The Coronation Client Charter We strive to always put clients first - - PowerPoint PPT Presentation

The Coronation Client Charter

We strive to always put clients first We have an unwavering commitment to the long term We focus on producing top performance over all meaningful periods We are uncompromising about ethics

Peter Kempen March 2019 A presentation prepared for the Allan Gray Fund Provider roadshow

Financial planning challenges in 2019

FINANCIAL PLANNING CHALLENGES

Regulatory environment Disappointing returns Growth-asset dilemma Discretionary savers Retirement crunch Looking forward

5

How was your year?

Regulatory environment in 2019

7

So, what’s changed in your business?

2001 CGT introduced in SA 2002 CISCA More powers to the FSB to make rules FAIS Fit & proper, compliance, exams , ombud 2003 TER Total expense ratio disclosure introduced 2004 Retirement reform DP Reduce costs, increase access FSC Voluntary empowerment framework agreed 2005 FAIS New rules for compliance & auditor reporting to FSB 2006 FAIS Fit & Proper requirements tightened up 2007 Retirement fund reform NSSF formally on the agenda 2008 GFC Global Financial Crisis leads to step-change in regulatory intent 2009 FAIS PI cover requirements tightened up FAIS Capital adequacy rules expanded 2010 Reg 28 overhauled; requires member-level compliance Retirement fund reform Industry consolidation process starts 2011 Red Book Initiative New regulatory framework proposed Living annuities Disclosure campaign to make DDs more sustainable CISCA First regulations for white-labelled funds 2012 Retirement fund reform NSSF DP published Retirement fund reform Phasing out of provident funds proposed 2013 Retirement fund reform 4x detailed Treasury DPs BBBEE Act adopted: Generic codes now binding DWT Introduction of divdend withholding tax announced 2014 Retail Distribution Review First DP published Retirement fund reform Cap on contr. deduction introduced TCF DP launched introducing outcomes principles 2015 TFSA/TFI New tax-free savings vehicle introduced Retirement fund reform Phasing out of provident funds postponed CISCA Hedge funds declared CIS 2016 Retirement fund reform 2012 NSSF DP issued 2nd time Retirement fund reform Phasing out of provident funds postponed EAC Industry-wide standardised total cost of ownership disclosure 2017 Parliamentary hearings on transformation Retirement fund reform Phasing out of provident funds postponed FAIS New Fit & Proper Rules FSC Revised BEE code adopted 2018 FSR Sets framework for FSCA & PA Retirement fund reform Phasing out of provident funds postponed FAIS New General Code of Conduct 2019 Retirement fund defaults Effective March 2019 COFI Draft bill circulated for comment RDR Awaiting DP on categorisation of advisers, investment issues

SELECTED REGULATORY INTERVENTIONS, 2001-2019

8

Retirement fund defaults

Still in consultation as at 1 March 2019

– Member guidance

• Tell members what their options & trade-offs are before they access their retirement capital
• Likely written / web-based communication as the most typical option

– Trustee-endorsed opt-in annuity strategy

• FSCA Conduct Standard for Living Annuities
• Requirements: Suitable, reasonable cost
• Prescribed, age-related drawdown rates
• Member opts out by
• Transferring
• Choosing own drawdown or assets
• Likelihood is that most trustees will implement

conservatively

Source of current financial planning anxiety

10

Annus horribilis

2018 was the worst year on record – even worse than 1920 63 of 70 assets globally ended with negative dollar returns Only 7 assets with positive returns

– T-Bills – China, US, Korea, Japan and Thailand bonds – Wheat (only commodity)

Not a single equity market had a positive return

Source: Deutsche Bank (end 2018) Percentage of assets with a negative return in US dollar terms

11

Negative returns were broad-based

Only resources provided any reprieve

0%

• 7%
• 26%

13%

• 13%
• 18%
• 19%

55%

• 35%
• 2%

0% 0%

• 2%
• 12%
• 44%

9%

• 7%
• 8%

6%

• 39%
• 6%

8%

• 50%
• 1%
• 7%
• 12%
• 13%

4% 4% 4%

• 9%
• 3%

42%

• 3%
• 10%
• 12%
• 15%

13%

• 5%
• 40%
• 5%

3%

• 31%

2%

• 4%

2% 32%

• 15%

28%

• 16%
• 60%
• 40%
• 20%

0% 20% 40% 60% 80%

Pick N Pay Stores / Holdings Investec Ltd Barloworld Ltd Impala Platinum Holdings Ltd Glencore Xstrata Plc RMI Holdings Reinet Investments Sca Anglo American Platinum Ltd Fortress REIT Ltd AVI Limited Exxaro Resources Ltd Life Healthcare Group Holdings Truworths International Ltd The Foschini Group Ltd NEPI Rockcastle PLC Netcare Ltd Gold Fields Limited PSG Group Spar Group Ltd Tiger Brands Ltd Sappi Ltd Clicks Group Ltd Aspen Phamacare Holdings Ltd Redefine Income Fund Investec Plc Woolworths Holdings Ltd Discovery Holdings Ltd RMB Holdings Ltd Capitec Bank Holdings Ltd Mr Price Group Ltd Growthpoint Properties Ltd Bidvest Group Ltd ANGLOGOLD ASHANTI HOLDINGS Vodacom Group BID CORP LTD Shoprite Holdings Ltd Remgro Ltd Nedbank Group Ltd Absa Group Ltd British American Tobacco Plc Sanlam Mondi MTN Group Ltd Firstrand Limited Standard Bank of SA Ltd Sasol Ltd Anglo American Plc Compagnie Financiere Richemont BHP Group PLC Naspers Ltd

Top 50 Source: Bloomberg (end 2018)

12

Coming after a miserable few years

There’s just no sugar-coating it…

2018 was preceded by several mediocre years

– 5-year real returns are now c.0% for both SA equity & property – If the JSE flat-lines to June 2019 - then 5-year nominal equity returns will be zero

• 5% p.a. (-23% cumulative) in real terms

Life has been really tough for clients

– Day-to-day life in SA not easy

• Ramaphoria evaporated as realities of SA challenges exposed through the year
• Land debate creating anxiety over property rights
• Emigration quoted as reason for selling your home rose threefold to 9% (from five years ago)

– Unlike previous tough cycles the rand didn’t weaken enough to insulate rand returns

• Ugly combination of low investment returns & stubborn inflation (negative jaws)
• Resulting in ever-rising draw-down rates for living annuities as markets go nowhere

13

We are on the verge of making history

BEAR MARKET OF THE 70s EM CRISIS DOMESTIC RECESSION FINANCIAL CRISIS WEAK MARKET OF EARLY 90s PRE DEMOCRACY

Rolling 5 year SA equity returns

We are 6 months away from testing zero…

14

Savings industry under stress

We can all take a challenging year or two But 5 tough years is historically rare and has put our industry into stress Clients are losing faith in

– The growth asset classes (equity & property) – Active management – South African assets – Market-linked living annuities

We get it

Growth asset dilemma

16

Coronation Strategic Income Coronation Balanced Defensive A Coronation Capital Plus Coronation Balanced Plus Coronation Strategic Income Coronation Balanced Defensive A Coronation Capital Plus Coronation Balanced Plus Strategic Income Balanced Defensive Capital Plus Balanced Plus

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2018 2016 10 Year Coronation Strategic Income Coronation Balanced Defensive A Coronation Capital Plus Coronation Balanced Plus Strategic Income Balanced Defensive Capital Plus Balanced Plus

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 2018 2016 10 Year

An inverted risk curve

The recent past vs the LT history

Strategic Income Balanced Defensive Capital Plus Balanced Plus

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 14% 2018 2016 10 Year INDUSTRY SWITCHING DOWN THE RISK CURVE

17

And flows continue to track ST performance

Last 10 year returns vs flows in Balanced Plus

As at 31 January 2019. Source: Morningstar

• R1,000
• R500

R0 R500 R1,000 R1,500 R2,000

• 20%
• 10%

0% 10% 20% 30% 40% Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Millions Total Net Flows (RHS) Balanced Plus rolling 12-month return

A sure way to erode wealth over time

18

Meeting financial planning assumptions

Coronation Balanced Plus to 31 December 2018

Source: Morningstar, Coronation research as at 31 December 2018

0% 2% 4% 6% 8% 10% 12% 14% 16% 2014 2013 2012 2011 2010 2009 Actual return Required return to make 10 year assumption Required return to make 20 year assumption 45% of the time Avg fund: 27% of the time 75% of the time Avg fund: 57%

19

Coronation Balanced Plus – absolute terms

Start End # of Months drawdown Subsequent 1 year Subsequent 3 years Subsequent 5 years Largest drawdown May 1998 Aug 1998 4

• 34,3%

29,1% 68,9% 94,4% 2nd largest drawdown Nov 2007 Feb 2009 16

• 16,8%

34,7% 71,8% 154,5% 3rd largest drawdown June 2002 March 2003 10

• 12,2%

35,7% 156,5% 246,1% 4th largest drawdown Feb 2000 May 2000 4

• 8,8%

24,9% 34,8% 132,9% 5th largest drawdown Sep 2018 Dec 2018 4

• 7,8%

Average 11

• 16,0%

24,9% 66,4% 125,6%

Source: Morningstar, Coronation Research

Start End # of Months drawdown Subsequent 1 year Subsequent 3 years (p.a) Subsequent 5 years (p.a) Largest drawdown May 1998 Aug 1998 4

• 34,3%

29,1% 19,1% 14,2% 2nd largest drawdown Nov 2007 Feb 2009 16

• 16,8%

34,7% 19,8% 20,5% 3rd largest drawdown June 2002 March 2003 10

• 12,2%

35,7% 36,9% 28,2% 4th largest drawdown Feb 2000 May 2000 4

• 8,8%

24,9% 10,5% 18,4% 5th largest drawdown Sep 2018 Dec 2018 4

• 7,8%

Average 11

• 16,0%

24,9% 21,6% 20,3%

20

Coronation Top 20 – relative to benchmark

Start End # of Months Relative to benchmark Subsequent 1 year relative Following 3 years relative Following 5 years relative Largest drawdown Feb 2007 June 2008 17

• 25,7%

30,2% 48,7% 72,9% 2nd largest drawdown Oct 2013 Dec 2015 27

• 22,9%

14,3% 9,3% 3rd largest drawdown Sep 2005 Sep 2006 13

• 14%

4,2% 34,1% 48,4% 4th largest drawdown Nov 2017 Dec 2018 14

• 7,4%

5th largest drawdown Sep 2009 Nov 2009 3

• 5,9%

5,2% 11,3% 25,2% Average 15

• 15,2%

13,5% 25,9% 48,8%

Source: Morningstar, Coronation Research

Opportunity for discretionary savers

22

Rand cost averaging: the positive side to lower prices

A 20-year study

0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500%

Percentage Change on Invested Capital

̴ 4 years ̴ 4 years ̴ 4 years

Source: Bloomberg, Coronation Research as at 31 December 2018

23

Rand cost averaging: the positive side to lower prices

A 20-year study

0.000 0.002 0.004 0.006 0.008 0.010 0.012 0.014 0.016 0.018 0.020 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Number of shares that R100 p.m. can buy on the JSE

Source: Bloomberg, Coronation Research as at 31 December 2018

24

20000 40000 60000 80000 100000 120000 140000

How much was invested vs how much it’s worth

Portfolio Growth Amount invested

Rand cost averaging: the positive side to lower prices

A 20-year study

Source: Bloomberg, Coronation Research as at 31 December 2018

25

Remember: Equities deliver spectacularly over the LT

Real returns – Jan 1930

As at 31 December 2018 | Source: Coronation

538 times your money vs <4 in bonds

26

As one extends time horizon the peaks & valleys smooth themselves out

• 60%
• 40%
• 20%

0% 20% 40% 60% 80% 100% 120% 140% Jan-70 Jan-74 Jan-78 Jan-82 Jan-86 Jan-90 Jan-94 Jan-98 Jan-02 Jan-06 Jan-10 Jan-14 Jan-18

1 year 3 years 5 years 10 years

Rolling return of SA equity over varying periods

Retirement crunch

28

29

But the birthdate lottery made things challenging

6% initial drawdown increasing at 6% p.a. (5 years)

Source: Morningstar, Coronation Research, as at 31 December 2018

Remember the birthdate lottery? Slide from 2014

31

Looking forward – all is not lost

Changing your risk profile could exacerbate the issue

Source: Morningstar, Coronation Research, as at 31 December 2018

0% 2% 4% 6% 8% 10% 12% 14% R500,000 R600,000 R700,000 R800,000 R900,000 R1,000,000 R1,100,000 R1,200,000 R1,300,000 Dec 13 Apr 14 Aug 14 Dec 14 Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug 17 Dec 17 Apr 18 Aug 18 Dec 18 Apr 19 Aug 19 Dec 19 Apr 20 Aug 20 Dec 20 Apr 21 Aug 21 Dec 21 Apr 22 Aug 22 Dec 22 Apr 23 Aug 23 Dec 23 Apr 24 Aug 24 Dec 24 Apr 25 Aug 25 Dec 25 Apr 26 Aug 26 Dec 26 Apr 27 Aug 27 Dec 27 Apr 28 Aug 28 Dec 28

Capital Plus Strategic Income De-risking Capital Plus withdrawal as % Strat Income withdrawal as %

Forecast Capital Plus: 11% p.a. Strat Income: 8% p.a.

32

Looking forward – all is not lost

Changing your risk profile could exacerbate the issue

Source: Morningstar, Coronation Research, as at 31 December 2018

0% 2% 4% 6% 8% 10% 12% 14% R500,000 R600,000 R700,000 R800,000 R900,000 R1,000,000 R1,100,000 R1,200,000 R1,300,000 Dec 13 Apr 14 Aug 14 Dec 14 Apr 15 Aug 15 Dec 15 Apr 16 Aug 16 Dec 16 Apr 17 Aug 17 Dec 17 Apr 18 Aug 18 Dec 18 Apr 19 Aug 19 Dec 19 Apr 20 Aug 20 Dec 20 Apr 21 Aug 21 Dec 21 Apr 22 Aug 22 Dec 22 Apr 23 Aug 23 Dec 23 Apr 24 Aug 24 Dec 24 Apr 25 Aug 25 Dec 25 Apr 26 Aug 26 Dec 26 Apr 27 Aug 27 Dec 27 Apr 28 Aug 28 Dec 28

Capital Plus Strategic Income De-risking Capital Plus withdrawal as % Strat Income withdrawal as %

Forecast Capital Plus: 12% p.a. Strat Income: 8% p.a.

33

How achievable is 11%+ in a post-retirement portfolio?

Asset class Weight Expected asset class return Alpha Assumed net return SA equities & property 40% 10,5% 2,5% 13% Fixed interest 35% 8% 1% 9% Offshore 25% 8% 2% 10% Total 100% 11%

Mid-point assumptions

34

How achievable is 11%+ in a post-retirement portfolio?

Asset class Weight Expected asset class return Alpha Assumed net return SA equities & property 40% 12% 2,5% 14,5% Fixed interest 35% 9% 1% 10% Offshore 25% 9% 2% 11% Total 100% 12%

Upper-end assumptions

35 As at 31 December2018 | Source: Coronation

Asset allocation is the most important decision you make in investments

Better forward looking forecasts than you have seen from us in 5 years!! Last 10 years p.a. (ZAR) 10 year forecast p.a. (ZAR) Local equity 13.0% 9 – 12% Global equity 14.7% 7 – 9% Local property 11.0% 9 - 12% Local bonds 7.7% 8 - 9% Global bonds 6.8% 4 - 6% Cash 6.4% 6 - 7% Inflation 5.4% 5 - 6%

Expected asset class returns

Looking forward

37

Relentless sideways grind in hard currencies...

50 75 100 125 150 175 200 225 250 Dec 2010 Feb 2011 Apr 2011 Jun 2011 Aug 2011 Oct 2011 Dec 2011 Feb 2012 Apr 2012 Jun 2012 Aug 2012 Oct 2012 Dec 2012 Feb 2013 Apr 2013 Jun 2013 Aug 2013 Oct 2013 Dec 2013 Feb 2014 Apr 2014 Jun 2014 Aug 2014 Oct 2014 Dec 2014 Feb 2015 Apr 2015 Jun 2015 Aug 2015 Oct 2015 Dec 2015 Feb 2016 Apr 2016 Jun 2016 Aug 2016 Oct 2016 Dec 2016 Feb 2017 Apr 2017 Jun 2017 Aug 2017 Oct 2017 Dec 2017 Feb 2018 Apr 2018 Jun 2018 Aug 2018 Oct 2018 Dec 2018

ALSI (ZAR) ALSI (USD)

Source: Bloomberg, as at 31 December 2018

38

…has resulted in upside not seen since 2009

• 20.0%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Aug-07 Dec-08 May-10 Sep-11 Jan-13 Jun-14 Oct-15 Mar-17 Jul-18

CAM Forecasts - SA Inc Upside to FV

Upside

• 25.0%
• 5.0%

15.0% 35.0% 55.0% 75.0% 95.0% Aug-07 Aug-09 Aug-11 Aug-13 Aug-15 Aug-17

CAM Forecasts - Global SA stocks Upside to FV

Upside

39

• 20%
• 10%

0% 10% 20% 30% 40% 50% 60% 70% 80%

• 10%
• 5%

0% 5% 10% 15% 20% 25% 30% 35% 40% Jun 06 Oct 06 Feb 07 Jun 07 Oct 07 Feb 08 Jun 08 Oct 08 Feb 09 Jun 09 Oct 09 Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Jun 14 Oct 14 Feb 15 Jun 15 Oct 15 Feb 16 Jun 16 Oct 16 Feb 17 Jun 17 Oct 17 Feb 18 Jun 18 Oct 18

Upside to FV (RHS) Following 24 months return (p.a.) Following 36 months return (p.a.)

Upside as an indicator of future returns

Coronation Top 20 Fund

Source: Morningstar and Coronation Research as at January 2019

40

History shows that this is a good time to invest

20 40 60 80 100 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 7.5-10 10-12.5 12.5-15 15-17.5 above 17.5

Coronation Balanced Plus total return over 12 months based on starting PE

Mean Maximum # Observations

Source: Bloomberg, as at 31 December 2018

41

History shows that this is a good time to invest

Source: Bloomberg, as at 31 December 2018

10 20 30 40 50 60 70 80 90 100

0% 5% 10% 15% 20% 25% 30% 7.5-10 10-12.5 12.5-15 15-17.5 above 17.5

Coronation Balanced Plus total return over 60 months based on starting ALSI PE

Mean Maximum # Observations

42

Valuation is strongly on your side

Name Upside to fair value FPE FDY PE 3 years ago British American Tobacco 83% 8.0 8.3% 16.1 Naspers 74% 16.5 n/a 32.0 Anheuser Busch Inbev 45% 14.4 2.9% 22 Northam 104% 10.0 n/a 12.1 Anglo American 46% 9.1 4.5% n/a Aspen 80% 8.3 2.5% 16.1

P/E’s and Dividend yields are crude measures of value, but they give one a sense

43

Conclusion

The 2019 challenge is dominated by low returns of the recent past. Financial planning assumptions are under water. With low returns and failed financial planning assumptions come difficult client conversations and increased behavioral risks. You do not require heroic returns going forward to get back on track. It is tough, but there are silver linings to focus on.

Thank you

DISCLAIMER

45

All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. As a result thereof, there may be limitations as to the appropriateness of any information given. It is therefore recommended that the client/potential investor first obtain the appropriate legal, tax, investment or other professional advice and formulate an appropriate investment strategy that would suit the risk profile of the client/potential investor prior to acting upon information. Neither Coronation Fund Managers Limited, Coronation Management Company (RF) (Pty) Ltd nor any other subsidiary of Coronation Fund Managers Limited (collectively “Coronation”) is acting, purporting to act and nor is it authorised to act in any way as an advisor. Coronation endeavours to provide accurate and timely information but we make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. Coronation does not undertake to update, modify or amend the information on a frequent basis or to advise any person if such information subsequently becomes inaccurate. Any representation or opinion is provided for information purposes only. Unit trusts should be considered a medium- to long-term investment. The value of units may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance. Unit trusts are allowed to engage in scrip lending and borrowing. Performance is calculated by Coronation for a lump sum investment with income distributions reinvested. All underlying price and distribution data is sourced from Morningstar. Performance figures are quoted after the deduction of all costs (including manager fees and trading costs) incurred within the fund. Note that individual investor performance may differ as a result of the actual investment date, the date of reinvestment of distributions and dividend withholding tax, where applicable. Where foreign securities are included in a fund it may be exposed to macroeconomic, settlement, political, tax, reporting or illiquidity risk factors that may be different to similar investments in the South African markets. Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. The Coronation Money Market fund is not a bank deposit account. The fund has a constant price, and the total return is made up of interest received and any gain or loss made on any particular instrument, in most cases the return will merely have the effect of increasing or decreasing the daily yield, but in the case of abnormal losses it can have the effect of reducing the capital value of the portfolio. Excessive withdrawals could place the fund under liquidity pressures, in such circumstances a process of ring-fencing of redemption instructions and managed pay-outs over time may be followed. A fund of funds invests in collective investment schemes that levy their own fees and charges, which could result in a higher fee structure for this fund. A feeder fund invests in a single fund of a collective investment scheme, which levies its own charges and could result in a higher fee structure for the feeder fund. Coronation Management Company (RF) (Pty) Ltd is a Collective Investment Schemes Manager approved by the Financial Services Board in terms of the Collective Investment Schemes Control Act. Unit trusts are traded at ruling prices set on every trading day. Fund valuations take place at approximately 15h00 each business day, except at month end when the valuation is performed at approximately 17h00 (JSE market close). Forward pricing is used. Additional information such as fund prices, brochures, application forms and a schedule of fund fees and charges is available on our website, www.coronation.com. Coronation Fund Managers Limited is a Full member of the Association for Savings & Investment SA (ASISA). Coronation Asset Management (Pty) Ltd (FSP 548) and Coronation Investment Management International (Pty) Ltd (FSP 45646) are authorised financial services providers.

FAIS REQUIREMENTS

46

CORONATION ASSET MANAGEMENT (PTY) LTD Registration No. 1993/002807/07 Herein after referred to as ‘Coronation’ INFORMATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT Coronation is a licensed Category II and Category IIA Financial Services Provider in terms of section 8 of the Financial Advisory and Intermediary Services Act 37, 2002 (licence number 548). Coronation is not authorised to provide advice in terms of the Financial Advisory and Intermediary Services Act 37, 2002. Coronation has been authorised to render discretionary intermediary services. Coronation is authorised to provide financial services for the following financial products: Long-Term Insurance : Category C; Pension Funds Benefits (excluding retail pension benefits); Securities and Instruments : Shares; Securities and Instruments : Money market instruments; Securities and Instruments : Debentures and securitised debt; Securities and Instruments : Warrants, certificates and other instruments; Securities and Instruments : Bonds; Securities and Instruments : Derivative instruments; Participatory interests in Collective Investment Schemes; Short Term Deposits; Long Term Deposits Coronation is a licensed Hedge Fund Financial Services Provider. The following exemptions are applicable to the licence: Exemption of investment managers and linked investment services providers and their related functionaries from fit and proper requirements (Board Notice 97 of 2003). Exemption of financial services providers as regards to representatives (Board Notice 95 of 2003). The following employees have been appointed as Key Individuals and/or Authorised Representatives: Key individuals Anton Pillay; Karl Leinberger; Kirshni Totaram; Neville Chester; John Snalam; Louis Stassen; Llewellyn Smith Authorised representatives Adrian van Pallander; Hendrik Groenewald; Alistair Lea; Karl Leinberger; Anton de Goede; Kirshni Totaram; Pranay Chagan; Quinton Ivan; Charles de Kock; Sarah-Jane Morley (married Alexander); Dirk Kotzé; Sean Morris; Duane Cable; Mark le Roux; Louis Stassen; Neill Young; Siphamandla Shozi; Gavin Joubert; Neville Chester; Stephen Peirce; Pallavi Ambekar; Suhail Suleman; Peter Leger; Tracy Burton; Nishan Maharaj; Nicholas Hops; Steve Janson; Mauro Longano; Harry Moolman; Alex Dearman; Gus Robertson; Sinovuyo Ndaleni (supervised), Greg Longe (supervised); Adrian Zetler; Kanyane Matlou (supervised); Neil Padoa (supervised); Nicholas Stein; Anthony Gibson, Seamus Vasey (supervised), Liesl Abrahams (supervised); Steven Barber (supervised); Humaira Surve (supervised); Godwill Chahwahwa; Joseph Taboola (supervised) All Key Individuals and Representatives meet the fit and proper requirements as set out in the Board Notices to the Financial Advisory and Intermediary Services Act 37, 2002. Coronation holds professional indemnity and fidelity insurance cover as stipulated in the General Code of Conduct and Board Notices to the Financial Advisory and Intermediary Services Act 37, 2002. Coronation accepts responsibility for its actions and the actions of its authorised representatives in rendering the financial services. Any information disclosed to any of Coronation’s Authorised Representatives in their professional capacity will be treated as confidential unless written consent is obtained to disclose such information, or the disclosure of such information is required in the public interest or under a particular law. The appointed Compliance Officers are: Jamie Rowland Stephan Kemp Tel: 021 680 2809 021 680 7703 Fax: 021 680 2859 021 680 7753 Cell: 082 434 4622 082 351 2401 E-mail: jrowland@coronation.com skemp@coronation.com Coronation’s Conflicts of Interest Management Policy, in terms of General Code of Conduct Regulations issued in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002, is available on Coronation’s website, www.coronation.com, or on request from the Compliance Officer. All complaints are taken seriously and Coronation’s aim is to ensure that all complaints are investigated and addressed in a timely and fair manner. To lodge a complaint, please contact either your Fund Manager or one of the compliance officer’s listed above.

FAIS REQUIREMENTS

47 CORONATION INVESTMENT MANAGEMENT INTERNATIONAL (PTY) LTD Registration No. 2014/111656/07 Herein after referred to as ‘Coronation’ INFORMATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT Coronation is a licensed Category II Financial Services Provider in terms of section 8 of the Financial Advisory and Intermediary Services Act 37, 2002 (licence number 45646). Coronation is not authorised to provide advice in terms of the Financial Advisory and Intermediary Services Act 37, 2002. Coronation has been authorised to render discretionary intermediary services. Coronation is authorised to provide financial services for the following financial products: Long-Term Insurance : Category C; Pension Funds Benefits (excluding retail pension benefits); Securities and Instruments : Shares; Securities and Instruments : Money market instruments; Securities and Instruments : Debentures and securitised debt; Securities and Instruments : Warrants, certificates and other instruments; Securities and Instruments : Bonds; Securities and Instruments : Derivative instruments; Participatory interests in Collective Investment Schemes; Short Term Deposits; Long Term Deposits The following exemptions are applicable to the licence: Exemption on Services under Supervision in terms of Requirements and Conditions obtaining experience (Board Notice 104 of 2008). Exemption of licensees as regards display certified copies of licenses (Board Notice 40 of 2004). The following employees have been appointed as Key Individuals and/or Authorised Representatives: Key individuals Louis Stassen Authorised representatives Louis Stassen; Gus Robertson; Gavin Joubert; Karl Leinberger; Kirshni Totaram; Peter Leger; Stephen Peirce; Suhail Suleman; Greg Longe (supervised); Neil Padoa (supervised); Anthony Gibson, Liesl Abrahams (supervised); Steven Barber (supervised) ; Humaira Surve (supervised) All Key Individuals and Representatives meet the fit and proper requirements as set out in the Board Notices to the Financial Advisory and Intermediary Services Act 37, 2002. Coronation holds professional indemnity and fidelity insurance cover as stipulated in the General Code of Conduct and Board Notices to the Financial Advisory and Intermediary Services Act 37, 2002. Coronation accepts responsibility for its actions and the actions of its authorised representatives in rendering the financial services. Any information disclosed to any of Coronation’s Authorised Representatives in their professional capacity will be treated as confidential unless written consent is obtained to disclose such information, or the disclosure of such information is required in the public interest or under a particular law. The appointed Compliance Officers are: Jamie Rowland Stephan Kemp Tel: 021 680 2809 021 680 7703 Fax: 021 680 2859 021 680 7753 Cell: 082 434 4622 082 351 2401 E-mail: jrowland@coronation.com skemp@coronation.com Coronation’s Conflicts of Interest Management Policy, in terms of General Code of Conduct Regulations issued in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002, is available on Coronation’s website, www.coronation.com, or on request from the Compliance Officer. All complaints are taken seriously and Coronation’s aim is to ensure that all complaints are investigated and addressed in a timely and fair manner. To lodge a complaint, please contact either your Fund Manager or one of the compliance officer’s listed above.