPI + 4% p.a. over a rolling 36 month period CPI + 5% p.a. over a rolling 36 month period CPI + 6% p.a. over a rolling 60 month period ALBI 13 year Index over a rolling 24 month period 45% All Share Index, 22.5% All Bond Index, 7.5% of the Short Term Fixed Interest Index, 15% MSCI World Index and 10% Citigroup World Gov Bond Index STeFI Composite Index Peer Group FTSE/JSE Shareholders Weighted Index (SWIX) FTSE/JSE SA Listed Index Peer Group CATEGOY South Africa eal Estate General South Africa Equity Large Cap South Africa Equity General South Africa Equity General South Africa Interest Bearing Variable Term Bonds South Africa Multi Asset Low Equity South Africa Multi Asset Low Equity South Africa Multi Asset Medium Equity South Africa Multi Asset High Equity South Africa Multi Asset Income South Africa Multi Asset High Equity South Africa Interest Bearing Short Term South Africa Multi Asset High Equity South Africa Equity General South Africa eal Estate General South Africa Multi Asset High Equity INVESTMENT ACCOUNTS MIN LUMP SUM MIN DEBIT ODE POTFOLIO MANAGE Fayyaz Mottiar Stephen Arthur Errol Shear Stephen Arthur & Cornette van Zyl Sheetal ama Sheetal ama Sheetal ama Sheetal ama Sheetal ama Sheetal ama Sheetal ama St John Bunkell & Aaron Masina St John Bunkell & Aaron Masina St John Bunkell & Aaron Masina St John Bunkell & Aaron Masina Chris Watts & Aaron Masina INCOME DISTIBUTIONS 15 April, 15 July, 15 October & 15 April,15 July, 15 October & 15 April,15 July, 15 October & Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 24 Absa Managers 2017 Abridged Annual eport 25

14 Financial statements Financial statements Financial statements Absolute Africa Equity Feeder Balanced Bond Financial Absolute Africa Equity Feeder Balanced Income statement For the year ended 31 December 2016 Bond statements Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution ( ) Income Distribution at the end of the year ( ) ( ) Balance sheet As at 31 December 2016 Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio Current Liabilities ( ) ( ) Investment charges Initial fee (including VAT) Annual fee (including VAT) 3,42% 3,42% 3,42% 3,42% 1,71% 1,71% 1,71% 0,57% Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 26 Absa Managers 2017 Abridged Annual eport 27

15 Financial statements Financial statements Portfolio composition (%) Liquid Assets Basic Materials Financials Industrials Bond Unit Trust International Other Assets Absolute Africa Equity Feeder Balanced 14,01 12,19 9,80 0,03 3,97 7,78 6,12 7,69 0,36 2,99 48,69 25,55 84,56 13,85 30,21 15,40 87,81 13,00 15,98 Bond The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Sector Average Sector Average Sector Average Sector Average 3,68 (19,71) 1,61 13,33 3 Years 6,51 1,81 5,96 6,65 5 Years 9,07 12,59 10,00 7,22 10 Years 8,32 4,14 8,26 7,88 Income distribution per unit (cents) Jan16 A1 Class Mar16 A Class Mar16 B Class Mar16 C Class 2,10 1,76 2,22 3 Years 5 Years 10 Years Actual Actual Actual Actual 2,18 (22,32) 2,81 15,66 6,51 N/A 6,13 7,50 8,55 N/A 9,65 7,27 9,56 N/A 9,01 7,32 Mar16 C1 Mar16 D Class Mar16 B2 Class Jun16 Class 9,19 Euro Income isa Jun16 A Class Jun16 B Class Jun16 C Class 4,55 4,57 7,95 2,32 3,69 5,97 1,97 5,65 3,36 10,75 2,44 Core Income Flexible Income Jun16 C1 Class 5,24 9,75 Jun16 D Class Jun16 B2 Class Sep15 Class 5,52 10,38 Euro Income isa Core Income Flexible Income Sep16 Class Sep16 A Class 2,13 Income statement For the year ended 31 December 2016 Sep16 B Class Sep16 C Class Sep16 C1 Class Sep16 D Class 1,77 2,27 Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year (61 670) Sep16 B2 Class Dec16 Class Dec16 A Class Dec16 B Class Dec16 C Class Dec16 C1 Class Dec16 D Class 8,91 2,71 7,31 2,16 1,94 5,30 1,78 3,83 10,81 2,28 3,38 8,80 3,71 9,71 Amount available for Distribution Income Distribution at the end of the year ( ) (60 601) (30 586) ( ) Dec16 C3 Class Dec16 B2 Class Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 28 Absa Managers 2017 Abridged Annual eport 29

16 Financial statements Financial statements Euro Income isa Core Income Flexible Income Euro Income isa Core Income Flexible Income Balance sheet Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio Current Liabilities Investment charges Initial fee (including VAT) Annual fee (including VAT) As at 31 December ( ) (60 601) (30 586) ( ) ,14% 0% 1,14% 3,42% 0,86% 0,57% 0,57% 0,68% Apr16 A1 Class 0,79 May16 A1 Class 0,40 Jun16 A1 Class 0,46 Jun16 Class Jun16 A Class 2,49 3,40 Jun16 B Class 2,08 3,50 Jun16 C Class Jun16 C1 Class Jun16 D Class Jun16 B2 Class Jul16 A1 Class 0,77 Aug16 A1 Class 0,36 Sept16 A1 Class 0,45 Sep16 Class Sep16 A Class 0,04 Sep16 B Class Sep16 C Class Portfolio composition (%) Liquid Assets 14,45 11,72 34,77 0,92 Basic Materials 85,55 Financials 54,48 78,05 Industrials Bond Unit Trust 88,28 10,75 21,03 International Other Assets Income distribution per unit (cents) Sep16 C1 Class Sep16 D Class Sep16 B2 Class Oct16 A1 Class 0,77 Nov16 A1 Class 0,40 Dec16 A1 Class 0,48 Dec16 Class Dec16 A Class 4,18 Dec16 B Class 3,72 1,86 Dec16 C Class Dec16 C1 Class Dec16 D Class Dec16 C3 Class Jan16 A1 Class Feb16 A1 Class Mar16 A1 Class Mar16 A Class Mar16 B Class Mar16 C Class Mar16 C1 Class Mar16 D Class Mar16 B2 Class 0,61 0,47 0,41 2,09 1,66 Dec16 B2 Class The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 30 Absa Managers 2017 Abridged Annual eport 31

17 Financial statements Financial statements Income Enhancer Income Enhancer ABIL etention Inflation Beater Global Value Feeder Investments performance (%) Sector Average Sector Average Sector Average Sector Average Balance sheet Assets As at 31 December Years 5 Years (16,56) 8,32 N/A N/A 2,44 6,81 N/A N/A 7,50 6,55 N/A N/A Investments at Market Value Current Assets Years 5,28 7,71 N/A N/A Equity and Liabilities Years Actual Actual Actual Actual (14,69) 8,51 N/A N/A (0,89) 6,10 N/A N/A Capital Value of Unit Portfolio (65 790) ( ) 5 Years 5,99 6,20 N/A N/A Current Liabilities Years 4,99 N/A N/A N/A Investment charges Initial fee (including VAT) 1,14% 0,00% 3,42% 3,42% Annual fee (including VAT) 0,63% 0,00% 1,43% 1,71% Income statement Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution Income Distribution at the end of the year Income Enhancer Income Enhancer ABIL etention Inflation Beater Global Value Feeder Income Enhancer Income Enhancer ABIL etention Inflation Beater For the year ended 31 December 2016 Global Value Feeder ( ) (65 790) ( ) Portfolio composition (%) Liquid Assets 49,53 5,46 12,13 Liquid Assets (Foreign) Basic Materials 33,76 Financials 72,02 Industrials 2,37 Bond 3,08 Unit Trust 0,53 87,87 Unit Trust Foreign 8,23 International Foreign Equities Other Assets 16,71 5 8,32 Income distribution per unit (cents) Jan16 A1 Class Mar16 A Class 0,60 1,65 Mar16 B Class 0,49 1,15 Mar16 C Class 0,65 2,07 Mar16 C1 Class 1,84 Mar16 D Class Mar16 B2 Class Jun16 Class Jun16 A Class 1,77 1,97 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 32 Absa Managers 2017 Abridged Annual eport 33

18 Financial statements Financial statements Income Enhancer Income Enhancer ABIL etention Inflation Beater Global Value Feeder Jun16 B Class Jun16 C Class Jun16 C1 Class 1,46 1,44 1,92 2,39 2,16 Global Core Equity Feeder Jun16 D Class Jun16 B2 Class Sep16 Class Sep16 A Class Sep16 B Class Sep16 C Class Sep16 C1 Class 0,61 1,73 0,45 1,19 0,60 2,16 2,00 Global Core Equity Feeder Sep16 D Class Sep16 B2 Class Dec16 Class Dec16 A Class Income statement Net Income for the year For the year ended 31 December Dec16 B Class Dec16 C Class Dec16 C1 Class Dec16 D Class Dec16 C3 Class Dec16 B2 Class (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution Income Distribution ( ) The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Sector Average Sector Average Sector Average Sector Average at the end of the year Balance sheet Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio ( ) As at 31 December Years 8,32 N/A 3,68 (7,81) 6,81 N/A 6,51 10, ( ) 5 Years 10 Years 6,55 N/A 9,07 19,33 7,71 N/A 8,32 9,45 Current Liabilities Years Actual Actual Actual Actual 8,98 N/A 5,58 1,36 5,87 N/A 5,83 14,02 Investment charges Initial fee (including VAT) 3,42% 0,00% 5 Years 10 Years 5,76 N/A 6,85 22,47 7,16 N/A 7,55 8,85 Annual fee (including VAT) 1,71% 0,46% Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 34 Absa Managers 2017 Abridged Annual eport 35

19 Financial statements Financial statements Portfolio composition (%) Liquid Assets Basic Materials Financials Industrials Liquid Assets (Foreign) Bond Unit Trust International Foreign Equities Other Assets 7,42 98,37 22,99 9,92 8,36 3,55 92,02 29,39 Income distribution per unit (cents) Global Core Equity Feeder The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Sector Average Sector Average 1,41 (7,81) 3 Years 6,12 10,62 5 Years 10,61 19,33 10 Years 8,85 9,45 Actual Actual 2,27 (3,73) 3 Years 6,07 N/A 5 Years 10,49 N/A 10 Years N/A N/A Jan16 A1 Class Mar16 A Class Mar16 B Class Multi Protection of s Mar16 C Class Mar16 C1 Class Mar16 D Class Multi Preservation of s Multi Accumulation of s Mar16 B2 Class Jun16 Class Multi Creation of s Jun16 A Class Jun16 B Class Jun16 C Class Jun16 C1 Class Jun16 D Class Jun16 B2 Class 3,02 2,24 4,12 3,63 4,02 Multi Protection of s Multi Preservation of s Multi Accumulation of s Multi Creation of s Sep16 Class Sep16 A Class Sep16 B Class Income statement For the year ended 31 December 2016 Sep16 C Class Sep16 C1 Class Net Income for the year Sep16 D Class Sep16 B2 Class Dec16 Class Dec16 A Class Dec16 B Class Dec16 C Class 2,92 2,05 3,91 (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution Income Distribution (61 280) (16 552) Dec16 C1 Class Dec16 D Class Dec16 C3 Class 3,93 3,77 at the end of the year (15 015) (4 423) Dec16 B2 Class Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 36 Absa Managers 2017 Abridged Annual eport 37

20 Financial statements Financial statements Multi Protection of s Multi Preservation of s Multi Accumulation of s Multi Creation of s Multi Protection of s Multi Preservation of s Multi Accumulation of s Multi Creation of s Balance sheet Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio Current Liabilities Investment charges Initial fee (including VAT) Annual fee (including VAT) Portfolio composition (%) Liquid Assets Basic Materials Financials Industrials Bond Unit Trust International Other Assets Income distribution per unit (cents) As at 31 December (15 015) (4 423) ,42% 3,42% 3,42% 3,42% 1,14% 1,14% 1,14% 1,14% 4,56 3,88 4,20 3,80 Jun16 B Class 1,35 0,62 0,21 Jun16 C Class 2,34 1,67 1,34 1,15 Jun16 C1 Class Jun16 D Class 0,38 0,09 Jun16 B2 Class Sep16 Class Sep16 A Class Sep16 B Class Sep16 C Class Sep16 C1 Class Sep16 D Class Sep16 B2 Class Dec16 Class Dec16 A Class 2,61 2,52 2,04 0,86 Dec16 B Class 2,29 2,18 1,67 0,47 Dec16 C Class 3,31 3,24 2,83 1,68 Dec16 C1 Class Dec16 D Class 3,30 3,22 2,76 1,55 Dec16 C3 Class Dec16 B2 Class The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Jan16 A1 Class Sector Average Sector Average Sector Average Sector Average Mar16 A Class 3,68 3,68 1,61 1,41 Mar16 B Class 3 Years 6,51 6,51 5,96 6,12 Mar16 C Class 5 Years 9,07 9,07 10,00 10,61 Mar16 C1 Class 10 Years 8,32 8,32 8,26 8,85 Mar16 D Class Mar16 B2 Class Jun16 Class Jun16 A Class 1,60 0,89 0,49 0,29 3 Years 5 Years Actual Actual Actual Actual 4,42 4,78 4,98 6,43 6,14 6,25 6,40 6,62 7,76 8,50 9,20 9,80 10 Years N/A N/A N/A N/A Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 38 Absa Managers 2017 Abridged Annual eport 39

21 Financial statements Financial statements Money Market Pound Sterling Income Money Market Pound Sterling Income Equity Prudential of s Equity Prudential of s Portfolio composition (%) Income statement Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution Income Distribution at the end of the year Balance sheet Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio Current Liabilities Investment charges Initial fee (including VAT) Annual fee (including VAT) Money Market Pound Sterling Income Equity For the year ended 31 December 2016 Prudential of s ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) As at 31 December ( ) ( ) ,40% 1,14% 3,42% 4,56% 0,57% 0,86% 1,71% 0,68% Liquid Assets 7,27 42,49 3,30 2,18 Liquid Assets (Foreign) 57,51 Basic Materials Financials 96,70 Industrials Bonds Unit Trust 97,82 International Other Assets 92,73 Income distribution per unit (cents) Jan16 A1 Class Mar16 A Class 0,96 4,18 Mar16 B Class 0,56 3,38 Mar16 C Class 5,13 Mar16 C1 Class 4,66 Mar16 D Class 4,90 Mar16 B2 Class Jun16 Class Jun16 A Class 3,42 Jun16 B Class 2,57 Jun16 C Class 4,45 Jun16 C1 Class 3,94 Jun16 D Class 4,28 Jun16 B2 Class Sep16 Class Sep16 A Class 2,89 4,98 Sep16 B Class 2,42 4,20 Sep16 C Class 6,09 Sep16 C1 Class 5,41 Sep16 D Class 5,36 Sep16 B2 Class Dec16 Class Dec16 A Class 3,97 Dec16 B Class 3,12 Dec16 C Class 4,95 Dec16 C1 Class 4,44 Dec16 D Class 4,86 4,68 Dec16 C3 Class Dec16 B2 Class Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 40 Absa Managers 2017 Abridged Annual eport 41

22 Financial statements Financial statements The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after Large Cap Select Equity s US Dollar Income Preserver Plus declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Balance sheet As at 31 December 2016 Assets Investments performance (%) Investments at Market Value Sector Average Sector Average Sector Average Sector Average Current Assets ,55 (16,56) 5,89 1,41 Equity and Liabilities Years 5 Years 10 Years 6,61 2,44 13,98 6,12 6,08 7,50 16,92 10,61 7,30 5,28 14,10 8,85 Actual Actual Actual Actual Capital Value of Unit Portfolio Current Liabilities ( ) ,63 (26,05) 9,81 3, Years 5 Years 6,45 (1,11) 25,10 5,24 5,91 5,98 23,35 8,56 Investment charges 10 Years 7,18 2,80 17,74 7,34 Initial fee (including VAT) 3,42% 3,42% 1,14% 3,42% Annual fee (including VAT) 1,14% 1,71% 0,86% 0,86% Portfolio composition (%) Large Cap Liquid Assets 6,04 6,04 1,06 28,41 Select Equity s US Dollar Income Preserver Plus Basic Materials Financials Industrials Liquid Assets (Foreign) Bond 0,04 1,33 22,75 17,35 13,02 98,94 27,47 Unit Trust 7,77 1,85 Large Cap Select Equity s US Dollar Income Preserver Plus International Other Assets 38,22 0,79 1,78 21,15 Income statement Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year Amount available for Distribution Income Distribution at the end of the year For the year ended 31 December ( ) Income distribution per unit (cents) Jan16 A1 Class Mar16 A Class 1,48 Mar16 B Class 1,00 Mar16 C Class Mar16 C1 Class Mar16 D Class Mar16 B2 Class Jun16 Class Jun16 A Class 19,79 4,86 5,75 0,56 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 42 Absa Managers 2017 Abridged Annual eport 43

23 Financial statements Financial statements Large Cap Select Equity s US Dollar Income Preserver Plus Smart Alpha Equity Smart Alpha Flexible Balanced Smart Alpha Income Jun16 B Class 14,48 2,24 5,21 Smart Alpha Income Jun16 C Class 20,77 7,94 Jun16 C1 Class 6,75 Jun16 D Class 7,17 0,71 Jun16 B2 Class Sep16 Class Sep16 A Class Sep16 B Class Sep16 C Class Sep16 C1 Class 2,04 1,70 Smart Alpha Equity Smart Alpha Flexible Balanced Smart Alpha Income Smart Alpha Income Sep16 D Class Sep16 B2 Class Income statement For the year ended 31 December 2016 Dec16 Class Dec16 A Class Dec16 B Class Dec16 C Class 7,44 4,32 0,93 2,21 1,67 8,54 7,47 Net Income for the year (Overdistribution) Undistributed Income at the beginning of the year (51 418) Dec16 C1 Class Dec16 D Class 5,89 6,67 1,05 Amount available for Distribution Dec16 C3 Class Dec16 B2 Class The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Sector Average Sector Average Sector Average Sector Average (1,00) 3,16 16,56 1,61 3 Years 4,29 5,13 2,44 5,96 5 Years 11,03 11,19 7,50 10,00 10 Years 9,66 9,28 5,28 8,26 Actual Actual Actual Actual 2,39 4,43 (11,55) (2,90) 3 Years 7,72 3,98 8,53 N/A 5 Years 13,82 9,53 10,50 N/A 10 Years 12,22 10,71 7,44 N/A Income Distribution at the end of the year Balance sheet Assets Investments at Market Value Current Assets Equity and Liabilities Capital Value of Unit Portfolio Current Liabilities Investment charges Initial fee (including VAT) Annual fee (including VAT) (200) (200) (51 264) As at 31 December (49 482) (200) (51 264) ,42% 3,42% 3,42% 3,42% 0,86% 0,86% 0,51% 0,86% Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 44 Absa Managers 2017 Abridged Annual eport 45

24 Financial statements Financial statements Large Cap Select Equity s US Dollar Income Preserver Plus Smart Alpha Equity Smart Alpha Flexible Balanced Smart Alpha Income Smart Alpha Income Portfolio composition (%) Liquid Assets (0,35) 5,01 42,87 0,16 Basic Materials Financials 34,38 Industrials 23,48 5,84 Liquid Assets (Foreign) Bonds 4,48 Unit Trusts 9,91 2,53 2,67 International Other Assets 4,03 20,13 Income distribution per unit (cents) Jan16 A1 Class Mar16 A Class Mar16 B Class Mar16 C Class 1,41 Dec16 A Class 0,39 1,48 1,68 2,27 Dec16 B Class Dec16 C Class Dec16 C1 Class Dec16 D Class 0,53 1,55 1,79 2,42 Dec16 C3 Class Dec16 B2 Class The distributions were declared on 31 March, 30 June, 30 September and on 31 December 2016, with the actual payment date being the 15th of the following month for all other funds except Income Enhancer and Inflation Beater, which pays on the second working day after declaration date. The Money Market, Inflation Beater and Income Enhancer distribute monthly. The Bond, Euro Income, Pound Sterling Income and USD Income distribute quarterly. Investments performance (%) Mar16 C1 Class Mar16 D Class Mar16 B2 Class Jun16 Class Jun16 A Class Jun16 B Class Jun16 C Class Jun16 C1 Class Jun16 D Class Jun16 B2 Class Sep16 Class 1,51 0,70 1,43 1,67 1,80 0,81 1,56 1,76 1,95 3 Years 5 Years 10 Years 3 Years 5 Years 10 Years Sector Average Sector Average Sector Average Sector Average 3,16 1,41 8,32 5,89 5,13 6,12 6,81 13,98 11,19 10,61 6,55 16,92 9,28 8,85 7,71 14,10 Actual Actual Actual Actual (2,25) (1,03) 6,28 4,92 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Sep16 A Class 1,37 Sep16 B Class Sep16 C Class Sep16 C1 Class Sep16 D Class 1,47 Sep16 B2 Class Dec16 Class Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 46 Absa Managers 2017 Abridged Annual eport 47

25 Company information Legal notes Company information Legal Notes Company registration number Country of incorporation and domicile Nature of business and principle activities Directors Prescribed officer egistered office Business address Holding company Ultimate holding company Auditors Supervised by Company Secretary 1991/000881/06 South Africa The administration and management of collective investment schemes. Name Appointment esignation date Kgatla SS (Executive) 29 September 2015 Lambrechts HA (Independent NonExecutive) Moganwa CJ 29 July 2015 (NonExecutive) Nqweni NC 27 January 2016 (Executve) Dingaan T (Independent NonExecutive) amdial A 7th Floor, Barclays Towers West 15 Troye Street Johannesburg, 2001 South Africa Postal address 15 Alice Lane Sandton 2196 South Africa Absa Financial Services Limited (100%) Barclays Bank PLC (62.35%) PricewaterhouseCoopers Inc. Private Bag X36 Sunninghill 2157 P.O.Box 7735 Johannesburg 2000 South Africa These annual financial statements are under the direction and supervision of the CFO, Avashnee amdial CA(SA). Absa Secreterial Services Proprietary Limited Performance is calculated for the fund, individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. Figures quoted are from Morningstar and/or INET for the period ending 28/02/2017, using NAV to NAV figures, with income distributions reinvested on the exdividend date and figures quoted are net of fund fees. Annualised figures refer to the average yearly return of an investment over a given time period. Collective Investment Schemes (CIS) are generally medium to longterm investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to future performance. Fluctuations or movements in exchange rates may cause the value of underlying international investments in a fund to move up or down. Forward pricing is used. CIS are traded at ruling prices. Absa Managers Limited (AFM) may borrow up to 10% (ten per cent) of the market value of a fund to accommodate insufficient liquidity. Securities in a fund may be lent to borrowers. Prices are calculated on a net asset value (NAV) basis which is the total value of all assets in a fund including any income accrual and less permissible deductions from the fund. Prices are published daily and are available at UnitTrusts or from AFM upon request. Fees and charges associated with the most expensive class are available directly from AFM for investment by members of the public, other than financial institutions. CIS are financial products and not investments in insurance policies with an insurer and therefore coolingoff periods do not apply. AFM does not provide any guarantee either with respect to the capital or the return of a fund. The directors and personnel of AFM may be invested in any of the funds. AFM holds professional indemnity cover. AFM utilises Absa Bank Limited s electronic and telephone banking platform. All requests for transactions received on or before 16:00 every day will be traded at ruling prices and valued after 16:00 on that day. Investments in funds with foreign securities may involve various material risks, which include potential constraints on liquidity and the repatriation of funds, macroeconomic, political, foreign exchange, tax and settlement risks and potential limitations on the availability of market information and there may be tax to be levied on certain of the benefits accruing to the investor from the funds and AFM may be required to deduct and pay over to the authorities any such tax from such benefits before paying any balance to or for the benefit of the investor. AFM has a right to close the fund to new investors in order to manage it more efficiently in accordance with its mandate. The investor understands that the legal and tax environment is continually changing, and that AFM cannot be held responsible for any changes to the law which might have an effect on their investment, and which did not exist at the time their investment was made. Additional information on the fund including, but not limited to, brochures, application forms, annual and halfyearly reports are available free of charge from the AFM website or from AFM upon request. AFM is a registered Collective Investment Scheme Manager and a full member of the Association for Savings and Investment SA. Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 48 Absa Managers 2017 Abridged Annual eport 49

26 Contact details Contact details Absa Managers WIM Fax Instructions Enquiries: (0) (0) (0) Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 50 Absa Managers 2017 Abridged Annual eport 51

27 Absa Managers Limited eg No 1991/000881/06 is a registered Collective Investment Scheme Manager and a full member of the Association of Savings and Investments South Africa (ASISA). Trustee: Société Genérale, 52 Absa Managers 2017