TRIATHLON April 2014 Fund objective Outperform benchmark: 90% - - PowerPoint PPT Presentation

TRIATHLON

April 2014

Outperform benchmark: 90% SWIX Top 40 10% Cash Constraints: max 95% in equities no listed property no foreign

Fund objective

vs benchmark – since inception (all costs included)

Fund performance

90 100 110 120 130 140 150 160 170 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Fund Performance benchmark

vs benchmark – since inception

Equity component

90 100 110 120 130 140 150 160 170 180 190 200 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

Equity component SWIX Top 40

since inception

Just the numbers

FUND PFM Benchmark Equity component* Index Annual return 20.64% 19.74% 27.03% 21.37% Risk - annualised 10.16% 10.76% 11.65% 11.96% Value added vs benchmark / index 0.75% 6.09% Risk of taking active positions 4.24% 3.74% Reward as a % of the risk taken 0.20 1.60 Cash return 5.41% 1.90 Drawdown risk

• 4.45%
• 4.52%
• 4.45%
• 5.06%

* Gross of costs

comparison

Peer Group

90 100 110 120 130 140 150 160 170 180 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

Triathlon Fund Electus Rainmaker Investec AG Equity Coro Equity Cannon

vs peer group

Equity component

90 110 130 150 170 190 210

Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14

Triathlon Equity component Electus Rainmaker Investec AG Equity Coro Equity Cannon

what we got right – since inception

Attribution

100 200 300 400 500 600 CORONAT IMPALA PLATINUM ADAPTIT HLDS LTD EOH TELKOM PINNACLE ANGLOGOLD ASHANTI IMPERIAL AMPLATS WOOLIES

+500%

• 31%

+109% +169% % Gain / loss +78% +168%

• 34%

+76%

• 23%

+175%

and what we got wrong – since inception

Attribution

• 300
• 250
• 200
• 150
• 100
• 50

AVENG AFRICAN RAINBOW BHPBILL SANLAM WBH OVCON LTD GFIELDS EXXARO STEINHOFF ABIL NASPERS -N

• 16%

+19% +36% +127% % Gain / loss +28%

• 61%
• 14%

+139%

• 40%

+209%

Current positioning

Anchor tenants % Satellite tenants Total Rand hedge Sasol, Billiton, Mondi, Steinhoff, BAT 25% Glencore, Lonmin 4% 28% Technology Naspers, EOH 10% AdptIt 5% 15% Financial Old Mutual, FNB 6% Coronation, Investec 8% 14% HealthCare Aspen, Medi Clinic 6% 8% Autonomous Richemont, SAB 6% Remgro, Zeder 8% 14% Consumer FamBrands, Mr Price, Woolies 12% 0% 10% 65% 25% 90% Cash 10%

Macro environment

What is the link between QE and economic growth? Is economic growth in the major regions improving ? Will this result in inflation in the us and elsewhere? Will this occur in 2014 leading to a sharp rise in bond yields? And will the fed fall behind in adjusting policy? What have bond and equity markets priced in? What have currency markets priced?

7 really difficult questions

Focus on 2014

QE - 101

headwinds abating

Global trade

not a major problem during 2014

Inflation in 2014 in the US

wages have fallen, productivity is up

Why ?

unpacking the “real” issue

Tapering in 2014

• 10
• 5

5 10 15 2yr 3yr 5yr 7yr 10yr 30yr

Taper - impact on treasury curve

market expectations based on Fed guidance

Tightening

Eurozone Inflation

soft patch or structural headwinds?

SA Inc

where will it come from?

SA Growth

pickup in external growth should result in firmer rand during H2:2014

ZAR Respite

still interesting

US Equity

running a little ahead of earnings?

SA Equity

6 56 106 156 206 256 306 356 406 456 506 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 2000 2002 2004 2006 2008 2010 2012 ALSI (LHS) ALSI Earnings Base (RHS)

it would appear so

SA Equity

• 40
• 30
• 20
• 10

10 20 30 40 50 8 10 12 14 16 18 20 2000 2002 2004 2006 2008 2010 2012 ALSI P:E (LHS) ALSI Earnings %Ch YoY Lag 13m (RHS)

what is the link between QE and economic growth? three parts: rescue banks, suppress yield curve, sustain growth is economic growth in the major regions improving ? yes, but with the surprise being less growth than expected will this result in inflation in the US and elsewhere? not in the US, maybe in Japan & Germany, no in southern Europe will this occur in 2014 leading to a sharp rise in bond yields? unlikely as deflationary pressures persist in the US – CPI could fall and will the Fed fall behind in adjusting policy? possibly, but this will be driven by the markets perception of inflation based on the improvement in macro-economic data

To Sum Up

what have bond and equity markets priced in? us 10 yr looks fairly priced us tips overpriced us equities fair value with better earnings in prospect sa equities on demanding rating most likely changes for the next quarter / six months: further rotate out of mining and rand hedge back into consumer stocks (very non-consensus call)

To Sum Up

Thank you for your time

Regulatory information

Vunani Fund Managers (Pty) Ltd MI-PLAN (Pty) Ltd Physical Address: 6th Floor, Letterstedt House 6th Floor, Letterstedt House Newlands on Main Newlands on Main Newlands Newlands 7700 7700 Telephone number: 021 670 4900 021 671 1650 Internet website: www.vunanifm.co.za www.mi-plan.co.za Vunani Fund Managers (Pty) Ltd and MI-PLAN (Pty) Ltd are authorised financial services provider (license no. 608 & 9383) approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisors and Intermediary services Act 37 of 2002. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of

• investments. Since the performance of financial markets fluctuate, an investor may not get back the full amount
• invested. Past performance is not necessarily a guide to future investment performance. All returns are rand returns,

unless otherwise stated. Investment deals done on behalf of clients by Vunani Fund Managers are all done on an arm’s length basis. Vunani Fund Managers (Pty) Ltd has been GIPS verified for the periods 1 January 2005 to 31 December 2013. A copy of the verification report is available on request.