08 July 2013 - Liberty

08 July 2013

Contents
Contents .................................................................................................................................... 2
Newsflash .................................................................................................................................. 3
Market Comment............................................................................................................................................................ 3
Other Commentators:..................................................................................................................................................... 5
Economic Update ....................................................................................................................... 7
Weekly Market Analysis ............................................................................................................. 9
Rates ....................................................................................................................................... 10
Standard Bank Money Market Fund ............................................................................................................................. 10
STANLIB Enhanced Yield Fund ...................................................................................................................................... 10
STANLIB Income Fund ................................................................................................................................................... 10
STANLIB Extra Income Fund .......................................................................................................................................... 11
Liberty Investments’ Life Annuities .............................................................................................................................. 11
Glossary of terminology ........................................................................................................... 12
Disclaimer ................................................................................................................................ 15

Newsflash
South Africa’s ten year yield has averaged 11.1% since 1994, versus the current 7.8%
Market Comment
• The 2.1% loss in the JSE’s All Share Index on Friday made no sense, so it is good to see a strong recovery (so
far, as of 9.43am) this Monday morning, with the ALSI up 1.7%.
• We all want the US economy to gather steam, to create new jobs like the 195,000 it created in June, plus the
extra 70,000 jobs now added to May and April’s jobs report.
• Why? Because a stronger US economy implies that other economies, including ours, should also pick up,
which in turn leads to more jobs, higher company earnings and better share prices.
• Higher bond yields are a mild negative, but coming off such a low base, are not a game changer, especially as
short-term interest rates look set to stay low for at least another year, in the US, Europe, UK, Japan and
probably in SA too.
• As for the dollar’s move upwards against most currencies on the back of stronger growth there, it is putting
pressure on our rand and therefore on our inflation rate, as well as many other emerging market currencies
and inflation rates.
• Below we show a chart of the US Dollar Index, which is a composite index derived from the proportion of its
trade with its trading partners:
Source: I-Net Bridge
• On the whole, we would prefer a firmer rand, although a weaker rand has its positives, such as dampening
imports, stirring exports and helping the mines survive.
• The rand went down to 16 to the pound recently and is currently at 15.27; it fell to 13.75 to the euro and is
currently at 13.16, so the latest weakness has mostly been against the dollar.
• Meanwhile the US stock market has behaved well since its recent dip towards the end of June (fell 7.5%), as
has the Japanese stock market (up 14% from its recent low). These two markets have helped the MSCI World
Index turn around to show a 10% dollar return so far in 2013 (including dividends). See chart below. This
equates to a mammoth 33.5% in rand terms!!!
• This is after gaining 21.3% in 2012 in rand terms (global developed market equities).

• By comparison the MSCI Emerging Markets Index is down around 11% in dollars so far in 2013, while the JSE
All Share Index is down a whopping 17.2% in dollars (total return).
• Our Financial & Industrial Index is down 9.8% in dollars so far in 2013 (total return), while the JSE Resources
Index is down a huge 33.5% in dollars so far in 2013 (also total return, including dividends)
• So the developed markets continue to outperform thus far and there does not as yet seem to be any sign of a
turnaround in mining shares.
Equals 33.5% in rands
Source: I-Net Bridge
• UBS notes that the MSCI World Index of mostly developed market equities is trading at around 12.7 times
earnings of the next 12 months (forward price-to-earnings or PE ratio), compared to the long-run average
(excluding the 2000 bubble) of closer to 15 times, i.e. the market is cheaper than its long-term average.
• Also, although bond yields are rising, they are coming off a very low base.
• See the chart below of the long-term US government ten-year bond yield, showing just how low yields
remain, even after the 1% jump of the past 6 weeks (from 1.7% to 2.7%).
Source: I-Net Bridge

• As the chart shows, the long-term average yield has been 6.9%, compared with today’s 2.7%.
• Also the yield is now bumping-up against the down-trend line form 2009, when it was 5%. This implies that it
could struggle to break higher, at least in the short-term, especially as short-term interest rates remain
anchored, with the official rate at 0%-0.25%.
• South Africa’s ten year yield has averaged 11.1% since 1994, versus the current 7.8%.
• Meanwhile, since 1994 the SA prime overdraft rate has averaged 3.1% more than the SA government longterm
bond rate, whereas now it is only 0.7% higher. So if one assumes that the overdraft rate is unlikely to
rise for a while yet, because the economy is soft, then it seems that the bond yield could be more likely to
drift lower from current levels - if it is to move back towards the mean relative to the prime rate.
Other Commentators:
Elaine Garzarelli
• Although Goldman Sachs has brought forward their forecast for tapering to begin to September this year
(cutting back of the $85bn of monthly bond purchases by the US Fed), Garza is not convinced it will happen in
2013, despite the good employment number on Friday.
• After all, if the labour force participation rate (people looking for jobs) returned to its 2011 level, the
unemployment rate would currently be 8.6%, not 7.6% and the US Fed said it would start tapering
approximately when the unemployment rate hits 7.2%.
• She notes that over the past 2 months of rising bond yields, US mortgage interest rates have risen by 1% to
4.6% for a 30-year fixed mortgage, causing applications for home mortgages to fall by 31% year-on-year,
which is a negative for the property market.
• The positive news is that the percentage of home-owners having trouble paying their mortgage interest has
fallen by 52% in the last 3 years as the economy has recovered.
• She says good company profits in the US have seen companies raise their dividends by 15% year-on-year in
the 2 nd quarter of 2013.
• Her proprietary stock market indicator composite remains high at 79.5%.
• Her quantitative indicators are weighted and grouped by economic cycle (20%), monetary (24% weight),
valuation (25%) and sentiment (31%). She remains bullish and unhedged with full exposure to equities.
BCA Research
• Chen Zhao says the world economy is still in a low inflationary, or even deflationary, expansion phase.
Headline inflation in both the US and in Europe is 1.4% currently.
• Inadequate demand, or excess savings, remains a key problem behind the slow recovery.
• There are signs of improvement in the US and Japan and even Europe’s economy seems to be consolidating.
• Meanwhile the stock markets of the developed world are consolidating - and this may persist for a while.
The cyclical bull market remains intact.
• Chen expects bond yields to decline soon after their big run, but sees no long-term value in government
bonds, as long-term yields should converge to nominal GDP over time (i.e. economic growth plus inflation),
approximately 4%.
• He says that although some have been spooked by the sell-off in bonds (rising bond yields), the rise in real
bond yields in tandem with falling inflation expectations is a bullish signal for the world economy and for
share prices.

• In the US private sector growth has averaged 3% for the past 4 years, while public sector spending has been
declining by 2% per year (austerity).
• The bear market in commodities remains intact, even though there may be a relief rally soon. So he
recommends continuing to underweight emerging market shares.
Paul Hansen
Director: Retail Investing

Economic Update
Last week, the Kagiso PMI manufacturing index improved further to 51.6 in June from 50.4 in May and 50.5 in April.
This was better than market expectations for the index to ease to 50.2, suggesting that manufacturing activity has
improved during the second quarter of 2013, after a very disappointing start to the year. The improvement in the PMI
during June was relatively broad-based including an upturn in business activity and new orders. There was a sharp falloff
in purchasing commitments, but this may have been due to excess inventories. Unfortunately, the employment
index remains desperately weak at a mere 44.9 index level. Overall, this is encouraging news for manufacturing
activity, which was exceptionally weak in Q1 2013, but recorded a welcome improvement at the start of Q2 2013.
Although the prices paid component of the PMI eased to 82.2 in June 2013, from 82.4 in May 2013, it remains
relatively high suggesting a build-up of underlying costs pressures at the production level. This includes high energy,
transport and labour. The recent weakness in the currency is likely to add to pressure over the coming months. On a
trend basis, SA manufacturing activity remains under pressure (see chart showing trend line), but we remain hopeful
that SA industrial activity will improve somewhat into 2014, supported by an expansion of SA business activity into
southern Africa, increased infrastructural investment activity and a steady improvement in world economic
conditions. The June PMI data in many other parts of the world also rose more than expected today.
The FNB/BER Construction Confidence Index released last week indicates that after rising to a four-year high of 51
index points (jumping 15 index points) in Q1 2013, the index shed 6 points to 45 in Q2 2013. Confidence fell despite
higher activity level. The higher activity was in all likelihood as a result of general government capex on construction
supported by municipal spending which has, in the past, picked up in the second quarter as municipalities hurry to
spend allocated funds before the end of their financial year in June. However, this was sadly not enough to offset
concerns about profitability, which came under some pressure. Rising construction material costs, combined with a
mild uptick in tendering competition and higher employment would also have weighed on overall profitability, causing
confidence to decline. Looking ahead, the outlook for the construction sector has improved with respondents more
upbeat about future prospects. This is in line with reports from a number of listed construction companies that their
order books have improved in recent months.
Offshore, In June 2013, the US unemployment rate remained unchanged at 7.6%. This was slightly worse than
market expectations for the rate to fall to 7.5%. The unchanged unemployment rate included a further rise in the
labour market participation rate to 63.5% from 63.4% in May. The participation rate remains extremely low by
historical standards, but has been trending slightly higher in the past three months. The low participation rate is most
likely indicating a higher level of structural unemployment in the US, than what existed prior to the financial market
crisis. But if it continues to rise it would make the Fed’s target level of unemployment of 6.5% difficult to achieve over
a relatively short time-horizon of 2 years.
Non-farm payrolls rose by a very solid 195 000 in June 2013. The market was expecting a rise of 165 000. The change
in total nonfarm payroll employment for April was revised from +149 000 to +199 000, and the change for May was
revised from +175 000 to +195 000. With these revisions, employment gains in April and May combined were 70 000
higher than previously reported, which is very significant. Overall, the level of employment remains 2.15 million jobs
below the previous peak (The US economy lost 8.7 million jobs during the recession). During 2010 as a whole, the US
economy created 1 022 000 jobs, or an average of 85 000 jobs per month. In 2011, the job gains averaged a far more
respectable 175 000 a month, while in 2012 job gains averaged 180 000 a month. In the six months of 2013
employment has risen by an average of 202 000 jobs a month. The private sector added 202 000 jobs in June 2013,
after adding a revised 207 000 jobs in May 2013.
The private sector has added 2.357 million jobs in the past year and has gained employment in each of the past 40
months at an average of 196 000 jobs a month. In contrast, the government shed a further 7 000 jobs in June 2013.
Over the past year, the US government has shed a total of 64 000 jobs.
The average workweek for all employees on private nonfarm payrolls was unchanged in June at 34.5 hours. In
manufacturing, the workweek increased by 0.1 hour to 40.9 hours, and overtime was unchanged at 3.3 hours. The
average workweek for production and nonsupervisory employees on private nonfarm payrolls were unchanged at
33.7 hours. Very impressively, in June, average hourly earnings for all employees on private nonfarm payrolls rose
by 10 cents to $24.01. Over the year, average hourly earnings have risen by 51 cents, or 2.2 percent. In June, average
hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $20.14.

Worryingly, the number of persons employed part time for economic reasons (sometimes referred to as involuntary
part-time workers) increased by 322 000 to 8.2 million in June. These individuals were working part time because
their hours had been cut back or because they were unable to find a full-time job. Please note this data series is
extremely volatile.
This month’s US labour market report is very encouraging with another solid gain, especially the upward revision to
the previous two months data. The private sector appears able to gain around 200 000 jobs a month on a regular
basis, which is very good news for a sustainable economic recovery. The gain in hourly earnings (see discussion above)
is also very good news given the low inflation environment. This would suggest that the consumer has some spending
power. Equally, the survey data on hiring plans remains reasonably optimistic, while the weekly jobless claims are still
trending lower. Overall, the labour market data helps to confirm that the US economy continues to recover at a
respectable pace. It also suggests that the Fed’s projection on beginning QE tapering by year-end remains on-track.
In the emerging markets, China’s interbank interest rates have moved noticeably lower after spiking sharply from
4.6% at the beginning of June to over 13% on 20 June. This spike in short-term interest rates caused increased global
concerns about the stability of China’s banking system. While the increase in interest rates may have initially been in
sympathy with the global financial market reaction to the prospective withdrawal of quantitative easing in the US, the
surge reflects a change in China’s monetary policy. More specifically the central bank has become concerned that
because the economic slowdown in China is occurring within an environment of abundant liquidity and strong credit
growth, they are simply aiding the expansion of bank balance sheets, rather than having funds channeled to
productive uses. China’s broad measure of money supply, M2, expanded by 145% between the first quarter of 2008
and the first quarter of 2013. This easily exceeded nominal GDP growth of 79% over the same period. This ‘imbalance’
between the growth of money and real economic activity is partly a legacy of the massive stimulus program adopted
by the authorities in the immediate aftermath of the global financial crisis, when the government directed the banks
to sharply increase lending to counter the economic slowdown. However, the authorities (Central Bank) have
increasingly viewed the widening discrepancy between economic growth and liquidity (money supply) as the
emergence of a financial bubble.
Correspondingly, China’s central bank has made it clear that it does not intend to provide endless low-cost funds for
banks to expand their balance sheets into a growing pool of higher yielding and potentially riskier assets. Without
going into significant detail, this increase in financial activity by the banking sector has been partly fueled by the
explosive growth in wealth management products (WMPs). A recent report by China Banking Regulatory Commission
shows that the value of outstanding WMPs has risen by 500% since the end of 2009, reaching $1.3 trillion in March
2013. By using WMPs financial market participants can broaden the use of instruments not subject to interest rate
controls, including the use of entrusted and trust-loans. The recent spike in interbank rates means that banks can no
longer assume the central bank will provide a limitless amount of low-cost short-term funding to rapidly expand credit
or accumulate higher yielding assets. Despite the shock to the interbank market from the central bank’s latest action,
these financial activities do not seem to pose a systemic risk to China’s financial system. This is partly because of the
apparent absence of derivative instruments, plus the authorities have the ability to provide considerable financial
support to the interbank market if needed. Nevertheless, the recent monetary policy actions are likely to slow the
expansion of credit and further dampen economic growth.
Please follow our regular economic updates on twitter @lingskevin
Kevin Lings, Laura Jones and Xhanti Payi
(STANLIB Economics Team)

Weekly Market Analysis
Currencies/ Indices/ Commodities
Friday’s Close
05/07/13
Weekly Move
(%)
YTD
(%)
Indices
*MSCI World – US Dollar 1449.05 1.08 8.26
*MSCI World – Rand 14771.17 4.38 30.55
*MSCI Emerging Market – US Dollar 917.58 -2.42 -13.09
*MSCI Emerging Market – Rand 9353.52 0.76 4.81
All Share Index – US Dollar 3843.95 -4.14 -17.76
All Share Index – Rand 39169.83 -1.03 -0.20
All Bond Index 424.10 -0.89 -2.28
Listed Property J253 1353.26 -3.35 5.11
Currencies
US Dollar/Rand 10.19 3.25 20.57
Euro/Rand 12.68 -1.28 13.70
Sterling/Rand 15.16 0.94 10.21
Euro/US Dollar 1.28 -1.35 -2.77
Commodities
Oil Brent Crude Spot Price ($/bl) 107.30 4.43 -3.43
Gold Price $/oz 1223.11 -0.90 -26.94
Platinum Price S/oz 1329.00 -0.89 -13.65
Source: I-Net Bridge
* MSCI - Morgan Stanley Capital International

Rates
These rates are expressed in nominal and effective terms and should be used for indication purposes ONLY.
Standard Bank Money Market Fund
Nominal:
Effective:
4.97% per annum
5.08% per annum
STANLIB is required to quote an effective rate which is based upon a seven-day rolling average yield for Money
Market Portfolios. The above quoted yield is calculated using an annualised seven-day rolling average as at 05 July
2013. This seven- day rolling average yield may marginally differ from the actual daily distribution and should not be
used for interest calculation purposes. We however, are most happy to supply you with the daily distribution rate on
request, one day in arrears. The price of each participatory interest (unit) is aimed at a constant value. The total return
to the investor is primarily made up of interest received but, may also include any gain or loss made on any particular
instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme
case it can have the effect of reducing the capital value of the portfolio.
STANLIB Enhanced Yield Fund
Effective Yield: 5.64%
STANLIB is required to quote a current yield for Income Portfolios. This is an effective yield. The above quoted yield
will vary from day to day and is a current yield as at 05 July 2013. The net (after fees) yield on the portfolio will be
published daily in the major newspapers together with the “all-in” NAV price (includes the accrual for dividends and
interest). This yield is a snapshot yield that reflects the weighted average running yield of all the underlying holdings
of the portfolio. Monthly distributions will consist of dividends (currently tax exempt) and taxable interest. Interest
will also be exempt from tax to the extent that investor’s are able to make use of the applicable interest exemption as
currently allowed by the Income Tax Act. The portfolio’s underlying investments will determine the split between
dividends and interest.
STANLIB Income Fund
Effective Yield: 6.34%
Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of
participatory interests may go down as well as up and past performance is not necessarily a guide to the future. A
schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can
engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the
overall costs.” The above quoted yield will vary from day to day and is a current yield as at 05 July 2013.

STANLIB Extra Income Fund
Effective Yield: 5.80%
Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of
participatory interests may go down as well as up and past performance is not necessarily a guide to the future. A
schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can
engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the
overall costs.
Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or
down.” The above quoted yield will vary from day to day and is a current yield as at 05 July 2013.
Liberty Investments’ Life Annuities
Current Rates for 8 th July 2013 – 12 th July 2013
Payments are assumed to be paid monthly in advance with no guarantee period or annual escalation in income. Ages
indicated assume client is the exact age shown. No tax has been deducted.
Gender Male Female
Age last birthday 55 60 65 55 60 65
Contribution R 100,000 R 770 R 811 R 871 R 695 R 730 R 781
R 250,000 R 2 008 R 2 111 R 2 262 R 1 821 R 1 908 R 2 034
R 500,000 R 4 072 R 4 277 R 4 579 R 3 698 R 3 871 R 4 122
R 1,000,000 R 8 200 R 8 609 R 9 214 R 7 452 R 7 797 R 8 299
The table above shows the monthly annuity that an annuitant will receive for life in return for the single premium in
the left hand column. Note that the annuity depends on the annuitant’s exact age and gender.
The rates above were calculated assuming maximum commission and will be enhanced if a commission discount is
selected.

Glossary of terminology
Bonds
Cash
Collective
Investments
Compound Interest
Dividend Yields
Dividends
Earnings per share
A bond is an interest-bearing debt instrument, traditionally issued by governments as part of
their budget funding sources, and now also issued by local authorities (municipalities),
parastatals (Eskom) and companies. Bonds issued by the central government are often
called “gilts”. Bond issuers pay interest (called the “coupon”) to the bondholder every 6
months. The price/value of a bond has an inverse relationship to the prevailing interest rate,
so if the interest rate goes up, the value goes down, and vice versa. Bonds/gilts generally
have a lower risk than shares because the holder of a gilt has the security of knowing that
the gilt will be repaid in full by government or semi-government authorities at a specific
time in the future. An investment in this type of asset should be viewed with a 3 to 6 year
horizon.
An investment in cash usually refers to a savings or fixed-deposit account with a bank, or to
a money market investment. Cash is generally regarded as the safest investment. Whilst it is
theoretically possible to make a capital loss investing in cash, it is highly unlikely. An
investment in this type of asset should be viewed with a 1 to 3 year horizon.
Collective investments are investments in which investors‟ funds are pooled and managed
by professional managers. Investing in shares has traditionally yielded unrivalled returns,
offering investors the opportunity to build real wealth. Yet, the large amounts of money
required to purchase these shares is often out of reach of smaller investors. The pooling of
investors’ funds makes collective investments the ideal option, providing cost effective
access to the world’s stock markets. This is why investing in collective investments has
become so popular the world over and is considered a sound financial move by most
investors.
Compound interest refers to the interest earned on interest that was earned earlier and
credited to the capital amount. For example, if you deposit R1 000 in a bank account at 10%
and interest is calculated annually; your balance will be R1 100 at the end of the first year
and R1 210 at the end of the second year. That extra R10, which was earned on the interest
from the first year, is the result of compound interest ("interest on interest"). Interest can
also be compounded on a monthly, quarterly, half-yearly or other basis.
The dividend yield is a financial ratio that shows how much a company pays out in dividends
each year relative to its share price. The higher the yield, the more money you will get back
on your investment.
When you buy equities offered by a company, you are effectively buying a portion of the
company. Dividends are an investor’s share of a company’s profits, given to him or her as a
part-owner of the company.
Earnings per share is a measure of how much money the company has available for
distribution to shareholders. A company’s earnings per share is a good indication of its
profitability and is generally considered to be the most important variable in determining a
company’s share price.

Equity
Financial Markets
Fixed Interest Funds
Gross Domestic
Product (GDP)
Growth Funds
Industrial Funds
Investment Portfolio
JSE Securities
Exchange
Price to earnings
ratio
Property
Resources and Basic
Industries Funds
A share represents an institution/individual’s ownership in a listed company and is the
vehicle through which they are able to “share” in the profits made by that company. As the
company grows, and the expectation of improved profits increases, the market price of the
share will increase and this translates into a capital gain for the shareholder. Similarly,
negative sentiment about the company will result in the share price falling. Shares/equities
are usually considered to have the potential for the highest return of all the investment
classes, but with a higher level of risk i.e. share investments have the most volatile returns
over the short term. An investment in this type of asset should be viewed with a 7 to 10 year
horizon.
Financial markets are the institutional arrangements and conventions that exist for the issue
and trading of financial instruments.
Fixed interest funds invest in bonds, fixed-interest and money market instruments. Interest
income is a feature of these funds and, in general, capital should remain stable.
The Gross Domestic Product measures the total volume of goods and services produced in
the economy. Therefore, the percentage change in the GDP from year to year reflects the
country's annual economic growth rate.
Growth funds seek maximum capital appreciation by investing in rapidly growing companies
across all sectors of the JSE. Growth companies are those whose profits are in a strong
upward trend, or are expected to grow strongly, and which normally trade at a higher-thanaverage
price/earnings ratio.
Industrial funds invest in selected industrial companies listed on the JSE, but excluding all
companies listed in the resources and financial economic groups.
An investment portfolio is a collection of securities owned by an individual or institution
(such as a collective investment scheme). A funds‛ portfolio may include a combination of
financial instruments such as bonds, equities, money market securities, etc. The theory is
that the investments should be spread over a range of options in order to diversify and
spread risk.
The primary role of the JSE Securities Exchange is to provide a market where securities can
be freely traded under regulated procedures.
Price to earnings ratio or p: e ratio is calculated by dividing the price per share by the
earnings per share. This ratio provides a better indication of the value of a share, than the
market price alone. For example, all things being equal, a R10 share with a P/E of 75 is much
more “expensive” than a R100 share with a P/E of 20.
Property has some attributes of shares and some attributes of bonds. Property yields are
normally stable and predictable because they comprise many contractual leases. These
leases generate rental income that is passed through to investors. Property share prices
however fluctuate with supply and demand and are counter cyclical to the interest rate
cycle. Property is an excellent inflation hedge as rentals escalate with inflation, ensuring
distribution growth, and property values escalate with inflation ensuring net asset value
growth. This ensures real returns over the long term.
These funds seek capital appreciation by investing in the shares of companies whose main
business operations involve the exploration, mining, distribution and processing of metals,
minerals, energy, chemicals, forestry and other natural resources, or where at least 50
percent of their earnings are derived from such business activities, and excludes service
providers to these companies.

Smaller Companies
Funds
Value Funds
Growth Funds
Smaller Companies Funds seek maximum capital appreciation by investing in both
established smaller companies and emerging companies. At least 75 percent of the fund
must be invested in small- to mid-cap shares which fall outside of the top 40 JSE-listed
companies by market capitalisation.
These funds aim to deliver medium- to long-term capital appreciation by investing in value
shares with low price/earnings ratios and shares which trade at a discount to their net asset
value.
Growth funds seek maximum capital appreciation by investing in rapidly growing companies
across all sectors of the JSE. Growth companies are those whose profits are in a strong
upward trend, or are expected to grow strongly, and which normally trade at a higher-thanaverage
price/earnings ratio.
Sources: Unit Trust and Collective Investments (September 2007), The Financial Sector Charter Council, Personal Finance (30 November 2002),
Introduction to Financial Markets, Personal Finance, Quarter 4 2007, Investopedia (www.investopedia.com) and The South African Financial
Planning Handbook 2004.

Disclaimer
The price of each unit of a domestic money market portfolio is aimed at a constant value. The total return to the investor is primarily made up of
interest received but, may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of
increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. Collective
Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as
up and past performance is not necessarily a guide to the future. An investment in the participations of a CIS in securities is not the same as a
deposit with a banking institution. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and
maximum commissions is available on request from STANLIB Collective Investments Ltd (the Manager). Commission and incentives may be paid and
if so, would be included in the overall costs. A fund of funds is a portfolio that invests in portfolios of collective investment schemes, which levy
their own charges, which could result in a higher fee structure for these portfolios. Forward pricing is used. Fluctuations or movements in exchange
rates may cause the value of underlying international investments to go up or down. TER is the annualised percent of the average Net Asset Value
of the portfolio incurred as charges, levies and fees. A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good
return. The current TER cannot be regarded as an indication of future TERs. Portfolios are valued on a daily basis at 15h30. Investments and
repurchases will receive the price of the same day if received prior to 15h30. Liberty is a full member of the Association for Savings and Investments
of South Africa. The Manager is a member of the Liberty Group of Companies.
As neither STANLIB Wealth Management Limited nor its representatives did a full needs analysis in respect of a particular investor, the investor
understands that there may be limitations on the appropriateness of any information in this document with regard to the investor’s unique
objectives, financial situation and particular needs. The information and content of this document are intended to be for information purposes only
and STANLIB does not guarantee the suitability or potential value of any information contained herein. STANLIB Wealth Management Limited does
not expressly or by implication propose that the products or services offered in this document are appropriate to the particular investment
objectives or needs of any existing or prospective client. Potential investors are advised to seek independent advice from an authorized financial
adviser in this regard. STANLIB Wealth Management Limited is an authorised Financial Services Provider in terms of the Financial Advisory and
Intermediary Services Act 37 of 2002 (Licence No. 26/10/590)
Compliance No.: 1476DR
17 Melrose Boulevard, Melrose Arch, 2196
P O Box 202, Melrose Arch, 2076
T 0860123 003 (SA Only)
T+27(0)11 448 6000
E contact@stanlib.com
Website www.stanlib.com
STANLIB Wealth Management Limited
Reg. No. 1996/005412/06
Authorised FSP in terms of the FAIS Act, 2002 (Licence
No. 26/10/590)
24 Ameshoff Street, Braamfontein, 2001
P O Box 10499, Johannesburg, 2000
T 0860 456 789
E info@liberty.co.za
Website www.liberty.co.za
Liberty Group Limited
Reg. No. 1957/002788/06
Authorised FSP in terms of the FAIS Act (Licence No.
2409)
STANLIB Collective Investments Limited
Reg. No. 1969/003468/06