SEMI-ANNUAL FUND REPORT

SEMI-ANNUAL FUND REPORT FOR THE 6 MONTHS ENDED 31 DECEMBER 2018

Is it over yet? The years 2016 to 2017 represented periods of steady growth for South African investors. Sadly 2018 was very different, proving to be an incredibly challenging year. In the international arena, the MSCI World Index reached its peak on the 25th January 2018. It then retraced the prior year s gains and sold off 16% by the end of December. At one stage, the index was down 20% from peak to trough as volatility spiked. December 2018 saw the second largest drawdown since 1930 for the S&P 500, making 2018 the toughest year for equity markets since the 2008 financial crisis. Volatility is back. At home, Equity markets have returned precisely 0% for the period June 2014 to December 2018. Peaking in January 2018, there was a steady selloff throughout the remainder of the year. Of the 15% decrease from the peak, 12% happened in Q4. Naspers was the main culprit, losing 32% of its market value over the year. Across the globe, 2018 hit markets hard, even taking into account a small bounce towards the end of December: Annual returns: Leading stock markets and indices, 2009-2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Hong Kong 52.0% 16.1% 0.0% 22.9% 29.6% 11.4% 6.8% 17.5% 36.0% -6.2% Canada 30.7% 14.4% -0.4% 22.7% 24.1% 7.6% 1.9% 12.5% 20.1% -10.4% South Africa 28.6% 12.8% -6.7% 14.4% 17.8% 7.4% -0.7% 9.5% 19.4% -11.4% Euro Zone 28.0% 10.9% -7.6% 13.4% 17.4% 4.4% -2.5% 5.3% 17.5% -11.6% MSCI World 27.0% 9.6% -11.1% 13.2% 16.7% 2.9% -2.7% 0.4% 9.0% -13.0% Australia 25.0% 8.6% -11.3% 8.2% 9.6% 1.3% -7.2% -0.1% 7.7% -13.2% US 23.5% 5.3% -20.0% 4.0% 2.9% -2.1% -11.1% -1.2% 6.0% -13.6% Average 30.7% 11.1% -8.2% 14.1% 16.9% 4.7% -2.2% 6.3% 16.5% -11.4%, local currency As you know, Methodical s established funds follow a Momentum investment style. Unfortunately, Momentum underperformed other market styles, such as Value and Quality, in the fourth quarter of 2018. The global MSCI Momentum index fell 21%, peak-to-trough, in Q4 versus the MSCI World Value tracker losing 11.76% in the same quarter. In South Africa Momentum index trackers were down 22% from their January highs. There is no Value tracker index in South Africa, but some of the more well-known and larger Value funds suffered losses of circa 10% over the same period. In this sense, Value beat the overall market while Momentum underperformed, in line with expectations that the two investment styles tend to be negatively correlated with one another. It might seem a strange time to start a new Equity fund, but the timing is actually perfect for the Methodical Equity Preserver Fund. It launched on 10 December 2018 with initial seed capital of ZAR 205m. This new, domestic equity fund seeks to protect investors from expected first losses by providing an asymmetric return profile. The strategy history, as evidenced by a segregated mandate managed by Methodical, has been compelling over the past few years. We expect this new fund to do very well in what is likely to be a volatile year ahead.. Steven van Jaarsveld Chief Investment Officer

METHODICAL GLOBAL EQUITY FUND PORTFOLIO OVERVIEW Portfolio Managers Fund Classification Fund Inception Date Total Fund Size Benchmark Edo Brasecke and Steven van Jaarsveld Global Equity Large Cap 1 August 2016 $ 3 232 293.53 MSCI World NAV % NAV change over 6m to end June Concentration of Top 10 Holdings % Maximum Drawdown over 6 months $ 8.9-24.1% 25.4% -13.9% PERFORMANCE TABLE Period % Fund % Benchmark 1 Month -10.5-7.7 3 Months -23.7-13.7 6 Months -24.1-9.8 1 Year -23.6-10.4 Since Inception (annualised) -5.4 3.6 Investment returns are calculated using net NAV to NAV numbers with income reinvested. The performance for each period is reflected in the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full investment return calculations are available from the manager on request. PERFORMANCE AND MARKET SUMMARY Like much of the market, the Methodical Global Equity Fund had a difficult year due to the market-wide sell-off in H2. The numbers shown in the annual returns chart demonstrate that every major market experienced losses over the calendar year. As an investment style, Momentum faced greater challenges, given its tendency to exaggerate broad market movements either up or down. Looking at MSCI international and US Momentum indices as a comparison, the Methodical fund outperformed US momentum for the final quarter of the year, in part due to its more international exposure: 0% -5% -10% -15% -20% -18.35% -19.61% Momentum Returns International Momentum US Momentum Methodical Global Equity -17.75% PERFORMANCE REVIEW The Fund underperformed its benchmark over the recent 6 months. The 3 positions that benefited returns the most in the period: MEG Energy Corp 0.4 1 Eli Lilly & Co. 0.3 5 Holly Frontier Corp 0.3 1 The 3 positions which detracted the most from returns in the period: Align Technology Inc -1.3 8 Aphria Inc -1.0 10 Twitter Inc -1.0 1 80% 70% 60% 50% 40% 30% 20% 10% 0% 73% % Quarterly Over & Underperformance 27% MSCI Momentum Index Overperforming periods Since Q1 1995, the MSCI Momentum index has out-performed the benchmark MSCI World index in 73% of the 96 quarters and added average alpha of 1.34% per quarter over the benchmark. The exaggeration tendency is also clear from the following, which shows max/min quarterly returns for same period: 25% 75% MSCI Value Index Underperforming periods -25% -30% Q4 return -25.76% 6 Month return -23.67% -24.13% Losses within Momentum exceeded the global average (-11.4%) for the final six months of 2018 because of mean reverting stocks retracing their lows. Luckily, mean reversion is the least frequently occurring market phenomenon over time, on average striking every 6-7 years. Because of this, Momentum compares well to other leading strategies over time: 40% 30% 20% 10% 0% -10% -20% -30% Maximum and Minimum Quarterly return since Q1 1995 35.43% 20.74% 21.85% -22.18% -21.24% -25.40% MSCI World Index MSCI Momentum Index MSCI Value Index Maximum quarterly return Minimum quarterly return

METHODICAL GLOBAL EQUITY FUND PORTFOLIO COMMENTARY As a measure to diversify the portfolio and protect it from stock specific risks, we increased the number of shares in August from 75 to 122. This increase allows Methodical to select sectors that are demonstrating momentum and not just specific shares. The Fund will now dynamically adjust the number of counters going forward to better reflect market momentum. The change has had a positive effect, as we calculate the Fund would have lost a further 2.1% had the change not been made. In this way, the portfolio managers have taken remedial action to reduce investor losses. In terms of outlook, there remain concerns across the globe: many believe that the US economic cycle is stretched, with the effects of fiscal stimulus fading after H1 2019, putting pressure on equity markets; European business confidence has weakened, with surveys indicating a slowdown in growth expected and, with Brexit on the horizon, a potential outright contraction; Chinese growth has slowed, with imports having slowed from 37% year-on-year in January to 3% in November. The clampdown on Chinese shadow banking by the government has contracted domestic money supply, as well as slowing retail sales and industrial production. The Hong Kong stock exchange declined 10.7% over the final 6 months of the year. Methodical does not make predictions but takes some comfort from past trends. Since Q1 1995, there have been 27 quarters of negative performance for the international Momentum index. Of these, 18 (67%) were followed by a year of positive returns. 3 of the 5 worst quarters had positive subsequent years. On the balance of probability, Q4 2018 will be similarly followed by a year of positive returns. Best/worst US industrial sectors in 2018 Sectors The US markets disclose more information than any other, allowing good sector-specific research. The news is unsurprising: every sector was negative in H2 2018 apart from the uber-defensive Healthcare and Utilities sectors. At the other end of the spectrum, Tobacco suffered some of its biggest every losses, losing 25% over concerns that regulators might ban menthol cigarettes. Market Breadth Market breadth (the number of positive vs the numbers of negative shares) has unsurprisingly been poor. Over 2018, 66% of all the shares on the S&P 500 were negative compared to 21% and 24% in 2017 and 2016, respectively. Over the last 6 months that number reached 74%. Attribution Global The highest attribution over the past 6 months came from MEG Energy based in Canada. They received an offer for a buyout from Husky energy; the resulting share price increase allowed us to take profits. The largest negative contributors were: Twitter: the media giant suffered share price reductions following President Trump s attack on tech (notably on Twitter itself) and missed earnings. The slump was attributed to slower new user growth, which had been expected to be stimulated by the popularity/use by President Trump. Having sold at $31.91, it is worth noting that the share ended the year 9.9% lower at $28.74. Aphria: this marijuana producer lost value once the drug was quasi-legalised in South Africa, opening the doors to multiple small traders in a market with low barrier to entry. As above, Methodical avoided further loss by selling at $7.6, whereas the stock continued to fall by year-end to $5.30. Align Technology: this orthodontic technology company not only missed its Q4 estimate but also the lowest analyst forecast, leading to a 10% sell-off. Again, Methodical s decision to sell in Nov at $230.9 helped avoid more pain, as the price fell to $209.4 by 31 Dec 2018. A close second was the pharmaceutical company Eli Lilly who delivered strong growth coming from its cancer-focused LOXO division, its 3rd acquisition for the year.

METHODICAL GLOBAL EQUITY PRESCIENT FEEDER FUND PORTFOLIO COMMENTARY OVERVIEW Portfolio Managers Fund Classification Fund Inception Date Total Fund Size Benchmark Edo Brasecke and Steven van Jaarsveld Global Equity Large Cap 1 February 2017 R 16 453 594.14 MSCI World All Cap NR ZAR NAV R0.94 % NAV change over 6m to end June -20.1% Concentration of Top 10 Holdings 25.4% % Maximum Drawdown over 6 months -11.6% PERFORMANCE TABLE Period % Fund % Benchmark 1 Month -8.0-4.4 3 Months -22.5-12.6 6 Months -20.1-5.7 1 Year -12.2 5.1 Since Inception (annualised) -3.6 8.3 Investment returns are calculated using net NAV to NAV numbers with income reinvested. The performance for each period is reflected in the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full investment return calculations are available from the manager on request. PERFORMANCE REVIEW The Fund underperformed its benchmark over the recent 6 months. The 3 positions that benefited returns the most in the period: MEG Energy Corp 0.4 1 Eli Lilly & Co. 0.3 5 Holly Frontier Corp 0.3 1 The 3 positions which detracted the most from returns in the period Align Technology Inc -1.3 8 Aphria Inc -1.0 10 Twitter Inc -1.0 1 PERFORMANCE AND MARKET SUMMARY The Fund invests solely in the zero-fee Class E of the Methodical Global Equity Prescient Fund. Its performance is therefore entirely derived from that of the underlying fund and any currency translation / transaction effects. The rand peaked at the end of February 2018 at 11.59 to the US dollar. This came after a huge 20% rally brought on by Rhamaphoria and peaking equity markets. It was therefore surprising that the rand strengthened in the last quarter of 2018. This rally was brought by robust commodities and appreciated the rand by 6.9%, ending the year at 14.39 to the US dollar. This appreciation benefitted South African investors to the tune of 4%, as it shielded them somewhat from underlying negative performance: whereas the USD Methodical Equity Fund generated returns of -24.1% in the 6m YTD, the Feeder Fund was -20.1%. Since then it has been a one-way street: the rand lost ground, to the tune of 33% against the dollar, by the first week of September 2018. This depreciation was triggered by a risk off sentiment in equity markets brought on by volatility, as well the dollar rally that set in as the US pushed hard with its America First campaign.

METHODICAL EQUITY PRESCIENT FUND PORTFOLIO OVERVIEW Portfolio Managers Fund Classification Fund Inception Date Total Fund Size Benchmark Edo Brasecke and Steven van Jaarsveld Africa Equity 1 June 2016 R 58 955 078.28 FTSE/JSE All Share TR ZAR NAV R0.87 % NAV change over 6m to end June -9.9% Concentration of Top 10 Holdings 29.5% % Maximum Drawdown over 6 months -4.8% PERFORMANCE TABLE Period % Fund % Benchmark 1 Month 2.6 4.3 3 Months -7.3-4.9 6 Months -9.9-6.9 1 Year -17.6-8.5 Since Inception (annualised) -4.3 2.1 Investment returns are calculated using net NAV to NAV numbers with income reinvested. The performance for each period is reflected in the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full investment return calculations are available from the manager on request. PERFORMANCE REVIEW The Fund underperformed its benchmark over the recent 6 months. The 3 positions that benefited returns the most in the period: Anglo Platinum Ltd 1.4 19 Anglogold Ashanti Ltd 1.2 5 Impala Platinum Holdings Ltd 0.7 12 The 3 positions which detracted the most from returns in the period:, Intu Properties Plc -1.4 1 Aspen Pharmacare Holdings Ltd -0.7 3 PERFORMANCE AND MARKET SUMMARY Over 2018, South African markets lost 11.4% of their value, exactly in line with the global average. As with global markets, Momentum as a style experienced increased return amplitude in South Africa. The chart below compares Satix Momentum, a leading passive market fund, with the Methodical Equity Prescient Fund: 0% -2% -4% -6% -8% 10% 12% Satrix Momentum -5.63% -9.61% Momentum Returns Q4 return 6 Month return Methodical Local Equity -7.25% -9.84% Although Methodical has a worse Q4 than Satrix, on a six-month basis the two funds performed almost exactly in line. One important difference between the two is that Satrix has no offshore allocation whereas the Methodical fund has a 20% offshore exposure to the Methodical Global Equity Fund. This offshore allocation (combined with rand appreciation) contributed circa 6% of the fund s underperformance. Stripping this out means the Methodical fund, on a like-for-like domestic basis, actually Standard Bank Group Ltd -0.6 17 beat the Satrix fund over the past six months, circa -4% vs -9.6%, respectively. Sectors Several sectors did perform well over the past six months, with Housing and Fixed-line telecommunications both growing near 30%. This was offset, however, with numerous other sectors notably some defensives like Pharmaceuticals showing steep reductions in value. Pharmaceuticals Tobacco Beverage Personal Goods Industrial Transportation Media Food Production Forestry & Paper Chemicals Consumer Materials Alternative Energy Aerospace & Defense Banks Ret ail Non-Life Insurnace Mining Life Assurance Automotive Telecommunications Housing Best/worst FTSE JSE sectors in H2 2018-50% -40% -30% -20% -10% 0% 10% 20% 30% 40%, FTSE/JSE Market Breadth Given the chart on the following page, market breadth was weak, with only 26% of all stocks up for the year: 55% were down at least 10%, 32% were down at least 20%; and, 22% were down 30% or more for the year.

METHODICAL EQUITY PRESCIENT FUND PORTFOLIO COMMENTARY ALSI Share Performance for 2018 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% -80.00% ASCENDIS HEALTH LTD ASCENDIS BLUE HEALTH LABEL TELECOMS LTD LTD STEINHOFF INTERNATIONAL H NV RESILIENT REIT LTD BLUE LABEL ASPEN PHARMACARE TELECOMS HOLDINGS LT LT INTU PROPERTIES PLC MEDICLINIC INTERNATIONAL PLC STEINHOFF CORONATION FUND MANAGERS LTD OMNIA HOLDINGS LTD CURRO HOLDINGS RESILIENT RET TIGER BRANDS LTD LTD PIONEER FOODS GROUP LTD ARR OWHEAD PR OPERTIES LTD ASPEN PHARMACARE ZEDER INVESTMENTS LTD HO PAN AFRICAN RESOURCES PLC MTN GROUP LTD INTU PROPERTIES HAMMERSON PLC PLS HYPROP INVESTMENTS LTD MAS REAL ESTATE INC BARLOWORLD LTD DELTA PROPERTY FUND LTD CARTRACK HOLDINGS LTD AFROCENTRIC INVESTMENT CORPO DIS-CHEM PHARMACIES PTY LTD PEREGRINE HOLDINGS LTD CAPITAL & COUNTIES PROPERTIE RHODES FOOD GROUP PTY LTD MMI HOLDINGS LTD SUPER GROUP LTD NORTHAM PLATINUM LTD ASSORE LTD FINANCIERE RICHEMONT-DEP REC PPC LTD NAMPA K LTD LIBERTY TWO DEGREES AECI LTD DISCOVERY LTD SHOPRITE HOLDINGS LTD GROWTHPOINT PROPERTIES LTD BRIMSTONE INVESTMENT - N SHS ARCELORMITTAL SO UTH AFRICA CITY LODGE HOTELS LTD ADVTECH LTD HOSKEN CONS INVESTMENTS LTD LIBERTY HOLDINGS LTD ABSA GROUP LTD RCL FOODS LTD/SOUTH AFRICA AV I LTD VODACOM GROUP LTD REDEFINE PROPERTIES LTD ROYAL BAFOKENG PLATINUM LTD SANLAM LTD OCTODEC INVESTMENTS LTD AFRIMAT LTD EXXARO RESOURCES LTD LIFE HEALTHCARE GROUP HOLDIN PICK N PAY STORES LTD STENPROP LTD SASOL LTD HUDACO INDUSTRIES LTD KAP INDUSTRIAL HOLDINGS LTD MURRAY & ROBERTS FORTRESS REIT LTD-A MONDI LTD SOUTH32 LTD BHP GROUP PLC INVESTEC AUSTRALIA PROPERTY SUN INTERNATIONAL LTD ANGLO AMERICAN ADCOCK INGR HOLDINGS LTD PLC NETCARE LTD HARMONY GOLD MINING CO LTD CLOVER IMPALA INDUSTRIES PLATINUM HOLDINGS LTD LTD EMIRA PROPERTY FUND LTD MURRAY & ROBERTS HOLDINGS ANGLOGOLD BHP ASHANTI GROUP PLC LT ANGLO AMERICAN PLC CLOVER INDUSTRIES LTD ALLIED ELECTRONICS C ANGLOGOLD ASHANTI LTD ALLIED ELECTRONICS COR-A SHR Attribution Domestic The highest attribution over the past six months came from: Anglo Platinum: as the world s largest platinum producer, steady production increases of 3% coupled with strong growth in copper and diamond pricing contributed 1.42% of positive attribution. The share price was also aided by the sale of 33% in the Rustenburg platinum mine to BRP for USD $150 million. AngloGold Ashanti: shares increased from R140 to R190 per share in December when investors ran to the safety of gold; many investors sought safety as financial markets sold off and volatility increased. Impala: these shares rebounded after a bad year in which earnings had been down 80% year-on-year in August 2018. From this low point, the share price has materially improved. The largest contributors to negative attribution were the following: Standard Bank: the shares fell after the Nigerian Central bank unexpectedly demanded a $2.6 billion dollar refund over irregular foreign-exchange transactions for MTN. Methodical remains invested in the share through this mark-to-market loss. Aspen: the company announced the sale of its infant formula business but the price dropped after the sale price ($865m) was significantly lower than market expectations (circa $1.6 bn). Following Methodical s exit at R171.4 in Oct, the share price continued to fall to R134.8 by 31 Dec 2018. Intu Properties: this commercial property group was subject to a buy-out offer which collapsed in Nov 2018, leading to a 42% share price drop. Brexit is also having an effect on the group s overseas UK properties. Although the share has stablised at levels close to Methodical s exit price, the volatility has dampened upward momentum in the share.

METHODICAL EQUITY PRESCIENT FUND PORTFOLIO COMMENTARY Top 5 Contributors and Detractors 2.0% Top 5 Contributors and Detractors Total portfolio Attribition over 6 Months 1.5% 1.5% 1.4% 1.2% 1.0% 0.5% 1.0% 0.5% 0.7% 0.7% 0.4% 0.0% -0.5% -1.0% -1.5% 0.0% -0.5% -0.5% -0.5% -0.6% -0.7% -1.0% -1.5% -1.4% -2.0% Anglo Platinum Ltd Anglogold Ashanti Ltd Impala Platinum Holdings Ltd Telkom SA Ltd Capitec Bank Holdings Ltd Compagnie Financiere Richemont SA Depository Resilient REIT Limited Standard Bank Group Ltd Aspen Pharmacare Holdings Ltd Intu Properties Methodical Investment Management (Pty) Ltd is an Authorised Financial Services Provider FSP: 44480 Directors: Ross Reuvers, Edo Brasecke, Steven van Jaarsveld Contact Methodical Investment Management 58 Main Street Newlands, 7700 South Africa T. +27 21 200 5920 www.methodical.co.za Ross Reuvers M. +27 82 904 2670 T. +27 21 200 5989 E. ross@methodical.co.za Andrew Cormack M. +27 62 807 3879 T. +27 21 200 5987 E. andrew@methodical.co.za Disclosure: Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CIS s are traded at the ruling price and can engage in scrip lending and borrowing. The collective investment scheme may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. A schedule of fees, charges and maximum commissions is available on request from the Manager. There is no guarantee in respect of capital or returns in a portfolio. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. CIS prices are calculated on a net asset basis, which is the total value of all the assets in the portfolio including any income accruals and less any permissible deductions (brokerage, STT, VAT, auditor s fees, bank charges, trustee and custodian fees and the annual management fee) from the portfolio divided by the number of participatory interests (units) in issue. Forward pricing is used.