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OLD MUTUAL STABLE GROWTH FUND

OLD MUTUAL STABLE GROWTH fund . SEPTEMBER 2019. fund INFORMATION fund PERFORMANCE as at 30/09/2019. RISK PROFILE % PERFORMANCE (ANNUALISED). Low to Moderate to Since Low Moderate High 1-Yr 3-Yr 5-Yr 7-Yr 10-Yr Inception1. Moderate High fund (Class A) RECOMMENDED minimum INVESTMENT TERM. fund (Class B1) 2. 1 year+ 3 years+ 5 years+ Benchmark* * The CPI figures are lagged by one month as the number was calculated before this fund OBJECTIVE month's inflation rate was released. The fund aims to outperform inflation and provide a modest level of 1. Performance since inception of the fund . 2. Class B1 fund is only available through investment platforms such as Old MUTUAL income while aiming not to lose money over any 18-month period.

THIS IS THE MINIMUM DISCLOSURE DOCUMENT AS REQUIRED BY BOARD NOTICE 92 Funds are also available via Old Mutual Wealth and MAX Investments. Helpline 0860 234 234 Fax +27 21 509 7100 Internet www.oldmutualinvest.com Email unittrusts@oldmutual.com

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Transcription of OLD MUTUAL STABLE GROWTH FUND

1 OLD MUTUAL STABLE GROWTH fund . SEPTEMBER 2019. fund INFORMATION fund PERFORMANCE as at 30/09/2019. RISK PROFILE % PERFORMANCE (ANNUALISED). Low to Moderate to Since Low Moderate High 1-Yr 3-Yr 5-Yr 7-Yr 10-Yr Inception1. Moderate High fund (Class A) RECOMMENDED minimum INVESTMENT TERM. fund (Class B1) 2. 1 year+ 3 years+ 5 years+ Benchmark* * The CPI figures are lagged by one month as the number was calculated before this fund OBJECTIVE month's inflation rate was released. The fund aims to outperform inflation and provide a modest level of 1. Performance since inception of the fund . 2. Class B1 fund is only available through investment platforms such as Old MUTUAL income while aiming not to lose money over any 18-month period.

2 The Wealth. portfolio manager actively manages asset allocation to take advantage Performance measurements over periods shorter than the recommended investment term may not be appropriate. Past performance is no indication of future performance. of changing market conditions. fund returns are net of fees and measured against the benchmark. WHO IS THIS fund FOR? Rolling 12-Month Return Highest Average Lowest This fund is suited to investors who want their investment to grow in fund (Since Inception) real terms and deliver a moderate level of income, with controlled risk of capital loss in the short-term. It is typically suited to investors close Performance Since Inception to, or in retirement.

3 260 fund INVESTMENT MANDATE. Indexed to 100 on 30 Jun 2007. CPI + 2%. The fund invests in cash, bonds, property and shares. The fund may 220 CPI. invest up to 40% of its portfolio in equities. The fund may also gain exposure to foreign assets up to a maximum of 30% of its portfolio (with 180. an additional 10% for African ex-SA investments). Derivatives may be 140. used for efficient portfolio management purposes. REGULATION 28 COMPLIANCE 100. The fund complies with retirement fund legislation. It is therefore suitable as a stand-alone fund in retirement products where Regulation 60. Jun 07 Mar 09 Dec 10 Sep 12 Jun 14 Mar 16 Dec 17 Sep 19. 28 compliance is specifically required. Past performance is no indication of future performance.

4 BENCHMARK: CPI. PERFORMANCE CPI + 2% to 3% (net of fees). Risk Statistics (Since Inception). TARGET: Maximum Drawdown Performance is targeted over the recommended minimum investment term and is not guaranteed. Months to Recover 4. RISK OBJECTIVE: This fund aims to avoid losses over rolling % Positive Months 18-month periods. Annual Standard Deviation ASISA CATEGORY: South African Multi-Asset Low Equity Risk statistics are calculated based on monthly performance data from inception of the fund . fund MANAGER(S): John Orford & Alida Jordaan Risk Objective: Capital protection over 18 months (Old MUTUAL Investment Group . MacroSolutions) 16%. Old MUTUAL STABLE GROWTH fund 14%. LAUNCH DATE: 01/07/2007.

5 12%. SIZE OF fund : 10%. DISTRIBUTIONS: (Half-yearly)* 8%. Date Dividend Interest Total Total % 6%. 30/06/2019 4%. 31/12/2018 2%. * Class A fund distributions 0%. fund COMPOSITION -2%. Dec 08 Jul 12 Feb 16 Sep 19. ASSET & PERCENTAGE ALLOCATION. PRINCIPAL HOLDINGS. SA Cash HOLDING % OF fund . SA Bonds I2025 ILB 31/01/2025 SA Equities R186 21/12/2026 R2032 31/03/2032 International Cash R2030 31/01/2030 In ation-linked Bonds R2035 28/02/2035 International Brait SE 18/09/2020 Equities Zambezi Platinum RF Ltd Pref SA Property Naspers Ltd Preference British American Tobacco Shares International ABSA Group Ltd Bonds THIS IS THE minimum DISCLOSURE document AS REQUIRED BY BOARD NOTICE 92. Funds are also available via Old MUTUAL Wealth and MAX Investments.

6 Helpline 0860 234 234 Fax +27 21 509 7100 Internet Email OLD MUTUAL STABLE GROWTH fund . SEPTEMBER 2019. fund MANAGER INFORMATION environment remains one of confusion with no unfavourable market conditions. Local cash proved clarity on the likely outcome. In response to the to be the best local asset class over the quarter. JOHN ORFORD | muted GROWTH outlook and increased uncertainty, The fund is underweight to total equity, reflecting several central banks, including the US Federal an underweight allocation to global equities. In PORTFOLIO MANAGER Reserve, have clearly stepped off the brake and particular, we see the US equity market as likely BA Economic History are slowly reapplying the accelerator.

7 Time will tell to deliver poor returns going forward on the (Hons), Postgraduate if this is sufficient to offset the uncertainty created back of slower GROWTH . During the quarter, we Dip (Quantitative by political developments. In the meantime, further reduced our exposure to global equities. equity markets remained somewhat directionless, At the same time, we added exposure to South Development Economics), while industrial metals continued to come under African equities at attractive prices. While the MSc (Development pressure. Global bond yields moved lower again GROWTH outlook for South African companies Economics), MBA and precious metal prices rose as investors sought seems challenging, many of them trade on very safe havens.

8 Many sovereign bonds are once again attractive valuations. 15 years of investment trading on negative yields, while the US 10-year experience bond yield reached a low of before unwinding In a world of very low, or even negative, yields South a little towards the end of the quarter. Africa's fixed income assets offer an attractive ALIDA JORDAAN | yield after inflation. While the country's economic The South African economy has been and remains outlook warrants caution, we think the current PORTFOLIO MANAGER tied to the hip of the global economy. Hence the high real yields on SA bonds price in a lot of this BMus (Hons) (cum laude), impact of slower global GROWTH filtered through risk. Not surprisingly, therefore, the fund has a MBA (cum laude), CFA to South African markets and the currency.

9 Significant allocation to Government bonds and While a Chief Reorganisation Officer was finally 24 years of investment corporate credit. During the quarter, we added appointed at Eskom during the quarter, visa to our holdings of nominal Government bonds experience restrictions were relaxed on several countries and at yields over 9% compared to inflation of President Ramaphosa announced his Economic We also added to our holdings of inflation-linked GROWTH Advisory Council, progress on inducing a fund COMMENTARY bonds offering a real yield of meaningful economic recovery has been slower The tale of the tape for the third quarter of 2019: than many expected. At the end of September, We expect markets to remain challenging with Local equities fell 5% and local bonds returned the President published his first weekly newsletter concerns about the global economy likely to be nearly 1%, while global equities and bonds were over the coming months this may shed further top of mind.

10 The fund is underweight to global approximately flat and 1% higher respectively in light on the focus of Government. The South equities and has a large allocation to global US dollar terms, and the rand weakened by over African Reserve Bank trimmed interest rates cash, which hedges us against downside risks to 7% against the US dollar. by in the quarter as inflation remains well global equities. Within local assets we continue contained and GROWTH anaemic. to think that local fixed income assets are likely Various measures have pointed to a broad-based to deliver good real returns. Overall, the fund slowdown in global economic activity, which While it was yet again a difficult quarter, the Old is well-diversified and should deliver good real was compounded by a re-escalation in trade MUTUAL STABLE GROWTH fund delivered a positive returns over the coming years.