Senate group investec equity legal_16 march f 2018

81st Senate Group Conference
Where are the opportunities?
Cape Town
16 March 2018

2 Confidential | Investec Asset Management
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Your long-term partner
Investec Global
Franchise Fund
Since inception quartile ranking: 1
Investec
Opportunity Fund
Number 1 fund over
20 years
Investec
Equity Fund
Number 1 fund over
30 years
Past performance should not be taken as a guide to the future, losses may be made. Data is not audited. Source: © Morningstar, dates to 31.12.17, Performance figures above are based on lump sum investment, NAV-NAV, net of fees, gross income reinvested, fees are not applicable to market indices, where funds have an international allocation this is subject to dividend withholding tax, in South African Rand. The
performance quoted for periods before the launch of A Class is based on older R class’s performance, is adjusted for any fee differences and is for illustrative purposes only. The offshore Funds are sub-funds in the Investec Global Strategy Fund, 49 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, and are approved under the CIS Control Act. Inception date/ASISA Sector: Investec Equity Fund:
2:11:1987 Sector: ASISA SA Equity General, Investec Opportunity Fund: 2:5:1997 Sector: ASISA SA Multi-Asset High Equity, Investec Global Franchise Fund: 4:7:2009 merged with the OEIC Investec Global Select Equity Fund that was launched on 10.04.07. Sector: Morningstar Global Large-Cap Blend Equity

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We have the experience & track record
Past performance should not be taken as a guide to the future, losses may be made. Data is not audited. Source: © Morningstar, dates to 31.12.17, Performance figures above are based on lump sum investment, NAV-NAV, net of fees, gross income
reinvested, fees are not applicable to market indices, where funds have an international allocation this is subject to dividend withholding tax, in South African Rand. The performance quoted for periods before the launch of A Class is based on older R
class’s performance, is adjusted for any fee differences and is for illustrative purposes only. The offshore Funds are sub-funds in the Investec Global Strategy Fund, 49 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, and are
approved under the CIS Control Act *Quartile ranking not available according to GSM master since inception so this is over 20 years
Investec Global Multi-
Asset Income
Investec Global Strategic
Managed
Investec Global
Franchise
Capital preservation with
defensive returns
Long-term capital growth
(Multi-asset)
Long-term capital growth
(Equity)
Asset allocation
Income: 66%
Equity: 34%
Income: 47%
Equity: 53%
Equity: 100%
Quartile rank
(Since launch)
1
(129 funds)
1*
(201 funds)
1
(1872 funds)
Track record 7 years 30 years 10 years

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ExpectedReturnInvestec core fund solutions
Note: [ ] indicates maximum in equities. Offshore funds available as feeder funds. The expected risk and volatility may not be achieved and the value of your investment may go down as well as up
Global Strategic Managed
(USD / GBP / ZAR)
[75%]
Global Franchise
(USD / GBP / ZAR)
[100%]
Global Multi-Asset Income
(USD / ZAR)
[50%]
LocalInternational
Diversified
Income
Opportunity
[75%]
Cautious
Managed
[40%]
Value
[100%]
Equity
[100%]
Expected Risk (Volatility)
GrowthIncome
ExpectedReturn
Worldwide
Flexible
Fund

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Investec Opportunity Fund
Performance
Annualised performance in ZAR
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
1 year 3 years p.a. 5 years p.a. 10 years p.a. Since Inception p.a.*
Investec Opportunity A Inc SA CPI (Lagged) (ASISA) South African MA High Equity
Investec Opportunity A Inc 5.1% 5.6% 8.1% 8.9% 14.5%
SA CPI (Lagged) 4.4% 5.7% 5.5% 5.7% 5.8%
Active return 0.7% -0.1% 2.7% 3.1% 8.7%
(ASISA) South African MA High Equity 7.3% 4.3% 8.3% 8.1% 12.1%
Active return (sector) -2.3% 1.3% -0.2% 0.8% 2.4%
Past performance is not a reliable indicator of future results, losses may occur.
Source: Morningstar, dates to 28 February 2018, performance figures above are based on lump sum investment, NAV based, inclusive of all annual management fees but excluding any initial charges, gross
income reinvested, fees are not applicable to market indices, w here funds have an international allocation this is subject to dividend w ithholding tax, in South African Rand.
* Inception date 28 April 2000.
Annualised performance is the average return per year over the period. Individual investor's performance may vary depending on actual investment dates. Highest and Low est returns are those achieved
during any rolling 12 months over the period specified.
For further information on indices, please see the Important Information section.
Highest and lowest rolling 12 month returns since inception*
Jul-05 43.8% Feb-09 -15.7%

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2017
Recessions, downgrades, reshuffles, deteriorating government and SOE finances,
stretched valuations, droughts…
✓ Offshore contributed:
✓ Strong absolute gains (USD). But performed inline with the MSCI ACWI - on the back of a rotation out of defensive
sectors at year-end
 Rand strength (end 2018) impacted significantly (11% vs the USD)
✓ SA Equities contributed:
✓ SA-domestic stocks: Positive sentiment towards South Africa (end 2018) - RMH, Sanlam, Standard Bank.
Santam, Tiger brands
✓ Commodity stocks: Assore, Sasol
✓ Rand-hedge stocks: Richemont
 Negatives: Steinhoff
 Relative: Not holding Naspers (ALSI: 21%. Return ex Naspers: 11.1%)
✓ SA Bonds contributed:
✓ SA bond component: contributed positively to performance - Q4 rally in the SA bond market
 Relative: Local bonds didn’t react as aggressively as Interest-rate sensitive equities to the strengthening Rand and
ANC conference outcome
✓ Cash returns supportive

Three key reasons to not get caught with short
term performance

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1. A consistent performer
Past performance should not be taken as a guide to the future, losses may be made. Data is not audited. Source: Morningstar as at 31 December 2017. Returns are calculated on a NAV to NAV basis, net of fees, with
gross income reinvested. Market indices are gross of fees. Highest and lowest returns achieved during 12 month rolling periods since inception: Investec Opportunity Fund: 31.07.05: 43.8% and 28.02.09: -15.7%
Rolling 1 year returns over 20 years
Outperformance of the peer group:
70% of the time
Rolling 3 years returns over 20 years
Outperformance of the peer group:
91% of the time
-20
-10
0
10
20
30
40
50
60
70
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
(ASISA) South African MA High Equity
CPI Lagged
0
5
10
15
20
25
30
35
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
(ASISA) South African MA High Equity
CPI Lagged

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2. Relative strength in sideways to down markets
Investec Opportunity Fund – relative to sector average over the last 17 years*
Past performance should not be taken as a guide to the future, losses may be made. Data is not audited. Source: Morningstar, dates to 31 December 2017, NAV based, inclusive of all annual management
fees but excluding any initial charges, gross income reinvested, fees are not applicable to market indices, where funds have an international allocation this is subject to dividend withholding tax, in South African Rand.
* Data since May 2000. Sector: (ASISA) SA MA High Equity. Highest and Lowest returns are those achieved during any rolling 12 months over the period specified. Jul-05: 43.8%, Feb-09: -15.7%.
Meaningful participation in rising markets, but the true strength of our approach
is in sideways to down markets
Average rolling 12 month performance
21%
9%
-3%
15%
19%
6%
-7%
12%
-10%
-5%
0%
5%
10%
15%
20%
25%
Sector > 10% Sector between 0% and 10% Sector < 0% 16 years p.a.
Investec Opportunity A Sector average

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1 year 3 years p.a. 5 years p.a. 10 years p.a.
Since Inception
p.a.*
Investec Global Franchise A Acc 23.4% 11.4% 9.7% 7.7% 7.1%
MSCI AC World NR** 27.5% 11.9% 11.0% 6.0% 5.2%
Active return -4.0% -0.5% -1.3% 1.7% 1.9%
GIFS Global Large-Cap Blend Equity 26.0% 9.7% 8.4% 3.5% 2.9%
Quartile ranking 3 1 2 1 1
-32.6
36.1
5.9
7.4
14.7
15.3
3.5
8.2
-0.1
23.8
-40.7
30.0
11.8
-5.9
16.1
22.8
4.2
-2.4
7.9
24.0
-42.2
31.1
7.2
-11.2
13.3
21.1
0.3
-3.0
3.4
23.0
-60%
-40%
-20%
0%
20%
40%
60%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Investec Global Franchise A Acc
MSCI AC World NR**
GIFS Global Large-Cap Blend Equity
110.5
79.8
41.0
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
Investec Global Franchise A Acc
MSCI AC World NR**
GIFS Global Large-Cap Blend Equity
Investec Global Franchise Fund
Performance
Cumulative performance in USDAnnual performance in USD
Source: Morningstar, 31 January 2018. Performance is net of fees (NAV based, including ongoing charges, excluding initial charges), gross income reinvested, in USD. If the share class currency differs from
the investor's home currency, returns may increase or decrease as a result of currency fluctuations.
* Inception date 10 April 2007. The performance is based on the OEIC Investec Global Select Equity Fund from 10 April 2007 w hich then merged into the Luxembourg-domiciled Investec GSF Global Franchise
Fund on 04 July 2009.
** Comparison index: At Inception = MSCI World NR; Current Since 1 Oct 2011 = MSCI AC World NR
Highest and low est returns achieved during a Rolling 12 month period since inception: Feb-10: 54.4% and Feb-09: -38.7%.
Quartile ranking w ithin GIFS Global Large-Cap Blend Equity sector.

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3. Blending well with other managers
Rolling 12 month Beta relative to sector average, 10 years as at 31 December 2017
Source: Morningstar, rolling 12 month betas relative to the sector average (SA Multi-Asset High Equity sector). 10 years as at 31 December 2017
Current
Beta
10yr average
Beta
Investec Opportunity Fund 0.70 0.89
Investec Managed Fund 1.00 1.05
Competitor A 1.04 0.89
Competitor B 1.12 1.12
Competitor C 1.18 1.23
Competitor D 1.08 1.20
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Feb-09
Aug-09
Feb-10
Aug-10
Feb-11
Aug-11
Feb-12
Aug-12
Feb-13
Aug-13
Feb-14
Aug-14
Feb-15
Aug-15
Feb-16
Aug-16
Feb-17
Aug-17
Investec Opportunity A Investec Managed A
Investec Opportunity average Investec Managed average
Opportunity blends well with higher beta managers

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Hannes van den Berg
Hannes is a portfolio manager responsible for the SA Equity & Multi-Asset strategies in Investec Asset
Management’s 4Factor team. His focus is on the General Equity and Balanced strategies and equity hedge
funds.
Prior to joining the firm, Hannes was a portfolio manager at Fairtree Capital. He was also an analyst and
head of the equities trading desk. Before that, he held various positions within the Sanlam Group, including
being a founding member of MiWay Insurance and member of the Group Corporate Finance team. Hannes
completed his articles at PricewaterhouseCoopers.
Hannes holds a Bachelor of Accounting Honours as well Bachelor of Accounting Masters degree from
Stellenbosch University. Hannes is a Chartered Accountant and CFA Charterholder.
Hannes van den Berg
Portfolio Manager
Joined the firm in 2017
Joined the industry in 2004

Investec
Equity Fund
Hannes van den Berg

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Investec Equity Fund
A unique South Africa equity strategy with a strong long term track record
● We have a 26 year track record of outperforming our benchmark and peers
● An experienced and stable investment team, 8 of whom have worked together for over
a decade
● Sustainable competitive advantage from unique earnings revision philosophy in SA
which process provides diversification benefits when blending with other managers
● Our robust proprietary risk management process ensures performance consistency
● Provides diversification benefits through blending with other Funds

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Unique investment philosophy
Earnings revisions at reasonable valuation
● Markets are inefficient due to behavioural errors
made by investors
● These behavioural errors can be exploited within a
disciplined, evidence-based process
● The best alpha opportunities are in companies
where expected future profits are being revised
upwards and trading at reasonable valuations
● A combination of sophisticated screening and
rigorous bottom-up fundamental analysis delivers
the best results
Bottom-up
Fundamental
Research
Fundamental
Stock
Screen
High
Conviction
Ideas

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Earnings revisions drive share prices
Existing views are already reflected in share prices, changes are the key
This is not a buy or sell recommendation of any particular security
Source: Bloomberg as at 31 August 2017
* % of SA Equities
1,20
1,25
1,30
1,35
1,40
1,45
1,50
1,55
1,60
2,0
2,5
3,0
3,5
Feb-15
Jun-15
Oct-15
Feb-16
Jun-16
Oct-16
Feb-17
Jun-17
MND price rel to SWIX (LHS)
MND cons EPS to Dec '17 (RHS)
7.0% 6.3% 5.2% 1.0% 0.0% 0.0% 3.3% 4.8%
Portfolio
weight*:
Mondi’s 2017 consensus eps forecast and relative share price performance
Earnings revisions used in conjunction with value avoids ‘value traps’

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Real benefit is in avoiding ‘major losers’ over time
Description: Average monthly active performance against an equally-weighted universe of all the shares on the ALSI, dividend into quintiles based on Earnings Revisions (Q1 is the highest 20% of shares ranked
based on Earnings Revisions; Q5 is the lowest 20% of shares)
Source: I-Net Bridge, Investec Asset Management for the period August 2002 to August 2015
Average monthly active returns
Ranking the universe on
Earnings Revisions
Best Worst
-1.2%
-1.0%
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
Q1 Q2 Q3 Q4 Q5
AverageMonthlyActiveReturn
Quintile
Negative revisions highlights…
… companies in structural decline
… weak business models
… poor management teams

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Buy & sell discipline
Manage the ‘tension’ between earnings revisions and valuation
Sell
Buy
Look to buy, aware
of potential for
negative revisions
to bottom
Hold, cautious of
positive revisions
rolling over
Valuation expensive
Positive revisions
Valuation cheap
Negative revisions

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Investec Equity a good blend with value managers
Pairing earnings revisions with reasonable valuations dampens performance volatility
Source: Investec Asset Management, Bloomberg to 31 December 2017. Value Index returns represent: FTSE/JSE Value Index (total return); Investec returns represents: Equity carve-out of Investec Balanced (31
December 2005 to 31 December 2012) and Investec Equity survey composite (31 December 2012 to 31 December 2017). Capped SWIX is the total return of the FTSE/JSE Capped Shareholder-weighted Index
Rolling 12 month relative returns
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Value Index vs Capped SWIX Investec Equity vs Capped SWIX

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Performance
Annualised performance in ZAR
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1 year 3 years p.a. 5 years p.a. 10 years p.a. Since Inception p.a.*
Investec Equity A Inc Comparison Index** (ASISA) South African EQ General
Investec Equity A Inc 10.9% 5.4% 12.1% 8.9% 16.4%
Comparison Index** 19.2% 6.7% 11.6% 10.0% 15.9%
Active return -8.3% -1.3% 0.5% -1.1% 0.5%
(ASISA) South African EQ General 10.4% 3.1% 8.5% 8.3% 14.7%
Active return (sector) 0.5% 2.3% 3.6% 0.6% 1.7%
Source: Morningstar, dates to 28 February 2018, performance figures above are based on lump sum investment, NAV based, inclusive of all annual management fees but excluding any initial charges, gross
income reinvested, fees are not applicable to market indices, w here funds have an international allocation this is subject to dividend w ithholding tax, in South African Rand.
* Inception date 28 April 2000.
Annualised performance is the average return per year over the period. Individual investor's performance may vary depending on actual investment dates. Highest and Low est returns are those achieved
during any rolling 12 months over the period specified.
** Comparison index: At Inception = 87.5% ALSI + 12.5% MSCI ACWI pre 1/11/2017 and ALSI; Current since 15 Jun 2016 = 87.5% FTSE/JSECapped Shareholder Weighted All Share Index TR ZAR (SWIX
CAPI) + 12.5% MSCI AC World NR (ACWI)
Highest and lowest rolling 12 month returns since inception*
Apr-06 65.8% Feb-09 -34.8%

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Two of the most prominent questions currently
When will the global bull market end? Should I chase the ‘SA Inc.’ recovery story?
The party has been going on for a while…

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1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
2014 2015 2016 2017
Correction, Correction!
The S&P500 ended a record stretch of days without a 5% selloff
Source: Bloomberg to 9 February 2018
S&P 500 Index
-7.4%
-5% -11%
-5.7%
-11%
-5.7%
-5.3%
588 days
without a 5% drop

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Volatility is back
We were spoiled in 2017
Source: FactSet

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Will rising inflation in 2018 upset financial markets?
After staying low, recent jump in US wage growth to 2.9% spooked the markets
Historically wage growth of 3.5% to 4.0% has upset markets…
But wage growth recently in line with employment rate (excludes supply issue)
Source: Bloomberg, Haver, Investec Asset Management June 18 Source: DataStream, Goldman Sachs Global Investment Research, January 2018
US wages vs unemployment rate US inflation expectations rising with
commodity prices

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Global economic growth is booming
Synchronised late-cycle expansion
Source: Bloomberg, NBER, Minack Advisors, JP Morgan; January 2018
Synchronised growth with expectations accelerating
Synchronised across the world
JP Morgan Global PMI Indices (Developed & Emerging
Markets)
Global economic growth remains strong
Expectations being revised higher

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Sound US economy
Continuing economic expansion
Source: Bloomberg to March 2018
Goldman Sachs Current Economic Activity Indicator vs Conference Board Leading
Economic Index and S&P 500
Leading indicators still above current activity indicators

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In South Africa, we have hope
Is SA the next ‘EM Recovery Story’?
Source: BER, Absa research Bloomberg as at January 2018
SA business confidence is rising
Manufacturers’ near-term expectations improved sharply
0.14
0.16
0.18
0.20
0.22
0.24
0.26
0.28
0.30
0.32
0.34
0.36
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Some life back in ‘SA Inc.’
Mr Price relative to British American Tobacco

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IAM
Forecast
The interest rate & inflation outlook is positive
Source: Investec Asset Management as at 31 January 2018
SA inflation and interest rate expectations
2.5%
3.5%
4.5%
5.5%
6.5%
7.5%
8.5%
9.5%
10.5%
11.5%
Dec-03
Jun-04
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
4.5%
5.5%
6.5%
7.5%
8.5%
9.5%
10.5%
11.5%
12.5%
13.5%
14.5%
Repo Rate (LHS)
CPI (RHS)

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Valuations are full but not excessive
Source: Bloomberg, Investec Asset Management as at 5 March 2018
JSE All Share 12 month forward PE multiple MSCI World 12 month forward PE multiple
0
2
4
6
8
10
12
14
16
18
20
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
6
8
10
12
14
16
18
20
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18

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Investec SA Equity
Top ten holdings as at 28 February 2018
Source: Investec Asset Management as at 28 February 2018
28 February 2018 % of fund
Naspers 12.6
Standard Bank 8.6
Anglo American 7.2
Firstrand Bank 5.9
Sasol 5.6
Richemont 5.2
Mr Price 4.2
Mondi 4.1
Foschini 3.5
Old Mutual 3.0
Total 59.9%
● Increased SA Inc. exposure as improving
domestic outlook is benefitting earnings
revisions
● Strong global growth continues to support
earnings revisions of global cyclicals:
‒ Resources (Diversified miners)
‒ Industrials (Cyclicals)
● Underweight ‘defensives’, both domestic
and global

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Anglo American: cyclical exposure with upside potential
Sustainable positive earnings revisions with attractive valuation
Source: Bloomberg, Investec Asset Management and company data as at 13 March 2018
Strong trend in earnings revisions
expected to continue
Attractively valued with further upwards
revisions
● Significant upward earnings revisions expected
‒ At current spot prices, consensus FY 2018 EPS
expectations should increase by 15%
● An attractive commodity mix with exposure
across consumption and investment driven
commodities
● Recent appointment of a new chairman promises
to accelerate portfolio review. Re-rating
potential
● Strong free cash-flow to strengthen balance
sheet and underpin increased capital returns to
shareholders
EPS at spot 2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3
5
7
9
11
13
15
17
19
21
23
25
27
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Earnnigspershare
Shareprice
Share price (LHS)
Consensus EPS (12 month rolling)

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Mr Price’s upwards earnings revisions driven by
operation improvements
Source: Bloomberg, Investec Asset Management as at 13 March 2018
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-5%
0%
5%
10%
15%
20%
25%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
FY17
2018e
2019e
2020e
Retail sales (LHS) EBIT Margin Gross Margin
● We actively increased our position as we believed that
EPS revisions had bottomed and we expect MRP to
deliver strong results for 1H18
Improved sale and margin recovery Actively increased exposure as revisions
bottomed
● Correcting their merchandise is resulting strong sales
and will improve their gross margin through lower
markdowns.
● Positive operating leverage should bolster the bottom
line.
8
9
10
11
12
13
14
15
50
100
150
200
250
300
350
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
MrPriceshareprice(Randpershare)
Mr Price share price (LHS) Consensus EPS, FY 2019 (RHS)
Consensus EPS, FY 2018 (RHS)
Actively increased allocation
as we believed EPS
revisions have bottomed

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Stocks

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Remains selective on ‘SA Inc.’ exposure
Source: Bloomberg, 12 January 2018
Earnings revisions remain key to stock selection
Earnings revisions of SA retailers Earnings revisions of SA industrial shares
Source: Bloomberg, 12 January 2018
80
85
90
95
100
105
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Mr Price Woolworths
60
65
70
75
80
85
90
95
100
105
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
MTN Vodacom TigerBrands Barloworld

P20180314_1745716P
We are selective in terms of our exposure to banks
Source: Investec Asset Management; Company Financial Statements; 13 March 2018
Actively increased banks exposure in Nov
Weight relative to Capped SWIX
Importance of operating earnings
%-change over previous 6 months (Dec 17 results)
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
9/22/2017
9/29/2017
10/6/2017
10/13/2017
10/20/2017
10/27/2017
11/3/2017
11/10/2017
11/17/2017
11/24/2017
12/1/2017
12/8/2017
12/15/2017
12/22/2017
12/29/2017
1/5/2018
1/12/2018
1/19/2018
1/26/2018
2/2/2018
2/9/2018
2/16/2018
2/23/2018
3/2/2018
3/9/2018
FSR & RMB
SBK
NED
BGA
Combined (4 big banks)
9.0%
14.4%
16.6%
7.0%
8.3%
7.0%
0.3%
-27.0%
7.9%
-0.8%
-8.6%
0.8%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Pre-Provision Operating Profit Impairments Normalised earnings
Standard Bank FirstRand Nedbank Barclays Africa

P20180314_1745716P
Top 10 offshore holdings as at 28 February 2018
Source: Investec Asset Management as at 28 February 2018
Company Country of listing % of offshore
Microsoft US 3.1%
Rio Tinto London 2.3%
Johnson & Johnson US 2.2%
Alphabet (Google) US 2.2%
Comcast Corporation US 2.2%
Booking Holding US 2.1%
Honeywell International US 2.1%
CitiGroup US 1.8%
CBOOC Hong Kong 1.8%
Bank of America US 1.8%

P20180314_1745716P
Market outlook summary
Balance between relatively positive global environment and positive SA sentiment
● Equity markets and global growth are
robust and it is too early to get defensive
● Valuation is poor, but markets will need
another bear trigger
● Equity markets back to traditional battle of
rising earnings versus tighter monetary
policy
● Extent of inflationary pressures will
determine if Central Banks ‘stick to the script’
● SA sentiment and growth increasingly
positive
Stay invested in risk assets, but expect more volatility

Investec
Legal update
Salome Young

P20180314_1745716P
Pre-budget hype
Gigaba’s tough
and unpopular
budget
R30bn in
additional revenue
needed!
We need to avoid
a further Moody’s
downgrade
“
“

P20180314_1745716P
2018 Budget
Discussing today:
1. Predictions
2. Key changes
3. Future Proposals
4. An empty cookie jar?
5. TLAA 2017
6. Trusts as owners of living annuities
7. Directives for “dummies”

P20180314_1745716P
Predictions
Estate duty
Abatement
Section 4q
Trusts - conduit principle
Wealth taxes
VAT
increase
by 1 or 2%
CGT
inclusion
rate
STT
increase
DTC

P20180314_1745716P
Key changes
Personal income tax 2018/2019
Taxable income (R) Tax
0 – 195 850 (189 880) 18% of taxable income
195 851 – 305 850 (296 540) 35 253 + 26% of amount above 195 850
305 851 – 423 300 (410 460) 63 853 + 31% of amount above 305 850
423 301 – 555 600 100 263 + 36% of amount above 423 300
555 601 – 708 310 147 891 + 39% of amount above 555 600
708 311 – 1 500 000 207 448 + 41% of amount above 708 310
1 500 000 and above 532 041 + 45% of amount above 1 500 000
Rebates
Primary 14 067 (13 635)
Secondary (65+) 7 713 (7 479)
Tertiary (75+) 2 574 (2 493)

P20180314_1745716P
Key changes
Effective 1 April 2018
Increased to 15%
Impact on
the poor?
VAT

P20180314_1745716P
Key changes
Increased to 25%
Estate
duty
Portion
exceeding
R30 million
Increased to 25%Donations
tax
Portion
exceeding
R30 million

P20180314_1745716P
Key changes
Institutional Investor Type
Old Limit New Limit
Foreign
Additional
African
Allowance
Total Foreign
Foreign
(excl Africa)
Additional
African
Allowance
Total Foreign
Investec Access 35% 5% 40% 40% 10% 50%
Investec Investment Linked
Life Annuity
(ILLA)
35% 5% 40% 40% 10% 50%
Preservation Pension Plan
(IPPP)
25% 5% 30% 30% 10% 40%
Preservation Provident Fund
(IPPF)
25% 5% 30% 30% 10% 40%
Retirement Annuity Fund
(IRAF)
25% 5% 30% 30% 10% 40%
Foreign investment limits for IMS products
Following Budget announcement SARB issued Exchange Control Circular No. 7/2018

P20180314_1745716P
Key changes
Sin taxes increased
Alcohol
Tobacco
Fuel levy
Total
increase of
52c/l
Sugar levy
On sugar-
sweetened
beverages
Effective
1 April 2018

P20180314_1745716P
Future proposals
● Emigration withdrawal from preservation funds
● Transfers to preservation funds after retirement age
● Retirement reform – provident fund annuitisation

P20180314_1745716P
Future proposals
● Official rate of interest to be adjusted for low / no interest loans:
‒ Trusts & connected persons
‒ Employers & employees

P20180314_1745716P
Future proposals
● Apportionment of medical tax credits
● Funding for NHI: medical tax credits will be increased at below
inflationary rates to assist in funding

P20180314_1745716P
An empty cookie jar?
Tax benefits of RA’s
Before retirement
Contributions
Lesser of:
● R350 000
● 27,5% of remuneration / taxable income
● Taxable income excluding taxable capital gain
At retirement
Lump sums
● Disallowed contributions tax free
● Possible R500 000 tax free at retirement
After retirement
Living annuity
Disallowed contributions – Sec 10C deduction
Death
Beneficiary electing lump sum
● Disallowed contributions tax free
● Possible R500 000 tax free
● Exempt from estate duty (excl disallowed contributions)
No tax deducted within policy Compounded growth

P20180314_1745716P
An empty cookie jar?
Comparison of tax rates:
Individuals / trusts investing direct vs through sinking fund
Individuals Trusts Sinking Funds (IPF)
Income Tax Max 45% 45% 30%
Effective CGT rate Max 18% 36% 12%
● Estate planning
‒ If beneficiary nominated, investment not part of frozen estate
‒ No CGT on death if transferred to beneficiary
‒ Fully liquid once transferred to beneficiary
● Liquidity restrictions within first 5 years

P20180314_1745716P
TLAA 2017 – Recap
Example
New Section 11F
Max deduction is lesser of:
● R350 000
or
● 27,5% of remuneration / taxable income
or
● taxable income excl taxable capital gain

P20180314_1745716P
TLAA 2017 – Recap
Example:
● Mark earns salary (remuneration) R200 000
● Mark receives rental income R100 000
● He sold shares & has taxable capital gain R500 000
● Total taxable income R800 000
Therefore, max deduction is lesser of:
● R350 000; or
● 27,5% of R800 000 = R220 000; or
● R800 000 – R500 000 = R300 000 (taxable income excl taxable capital gain)
Conclusion: Mark’s max retirement fund contribution deduction = R220 000

P20180314_1745716P
Trusts as owners of living annuities
Example
What happens on death of
annuitant?
● Primary / alternative beneficiaries – what is the difference?
● If beneficiary predeceased or no beneficiary nominated?
● Options for beneficiaries

P20180314_1745716P
Trusts as owners of living annuities
What happens when a trust is nominated beneficiary?
● Trust chooses lump sum
● Trust chooses transfer to annuity in name of trust
How will annuity be taxed once trust is owner?
● Trusts taxed on income at 45% - but what if trust distributes income to beneficiaries?
● Trust can approach SARS
● Register for PAYE
● Request tax directive
And when trust is wound up?
● Trust must nominate beneficiary on the ILLA
● Beneficiary will have usual options
● If beneficiary chooses lump sum – taxed at beneficiary’s marginal rate
● If beneficiary chooses annuity

P20180314_1745716P
Finally… directives for “dummies”!
Legislation does not allow for cancellation of tax directives
However, in order to select the retirement fund lump sum
value, one needs to know what the tax liability will be / the
after tax lump sum
And clients can have poor memories… placing advisors in
difficult positions
From April 2018 – access to SARS’s “directive simulator”

Thank you
www.investecassetmanagement.com

P20180314_1745716P
Important information
All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do
not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information or opinion without appropriate professional advice after a
thorough examination of a particular situation. This is not a recommendation to buy, sell or hold any particular security.
Collective investment scheme funds are generally medium to long term investments and the manager, Investec Fund Managers SA (RF) (Pty) Ltd, gives no guarantee with
respect to the capital or the return of the fund. Past performance is not necessarily a guide to future performance. The value of participatory interests (units) may go down as
well as up. Funds are traded at ruling prices and can engage in borrowing, up to 10% of fund net asset value to bridge insufficient liquidity, and scrip lending. A schedule of
charges, fees and advisor fees is available on request from the manager which is registered under the Collective Investment Schemes Control Act. Additional advisor fees may
be paid and if so, are subject to the relevant FAIS disclosure requirements. Performance shown is that of the fund and individual investor performance may differ as a result of
initial fees, actual investment date, date of any subsequent reinvestment and any dividend withholding tax. There are different fee classes of units on the fund and the
information presented is for the most expensive class. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or
down. Where the fund invests in the units of foreign collective investment schemes, these may levy additional charges which are included in the relevant TER. Additional
information on the funds may be obtained, free of charge, at www.investecassetmanagement.com. Investec Asset Management (Pty) Ltd (“Investec”) is an authorised financial
services provider and a member of the Association for Savings and Investment SA (ASISA).
Investment Team: There is no assurance that the persons referenced herein will continue to be involved with investing for this Fund, or that other persons not identified herein
will become involved with investing assets for the Manager or assets of the Fund at any time without notice.
Investment Process: Any description or information regarding investment process or strategies is provided for illustrative purposes only, may not be fully indicative of any
present or future investments and may be changed at the discretion of the manager without notice. References to specific investments, strategies or investment vehicles are for
illustrative purposes only and should not be relied upon as a recommendation to purchase or sell such investments or to engage in any particular strategy. Portfolio data is
expected to change and there is no assurance that the actual portfolio will remain as described herein. There is no assurance that the investments presented will be available
in the future at the levels presented, with the same characteristics or be available at all. Past performance is no guarantee of future results and has no bearing upon the ability
of Manager to construct the illustrative portfolio and implement its investment strategy or investment objective.
The fund is a sub-fund in the Investec Global Strategy Fund, 49 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, and is approved under the Collective
Investment Schemes Control Act.
In the event that specific funds are mentioned please refer to the relevant minimum disclosure document in order to obtain all the necessary information in regard to that fund.
This presentation is the copyright of Investec and its contents may not be re-used without Investec’s prior permission.

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