Key market performance drivers Monthly charts September 2017 1
Market returns concentration One-year returns ending: September-17 August-17 July-17 NASPERS NASPERS NASPERS ANGLO ANGLO ANGLO STANDARD BANK GP STANDARD BANK GP STANDARD BANK GP MTN GROUP FIRSTRAND BHPBILL Top 5 FIRSTRAND 76% Top 5 MTN GROUP 77% Top 5 SASOL 111% Top 6 BID CORPORATION LIMITED 79% Top 6 BHPBILL 82% Top 6 BID CORPORATION LIMITED 116% GLENCORE XSTRATA PLC CAPITEC FIRSTRAND BHPBILL SANLAM CAPITEC CAPITEC SHOPRIT VODACOM Top 10 SAPPI 91% Top 10 VODACOM 95% Top 10 SAPPI 128% BARWORLD SASOL BARWORLD NEPI ROCKCASTLE EXXARO MONDI LTD DISCOVERY LIMITED BARWORLD MONDI PLC MONDI LTD DISCOVERY LIMITED INVPLC SANLAM IMPERIAL PSG EXXARO NEPI ROCKCASTLE CLICKS GROUP LTD MR PRICE SAPPI NEDBANK CLICKS GROUP LTD BID CORPORATION LIMITED EXXARO KUMBA IRON ORE MONDI LTD DISCOVERY LIMITED Top 20 SHOPRIT 110% Top 20 PSG 115% Top 20 SANLAM 144% Remaining (Positive) 25% Remaining (Positive) 23% Remaining (Positive) 16% Negative (68 Shares) -35% Negative (66 Shares) -38% Negative (76 Shares) -60% Source: Barra, Deutsche Securities and Momentum Investments Market-cap weighted returns: 10 shares contributed 91% to the return of the SWIX, while 20 shares contributed 110% 2 investments
Active-index analysis One-year rolling active to August* 2017 15% 850% 10% Active outperforms 750% 650% 5% 550% 0% 450% 350% -5% 250% -10% Active underperforms 150% 50% -15% Feb-05 Feb-07 Feb-09 Feb-11 Feb-13 Feb-15 Feb-17-50% Active Equity managers - SWIX (12m rolling) Active Equity Managers Cumulative SWIX Cumulative Median of Active Equity Managers vs SWIX The median of the active equity managers underperformed the SWIX for the year ended August 2017 Source: Alexander Forbes SA Equity Manager Watch, INET BFA and Momentum Investments * Lagged by one month due to availability of data 3 investments
Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Active versus tracker: Cash One-year rolling average to August* 2017 15% 175% 10% Active outperforms 155% 135% 115% 95% 5% 75% 55% 0% Active underperforms 35% 15% -5% -5% -25% Active Cash managers - STeFI (12m rolling) Active Cash Managers Cumulative STeFI Cumulative Median of Active Money Market Managers vs SteFI Source: Alexander Forbes SA Money Market Manager Watch, INET BFA and Momentum Investments * Lagged by one month due to availability of data 4 investments
Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Active versus tracker: Bonds One-year rolling average to August* 2017 15% 200% 10% Active outperforms 150% 5% 100% 0% -5% 50% -10% Active underperforms 0% -15% -50% Active Bond managers - ALBI (12m rolling) Active Bond Managers Cumulative ALBI Cumulative Median of Active Bond Managers vs ALBI Source: Alexander Forbes SA Bond Manager Watch, INET BFA and Momentum Investments * Lagged by one month due to availability of data 5 investments
Dec-03 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16 Nov-16 Apr-17 Active versus tracker: Property One-year rolling average to August* 2017 15% 1350% 10% Active outperforms 1150% 5% 0% -5% 950% 750% 550% 350% -10% Active underperforms 150% -15% -50% Active Property managers - SAPY (12m rolling) Active Property Managers Cumulative SAPY Cumulative Median of Active Property Managers vs SAPY Source: Alexander Forbes SA Property Manager Watch, INET BFA and Momentum Investments * Lagged by one month due to availability of data 6 investments
Size Momentum Growth Quality Value Style returns for South Africa Data to September 2017 ZAR Styles One month to Sept 2017 Three months to Sept 2017 One year to Sept 2017 Three years to Sept 2017 Five years to Sept 2017 Ten years to Sept 2017 Twenty years to Sept 2017 Book to Price -0.99-3.89 2.16 0.15-1.90-1.87 2.40 Dividend Yield -0.47-0.53 6.03 3.49-0.05 2.54 4.83 Earnings Yield -0.59-1.95 7.57-0.98-1.16-0.30 2.89 Cash Flow Yield -2.78-1.08 9.09 3.87 0.94 0.01 3.52 Sales to Price -1.58-0.43 0.74 0.08-1.80-1.52 2.28 ROE -0.13 1.99 1.37-0.59-2.35 0.64-1.75 ROIC LT 1.52-0.82-2.02-0.15-1.77-0.61-2.52 Income to Sales 1.01 2.16 8.32-0.45 0.12 1.04-0.81 Low market beta 0.42-3.00 0.96 5.35 4.38-1.65 1.62 Low Debt/Equity 2.59 4.51 7.33-0.46 0.04-2.33-0.79 EBIT Margin Stability -0.77-5.18-12.72 2.46 1.23 2.99-0.95 Earnings Growth -0.25-1.12 10.22-0.15-0.69-2.18-0.99 Sales Growth 1.42-2.27-0.61-0.56-0.48 0.37 0.11 12M Earning Growth 1.99 1.96-6.84-2.68-1.85 0.72 5.32 FY1 Earnings Revisions 0.88 4.18 2.75 3.65 4.99 9.13 7.47 Short Term Momentum 0.10 2.75-6.76 2.15 1.27-0.21-1.86 Medium Term Momentum 1.88 0.28-9.25 0.35 3.79 3.79 6.19 Size -0.28 3.77 0.86-0.08-1.35 1.62-0.28 The Momentum and some quality factors had strong returns for the shorter term. For the three-year period, the momentum and some value factors had positive returns. Source: FactSet, Momentum Global Investment Management and Momentum Investments 7 investments
Sep 30, 2016 Nov 11, 2016 Dec 23, 2016 Feb 03, 2017 Mar 17, 2017 Apr 28, 2017 Jun 09, 2017 Jul 21, 2017 Sep 01, 2017 125 120 115 MSCI developed and emerging markets One year to September 2017 One year to September 2017 Developed markets = 16.1% Emerging markets = 19.9% SWIX = 8.3% 110 105 100 95 90 Three months to September 2017 Developed markets = 4.4% Emerging markets = 7.1% SWIX = 3.2% 85 Source: INET BFA, MSCI and Momentum Investments MSCI Developed Markets (USD) MSCI Emerging Markets (USD) SWIX (USD) 8 investments
Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 SA 10-year bond yields Five years to September 2017 11 10 9 8 7 6 SA 10 year bond yield 9 investments
May-01 Feb-02 Nov-02 Aug-03 May-04 Feb-05 Nov-05 Aug-06 May-07 Feb-08 Nov-08 Aug-09 May-10 Feb-11 Nov-11 Aug-12 May-13 Feb-14 Nov-14 Aug-15 May-16 Feb-17 Yield of R197 (inflation-linked bond) Since May 2001 to September 2017 7 6 5 4 3 2 1 0 R 197 10 investments
01-Oct-16 31-Oct-16 30-Nov-16 30-Dec-16 29-Jan-17 28-Feb-17 30-Mar-17 29-Apr-17 29-May-17 28-Jun-17 28-Jul-17 27-Aug-17 26-Sep-17 FTSE/JSE sectors One year to September 2017 120 115 One year to September 2017 Resources = 11.1% Financials = 7.0% Industrials = 11.5% 110 105 100 95 90 Three months to September 2017 Resources = 17.8% Financials = 5.1% Industrials = 7.4% 85 Resources Financials Industrials 11 investments
Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 FTSE/JSE sectors Rolling three-year return to September 2017 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% -10.00% -20.00% -30.00% Resources Financials Industrials Returns are annualised 12 investments
FTSE/JSE sectors Decomposed Three months to September 2017 1 Coal Mining Mining 35.3% 19 Platinum Mining Mining 1.9% 2 General Mining Mining 28.8% 20 Real Estate Investment Trusts Financials 1.9% 3 Industrial Metals Basic Materials 27.9% 21 General Financial Financials 1.2% 4 Industrial Transportation Industrials 17.8% 22 Construction & Materials Industrials 0.6% 5 Personal Goods Consumer Goods 16.0% 23 Support Services Industrials 0.1% 6 Media Consumer Services 15.0% 24 Food Producers Consumer Goods -1.0% 7 Real Estate Investment & Services Financials 10.0% 25 Equity Investment Instruments Financials -2.0% 8 Gold Mining Mining 9.9% 26 Fixed Line Telecommunications Telecommunication -3.7% 9 Non-life Insurance Financials 8.8% 27 Automobiles & Parts Consumer Goods -4.1% 10 Banks Financials 7.7% 28 Tobacco Consumer Goods -4.2% 11 Mobile Telecommunications Telecommunication 7.5% 29 Beverages Consumer Goods -5.4% 12 Forestry & Paper Basic Materials 7.0% 30 Travel & Leisure Consumer Services -5.7% 13 Life Insurance Financials 6.1% 31 Health Care Equipment & Services Health Care -6.9% 14 General Retailers Consumer Services 5.3% 32 Household Goods Consumer Goods -10.5% 15 Pharmaceuticals & Biotechnology Health Care 5.1% 33 Electronic & Electrical Equipment Industrials -11.0% 16 Food & Drug Retailers Consumer Services 4.9% 34 Industrial Engineering Industrials -12.2% 17 Chemicals Basic Materials 3.3% 35 Software & Computer Services Technology -16.1% 18 General Industrials Industrials 2.6% Key Resources Financials Industrials Source: Barra, Deutsche Securities and Momentum Investments 13 investments
FTSE/JSE sectors Decomposed One year to September 2017 1 Coal Mining Mining 54.3% 19 Equity Investment Instruments Financials 1.4% 2 Personal Goods Consumer Goods 50.6% 20 Chemicals Basic Materials 1.3% 3 Industrial Metals Basic Materials 39.2% 21 General Financial Financials 0.3% 4 General Mining Mining 30.1% 22 Tobacco Consumer Goods -0.2% 5 Forestry & Paper Basic Materials 29.4% 23 General Retailers Consumer Services -0.9% 6 Media Consumer Services 23.2% 24 Pharmaceuticals & Biotechnology Health Care -1.8% 7 Non-life Insurance Financials 18.8% 25 Electronic & Electrical Equipment Industrials -2.4% 8 Support Services Industrials 14.6% 26 Food Producers Consumer Goods -3.5% 9 Industrial Transportation Industrials 13.7% 27 Automobiles & Parts Consumer Goods -6.3% 10 Real Estate Investment & Services Financials 13.3% 28 Industrial Engineering Industrials -8.2% 11 Banks Financials 13.0% 29 Beverages Consumer Goods -19.1% 12 Mobile Telecommunications Telecommunication 11.0% 30 Household Goods Consumer Goods -21.0% 13 Food & Drug Retailers Consumer Services 10.4% 31 Software & Computer Services Technology -22.8% 14 Life Insurance Financials 5.3% 32 Health Care Equipment & Services Health Care -27.8% 15 Fixed Line Telecommunications Telecommunication 4.6% 33 Travel & Leisure Consumer Services -28.5% 16 Real Estate Investment Trusts Financials 3.2% 34 Gold Mining Mining -36.3% 17 General Industrials Industrials 2.5% 35 Platinum Mining Mining -37.3% 18 Construction & Materials Industrials 1.9% Key Resources Financials Industrials Source: Barra, Deutsche Securities and Momentum Investments 14 investments
01-Oct-16 31-Oct-16 30-Nov-16 30-Dec-16 29-Jan-17 28-Feb-17 30-Mar-17 29-Apr-17 29-May-17 28-Jun-17 28-Jul-17 27-Aug-17 26-Sep-17 FTSE/JSE market caps One year to September 2017 115 110 One year to September 2017 SWIX 40 = 7.8% Mid Cap = -2.8% Small Cap = -0.1% 105 100 95 90 Three months to September 2017 SWIX 40 = 7.9% Mid Cap = 3.8% Small Cap = 3.0% 85 SWIX 40 Mid Cap Small Cap 15 investments
01-Jul-17 11-Jul-17 21-Jul-17 31-Jul-17 10-Aug-17 20-Aug-17 30-Aug-17 09-Sep-17 19-Sep-17 29-Sep-17 Local asset classes Three months to September 2017 109 107 7.0% 5.7% 105 103 101 3.7% 1.8% 1.2% 99 97 95 SWIX ALBI STeFI SA Listed Property ILB 16 investments
01-Jul-17 11-Jul-17 21-Jul-17 31-Jul-17 10-Aug-17 20-Aug-17 30-Aug-17 09-Sep-17 19-Sep-17 29-Sep-17 Global asset classes Three months to September 2017 109 8.3% 107 105 103 6.0% 4.8% 4.7% 3.7% 101 99 97 95 Global Bonds Global Property Global ILB Global Equity USD/ZAR 17 investments
01-Oct-16 31-Oct-16 30-Nov-16 30-Dec-16 29-Jan-17 28-Feb-17 30-Mar-17 29-Apr-17 29-May-17 28-Jun-17 28-Jul-17 27-Aug-17 26-Sep-17 Local asset classes One year to September 2017 115 110 105 9.5% 8.2% 7.6% 7.0% 4.6% 100 0.3% 95 90 SWIX ALBI STeFI SA Listed Property ILB CPI *CPI is lagged by one month due to availability of inflation data 18 investments
01-Oct-16 29-Oct-16 26-Nov-16 24-Dec-16 21-Jan-17 18-Feb-17 18-Mar-17 15-Apr-17 13-May-17 10-Jun-17 08-Jul-17 05-Aug-17 02-Sep-17 Global asset classes One year to September 2017 120 115 14.5% 110 105 100 95-1.2% -1.3% -3.5% -4.4% 90 85 80 Global Bonds Global Property Global ILB Global Equity USD/ZAR 19 investments
Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Local asset classes Five years to September 2017 195 12.8% 12.7% 145 6.4% 6.3% 5.7% 5.6% 95 SWIX ALBI STeFI SA Listed Property ILB CPI *CPI is lagged by one month due to availability of inflation data 20 investments
Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Global asset classes Five years to September 2017 290 240 20.0% 190 14.4% 11.5% 10.3% 9.8% 140 90 Global Bonds Global Property Global ILB Global Equity USD/ZAR 21 investments
Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Asset classes Ten years to September 2017 360 13.9% 310 260 210 160 10.6% 10.3% 9.2% 9.2% 8.4% 7.2% 7.0% 6.0% 110 60 Global Bonds SWIX ALBI STeFI SA Listed Property USD/ZAR ILB CPI Global Equity For the 10-year period to September 2017, the FTSE/JSE SA Listed Property continued to outperform, followed by the SWIX and global bonds *CPI is lagged by one month due to availability of inflation data 22 investments
03-Oct-16 31-Oct-16 28-Nov-16 26-Dec-16 23-Jan-17 20-Feb-17 20-Mar-17 17-Apr-17 15-May-17 12-Jun-17 10-Jul-17 07-Aug-17 04-Sep-17 Exchange rate Exchange rates One year to September 2017 24 22 Three months to September 2017: Sterling-Rand: 6.2% Euro-Rand: 7.3% Dollar-Rand: 3.7% 20 18 2.5% 16 3.8% 14-1.2% 12 10 8 Sterling-Rand Euro-Rand Dollar-Rand 23 investments
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Gold (rands), FTSE/JSE SWIX, CPI, SteFI One-year rolling returns to September 2017 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% -40.00% Gold (ZAR) CPI SteFI SWIX *CPI is lagged by one month due to availability of inflation data 24 investments
01-Jul-17 11-Jul-17 21-Jul-17 31-Jul-17 10-Aug-17 20-Aug-17 30-Aug-17 09-Sep-17 19-Sep-17 130 Commodities Three months to September 2017 125 120 16.4% 115 110 105 100 95 11.2% 9.8% 5.0% 3.0% -1.6% -4.5% 90 Brent Spot (Oil) Gold Iron Copper Palladium Platinum Reuters/Jeffries CRB Commodities Source: INET BFA, FT.com and Momentum Investments All returns in dollar terms 25 investments
01-Oct-16 31-Oct-16 30-Nov-16 30-Dec-16 29-Jan-17 28-Feb-17 30-Mar-17 29-Apr-17 29-May-17 28-Jun-17 28-Jul-17 27-Aug-17 26-Sep-17 Commodities One year to September 2017 170 160 150 140 130 120 110 100 90 34.2% 29.5% 13.6% 11.1% -1.0% -2.6% -11.2% 80 70 Brent Spot (Oil) Gold Iron Copper Palladium Platinum Reuters/Jeffries CRB Commodities Source: INET BFA, FT.com and Momentum Investments All returns in dollar terms 26 investments
Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 SAVI VIX SAVI-VIX Since February 2007 to September 2017 60 55 50 45 40 Financial / credit crisis European debt crisis (Sovereign debt concerns) S&P downgrade US debt Renewed fears about euro zone debt Fed advises of potential tapering of QE 3 Brexit Uncertainty around US rate hikes US Elections /SA downgrade concerns 85 75 65 55 35 45 30 35 25 20 25 15 15 10 5 SAVI VIX 27 investments
Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 R(m) Foreign transactions 2013 to 2017 30,000 20,000 10,000 0-10,000-20,000-30,000 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Foreign Transactions Bonds Foreign Transactions Equities Rand/USDollar Exchange Rate 28 investments
December January February March April May June July August September October November December Cumulative foreign transaction equities 2012 to 2017 60000 40000 20000 0-20000 -40000-60000 -80000-100000 -120000-140000 2012 2013 2014 2015 2016 2017 29 investments
December January February March April May June July August September October November December Cumulative foreign transaction bonds 2012 to 2017 100000 80000 60000 40000 20000 0-20000 -40000-60000 -80000 2012 2013 2014 2015 2016 2017 30 investments
End of key market performance drivers monthly charts for September 2017 31 investments
Thank you 32 investments
Disclaimer 33 investments