“It wasn’t the end of the world…so what now?” – Investec

Investec Asset Management It wasn’t the end of the world… so now what?”

The Senate Group – 14th March 2013

Page 2 | CONFIDENTIAL

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Agenda

● Challenges facing low risk investors Morkel Kincaid

● “It wasn’t the end of the world… So now what?” Sumesh Chetty

● Questions and answers


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Developed market interest rates tell the story

Source: I-Net Bridge

Developed market short-term interest rates: UK (Clearing bank rate, 0.50%),

US (Fed funds rate, 0.25%), EU (repo rate, 0.75%)

0

1

2

3

4

5

6

200

7

200

8

200

9

201

0

201

1

201

2

Inte

rest ra

tes (

%)

UK Clearning Banks Base Rate US Fed Funds Rate Euro Zone Repo Rate


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A liquidity wave has driven risk assets over the short term 12-month asset class returns to end February 2013


2010 2011 2012 Q3 2012 Q4 2012 Jan 2013 Feb 2013 YTD

ALSI 18.98% 2.6% 26.7% 7.26% 10.34% 3.23% -1.89% 1.27%

ALBI 14.96% 8.8% 16.0% 5.00% 2.60% 0.07% 0.66% 0.73%

SA Cash 6.93% 5.7% 5.5% 1.36% 1.30% 0.43% 0.39% 0.82%

Listed Property 29.62% 8.9% 35.9% 10.98% 2.75% 0.99% 4.64% 5.68%

FTSE/JSE All Share: 19.3%

SA Listed Property: 35.7%

SA Cash 5.4%

SA All Bond Index: 14.3%

95

100

105

110

115

120

125

130

135

Feb -

12

Ma

r -1

2

Apr

-12

Ma

y -

12

Ju

n -

12

Ju

l -1

2

Aug

-12

Sep

-12

Oct -1

2

No

v -

12

De

c -

12

Ja

n -

13

Feb -

13

FTSE/JSE All Share !BS(J203T,E,100) SA All Bond Index !BS(JAPI05[TP],E,100) SA Cash !BS(STFIND[CL],E,100) SA Listed Property !BS(J253T,E,100)


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It’s been a golden decade for SA asset classes

Source: Morningstar, to 31 December 2012, based in Rands. Returns are calculated on a bid-to-bid basis, net of fees, with gross

income reinvested; indices are all gross of fees

Performance over 10 years (annualised)

18.7%

10.4%

8.2%

5.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Average General Equity Fund Average Bond Fund Average Money Market Fund Average Foreign Equity Fund


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Driving SA bond yields to record lows

6.0

6.5

7.0

7.5

8.0

8.5

9.0

5.2

5.4

5.6

5.8

6

6.2

6.4

6.6

6.8

7

7.2

Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13

R20

8 G

ove

rnm

en

t b

on

d (

%)

JP

M G

BI-

EM

(%

)

JPMorgan GBI-EM Index (LHS)

R208 Govt bond (RHS)

Source: Bloomberg as at 18 February 2013 and I-Net-Bridge

Are income funds still relevant?


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-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

SA interest rates Keeping cash rates negative in real terms

Source: Investec Asset Management

SA real returns


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Interest rates are expected to remain lower for longer


The market has changed Opportunities still exist... they're just harder to find


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Opportunities exist to achieve meaningful real returns

Active management

Meaningful

real returns


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Active management over the years has been crucial


-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2007 2008 2009 2010 2011 2012

Inflation linked bonds

Bonds

Cash


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Active management Will be crucial in a low return environment

SA fixed income team

● SA Duration

● SA Credit

● Listed Property

● Rand Hedge

London fixed income team

● Offshore Duration

● Offshore Credit

● Currencies exposure

● EM exposure

USD/ZAR exchange rate

Source: I-Net Bridge and Investec Asset Management as at 31 December 2012.


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Corporate credit

Active management

Meaningful

real returns

http://www.sablimited.co.za/sablimited/view/sablimited/en/page1


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Returns in excess of government bonds1

Corporate bonds remain the bright spot Quality corporates offering higher yields than government bonds

● Corporate SA has a very

strong balance sheet

● Corporate bonds now offering

2-3% p.a above government

bonds

We only invest in

investment grade

instruments

AAA

AA

A

BBB

1Credit spreads per rating band calculated as average of spreads of each bond against its companion benchmark government bond

Source: RMB as at 31 December 2012.

../../../index.html



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A global universe – a larger opportunity set

Corporate credit

Active management

Meaningful

real returns Corporate credit


../../../



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Global fixed income offers a broad opportunity set

Annual Returns in USD for different fixed income asset types – best to worst

● Returns vary

significantly across the

range of fixed income

opportunities

● We look to hold assets

that suit the economic

environment and that

offer value

Emerging market debt Investment grade corporate bond

Treasuries Cash

Global High yield corporate bonds

Lowest

return

Source: Investec Asset Management, Bloomberg BBA 1 month LIBOR, Citigroup Treasury Index, Citigroup WGBI-ex US, JP

Morgan ELMI+ in USD to 2003, JP Morgan GBI-EM Global Diversified in USD from 2003, Merrill Lynch Global HY Index hedged

into USD, Merrill Lynch Global Corporate Index hedged into USD

Highest

return

Update: Yearly

G:\Depts\Marketing\Presentations\~MASTER PITCHBOOKS\GSF\GSF

Global Strategic Income Fund\~Evidence\GSI evidence 2.xlsx\Page 7

annual

Updated by Seamus

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

13.5% I8.9% 22.0% 27.9% 23.0% 6.3% 15.2% 18.1% 13.9% 60.9% 15.7% 9.6% 18.9%

9.2% 6.7% 11.6% 18.5% 12.1% 3.7% 10.8% 11.5% 10.1% 22.0% 15.3% 5.2% 16.8%

6.6% 4.2% 11.4% 16.9% 11.3% 3.4% 6.9% 9.0% 2.9% 16.3% 7.4% 5.0% 10.8%

2.0% 3.5% I8.4% 6.3% 5.5% 3.4% 5.2% 5.4% -4.8% 4.4% 5.8% 3.2% 2.0%

-2.6% 3.2% 1.8% 2.3% 3.5% 2.8% 3.8% 3.4% -5.2% 0.3% 5.2% 0.2% 1.5%

-5.3% -3.5% -1.0% 1.2% 1.5% -9.2% 3.1% 2.1% -26.6% -3.7% 0.3% -1.8% 0.2%


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Overall expect lower and narrower returns, but opportunities

still exist

Expected 12 month returns

Cash 5.0%

Bonds/ILB’s 6.8%

Corporate 8.8%

CPI 5.8%

Property yield 7.4%

http://www.google.co.za/url?sa=i&rct=j&q=rating+agencies&source=images&cd=&cad=rja&docid=K8YSwD7vlfWTHM&tbnid=CgTD05I4dQ0v4M:&ved=0CAUQjRw&url=http://foreignpolicyblogs.com/2011/05/11/us-court-rating-agencies-may-continue-to-mislead/&ei=XVUKUY8tiLGEB4CrgKAO&psig=AFQjCNEIOQHjKmgkbiBFMgs8ZxHpEHGalg&ust=1359718098995500


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Investec Asset Management South African Funds – core range

Fixed Income Multi-Asset Equity

Exp

ecte

d R

etu

rn

Value

Equity

Absolute Income

Diversified Income

Money Market

Opportunity

Cautious Managed

Managed

Volatility

Moderate Low High

Opportunity Income


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SA fixed income funds Different strategies have different objectives

Fund strategy Investec Fund Sector

Money market alternatives Investec Absolute Income SA Multi-Asset Income

Domestic only – Fixed Income

Solution Investec Opportunity Income SA Multi-Asset Income

Complete - Fixed Income solution

(incl. international) Investec Diversified Income SA Multi-Asset Income


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Globally integrated fixed income investment team We are unique to the SA market FINAL VERSION 01/12/11

Fixed Income & Currency Capability Leaders

André Roux – Co-Head of Global

Fixed Income

John Stopford – Co-Head of

Global Fixed Income

Simon Howie –

South Africa & Frontier Credit4 Investment Specialists

Multi-strategy & Developed Markets Emerging Markets

John Stopford – Allocation &

Developed Credit

4 Investment Specialists

Peter Eerdmans – Emerging Markets

Debt & Currency12 Investment Specialists

Russell Silberston – Developed

Rates & Currency


Malcolm Charles –

Southern African Rates


Thanos Papasavvas

Fixed Income & Currency Strategist

5 Fixed Income & Currency Dealers

André Roux

Economic Research

Text size 15

Main W 16

Second W 8

Photo 2.2

Textbox 5.8

Text size 12

Spacing 0.1Text size 12

Main W 16

Second W 8

Photo 1.4

Textbox 6.6

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Photo 1.4

Textbox W 6.6

Textbox H 2.8

Text size 11

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Photo 1.4

Textbox W 16

Textbox H 1.44

Text size 12

● Globally integrated team

● 37 investment professionals

● Average of 13 years

investment experience

● Specialist teams with clear

accountability and

responsibility


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Investec Absolute Income Fund Compelling alternative to money market

Annualised performance

Source: Morningstar as at 31 December 2012. Returns are calculated on a bid-to-bid basis, net of fees, with gross income reinvested.

Market indices are gross of fees. Periods less than one year are not annualised.

*Inception date: 1 July 2003

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1 year 3 years p.a. 5 years p.a. Since inception*

Investec Absolute Income

SA money market sector average

Investec Absolute Income 7.1% 7.1% 8.6% 8.8%

SA money market sector average 5.4% 5.9% 7.7% 8.0%


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Investec Diversified Income Fund Complete fixed income solution

● A diversified fixed income retail fund, established in 2008

● Globally integrated approach drawing on the best investment ideas from the SA and

London teams

● Diversified strategic allocation to multiple sources of uncorrelated fixed income returns

● Actively manages the asset allocation between cash, government bonds, inflation linked

bonds, corporate bonds and listed property in SA and abroad

● Offshore assets are actively managed with currency hedging


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Investec Diversified Income Fund Complete fixed income solution for SA investors

Corporate bonds:

Overweight (40%)

Foreign Exposure (incl. Credit linked

notes):

Actively managed

Money market:

NCDs = higher income yields and liquid

Government bonds and Property:

Underweight

Portfolio allocation

Source: Investec Asset Management 22 February 2013

Duration: 1year and 3 months

Yield: 5.8%

Government Bonds, 24.0%

Money Market (NCDs), 22.0% Foreign

Exposure, 13.0%

Floating Rate Notes, 23.0%

Corporate Bonds, 15.0%

Inflation-Linked

Bonds, 2.0%

Property, 1.0%


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Investec Diversified Income Fund Complete fixed income solution for SA investors

Source: Morningstar as at 31 January 2013. Returns are calculated on a bid-to-bid basis, net of fees, with gross income reinvested

Inception date: 29 August 2008

0%

2%

4%

6%

8%

10%

12%

3 months 1 year 3 years p.a.

Investec Diversified Income 1.8% 9.6% 9.8%

ALBI 1-3 1.3% 5.5% 6.8%

STeFI 1.3% 5.5% 6.0%


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Summary

● Challenging macroeconomic conditions prevail

− Low / negative real returns

− Lower and narrower returns from SA income assets

● Opportunities exist

− Active management

− Corporate credit

− Global diversification

● Investec Asset Management offers a globally integrated and experienced team

managing a complete fixed income solution


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Sumesh Chetty

Portfolio Manager

6 years with the firm

11 years of industry experience

Sumesh is a portfolio manager at Investec Asset

Management with responsibility for our absolute return

strategies. He is co-portfolio manager of the Investec

Cautious Managed Fund and the Investec Absolute

Balanced Fund.

He joined the firm in 2007 from Metropolitan Asset

Managers where he managed the Metropolitan

Absolute Return Fund from 2005. Before joining

Metropolitan, Sumesh spent three years as an

investment actuary at Metropolitan Employee Benefits,

where he was responsible for managing smooth bonus

funds. Sumesh began his career at Swiss Re Life &

Health, where he spent over three years as an actuarial

specialist.

Sumesh graduated from the University of Cape Town

with a Bachelor of Business Science (Honours) degree

in Actuarial Science and a Post Graduate Diploma in

Actuarial Science. He is also a Fellow of the Institute of

Actuaries in the United Kingdom.

Years updated

2013

Biographies

Sumesh Chetty, Portfolio Manager

It wasn’t the

end of the world…

So what now?


12573

Agenda

● Our investment philosophy

● Challenges facing investors

● Implications for portfolio construction


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South Africa Absolute Return team

Co-Chief Investment Officers - John McNab, Domenico Ferrini

Experienced Portfolio Managers – 20 managers

Equity

Growth: Richard Middleton

Value: John Biccard, Rajay

Ambekar

Active Quants: Grant Irvine-Smith

General: Chris Freund

Sector: Angelique de Rauville, Neil

Stuart-Findlay

RI: Malcolm Gray

Fixed Income

André Roux, John Stopford

Duration: Malcolm Charles

High Income: Vivienne Taberer

Cash: Lisa McLeod

Credit: Simon Howie, Marshall

Brown, Steven Loubser

Absolute Return

Clyde Rossouw

Sumesh Chetty

Common research platform – 21 analysts

Implementation and pre-trade compliance – 3 members

Dealing – 5 dealers

Performance measurement, attribution & risk – 6 analysts

As at November 2012

CIO: John McNab, Domenico Ferrini

Managers: Gail, Rajay, John B, Grant, Adrian, Richard, Daniel, Clyde,

Sumesh, Chris F, Malcolm G, Angelique, Neil SF, John S, Andre, Vivienne,

Malcolm, Simon, Marshall, Steven,

Analysts: Rob, Chris S, Sarine, Rudiger, Grant, Diane, Rhynhardt, John T,

Abrie, Peter, Mabuse, Chanel, Nancy, Londa, Duncan, Sandile,

Implementation: Jacqui, Cindy, Morne

Dealers: Doug, Kagiso, Francois, Ryan, Lisa, Tsitsi

Attribution: Andrew, Thabani, Muzz, Ian, Terry, Khaya

Lisa excluded from dealers - she appears as a pm in this case.

Clyde Rossouw

14 years with the firm

19 years experience

Sumesh Chetty

6 years Investec

11 years experience


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Investec Opportunity Fund Long term consistent outperformance

Investec Opportunity Fund relative to new sector:

South Africa Multi Asset – High Equity

Source: Morningstar as at January 2013.


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Investec Opportunity

SA Money Market sector average

SA Bond sector average

SA AA variable equity sector average

SA equity general sector average

Foreign equity general sector average

5%

7%

9%

11%

13%

15%

17%

19%

0% 2% 4% 6% 8% 10% 12% 14% 16%

Retu

rn p

.a.

Standard Deviation p.a.

Risk vs Return scatterplot: 10 years to 31 December 2012

Source: Morningstar as at 31 December 2012. Returns are calculated on a bid-to-bid basis, net of fees, with gross income

reinvested. Market indices are gross of fees.

Investec Opportunity and Cautious Managed Funds A proven investment process

Quality-centric

Valuation-bias

Risk-cognisant


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Risk is defined primarily as the risk of losing money

Downside volatility is more detrimental than overall volatility

Investec Opportunity and Cautious Managed Funds Our investment philosophy

Outperforming inflation with the lowest possible risk


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The rules of absolute investing

Rule number 1: Never lose money

Rule number 2: Never forget rule # 1

Why?

-30% +43%

R 100

R 70

R 100

Start Year 1 Year 2


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High quality opportunities with a valuation bias

● We prefer predictable cash flows over

uncertainty

● We only buy uncertainty if paid

handsomely for it

● ‘Cheap’ is not ‘value’

● We prize franchise value highly

● We do not change our minds often

Emphasis on quality and consistency to ensure long-term sustainable growth

Quality

Cash Flow Balance

Sheet Management

Brand /

Competitive

Advantage


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It wasn’t the end of the world… So what now?

Select opportunities can still be found

We are cautiously optimistic

• Global risks still remain

• Local risks have increased

• Market sentiment appears overly bullish


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Bond yields at historic lows Limited potential returns

6

8

10

12

14

16

18

20

Jan-9

4

Jun-9

4

No

v-9

4

Apr-

95

Sep-9

5

Feb

-96

Jul-9

6

De

c-9

6

Ma

y-9

7

Oct-

97

Ma

r-9

8

Aug-9

8

Jan-9

9

Jun-9

9

No

v-9

9

Apr-

00

Sep-0

0

Feb

-01

Jul-0

1

De

c-0

1

Ma

y-0

2

Oct-

02

Ma

r-0

3

Aug-0

3

Jan-0

4

Jun-0

4

No

v-0

4

Apr-

05

Sep-0

5

Feb

-06

Jul-0

6

De

c-0

6

Ma

y-0

7

Oct-

07

Ma

r-0

8

Aug-0

8

Jan-0

9

Jun-0

9

No

v-0

9

Apr-

10

Sep-1

0

Feb

-11

Jul-1

1

De

c-1

1

Ma

y-1

2

Oct-

12

%

Yield on the generic 10 year government bond

Source: I-Net Bridge, to 31 December 2012.


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Low short term rates resulting in negative real returns



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Investec Cautious Managed Fund Putting your cash to work – the search for real income

Inflation-linked bonds as an alternative to cash

Source: I-Net Bridge; Investec Asset Management to 31 December 2012.

100

102

104

106

108

110

112

114

116

118

120

Jan-1

2

Feb

-12

Ma

r-1

2

Apr-

12

Ma

y-1

2

Jun-1

2

Jul-1

2

Aug-1

2

Sep-1

2

Oct-

12

No

v-1

2

De

c-1

2

Inflation-linked bonds Cash


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Building a better bond portfolio Our best Inflation Linked Bond

British American Tobacco PLC

• Global tobacco manufacturer with dominant position in

many international markets

• 35% ROE and Operating Margins of 35%

• Global Drive Brands (Dunhill, Pall Mall, Kent, Lucky

Strike) – the key drivers of growth

• On-going share buybacks

• Dividend Yield of 3.8%

• FCF yield of 4.8%

Earnings per share growth of 12% p.a.

Dividends per share growth of 14% p.a.


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Stretched valuations in select parts of the SA equity market

Resources relative to Industrials

0.5

0.7

0.9

1.1

1.3

1.5

1.7

Jan-0

3

Apr-

03

Jul-0

3

Oct-

03

Jan-0

4

Apr-

04

Jul-0

4

Oct-

04

Jan-0

5

Apr-

05

Jul-0

5

Oct-

05

Jan-0

6

Apr-

06

Jul-0

6

Oct-

06

Jan-0

7

Apr-

07

Jul-0

7

Oct-

07

Jan-0

8

Apr-

08

Jul-0

8

Oct-

08

Jan-0

9

Apr-

09

Jul-0

9

Oct-

09

Jan-1

0

Apr-

10

Jul-1

0

Oct-

10

Jan-1

1

Apr-

11

Jul-1

1

Oct-

11

Jan-1

2

Apr-

12

Jul-1

2

Oct-

12

Jan-1

3

Resources expensive

relative to industrials

Resources cheap

relative to industrials

Source: I-Net Bridge.


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Bottom-up stock selection

Historic PE and subsequent real total returns


Investec Opportunity Fund

ALSI


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Investec Opportunity Fund Quality companies, reasonable valuations

Source: I-Net Bridge and Investec Asset Management as at 31 December 2012

Company %

Assore 5.7

British American Tobacco 3.9

Sasol 3.5

MTN Group 3.2

Newgold Issuer 3.2

Tiger Brands 3.0

Impala Platinum Holdings 2.6

Steinhoff International Holdings 2.5

Santam 2.0

Richemont 1.7

Total 31.3

Top 10 holdings as % of fund


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0

0.5

1

1.5

2

2.5

20

00/0

6/0

1

20

01/0

2/0

1

20

01/1

0/0

1

20

02/0

6/0

1

20

03/0

2/0

1

20

03/1

0/0

1

20

04/0

6/0

1

20

05/0

2/0

1

20

05/1

0/0

1

20

06/0

6/0

1

20

07/0

2/0

1

20

07/1

0/0

1

20

08/0

6/0

1

20

09/0

2/0

1

20

09/1

0/0

1

20

10/0

6/0

1

20

11/0

2/0

1

20

11/1

0/0

1

20

12/0

6/0

1

EPS T12M(ASR/AGL)

Last Px (ASR/AGL)

Associated Ore A great asset in our portfolio, held for 8 years


Anglo shares outstanding have grown 6X

Before buying back shares in 2007

No change in Assore since 1950

Assore’s profits have grown

faster than Anglos by 20% p.a.

But you still only pay 10 times

earnings!

11 11


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Platinum industry cost curves Impala Platinum is our preferred platinum stock

Mim

osa

Tw

o r

ivers

Pla

tin

um

Mile

Zim

pla

ts

Moto

tolo

West ta

ilin

gs

Modik

wa

Maru

la

Impala

Boschkoppie

Mogala

kw

ena

Am

andelb

ult

Kro

ondal

Unio

n

Lonm

in

Nort

ham

Ruste

nburg

Marikana

CT

RP

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

"Cas

h co

sts+

sust

aini

ng c

apex

" (R

/5P

GE

+A

u oz

)

R10,500/ounce


12573

7.0

7.5

8.0

8.5

9.0

9.5

Jan-1

2

Jan-1

2

Feb

-12

Ma

r-1

2

Ma

r-1

2

Apr-

12

Ma

y-1

2

Ma

y-1

2

Jun-1

2

Jul-1

2

Jul-1

2

Aug-1

2

Sep-1

2

Oct-

12

Oct-

12

No

v-1

2

De

c-1

2

De

c-1

2

Jan-1

3

SA specific risks have been on the rise

• Labour unrest

• Rating agency downgrades

• Rand depreciation

• Political uncertainty

• Risk of foreign outflows


http://www.google.co.za/url?sa=i&rct=j&q=rating+agencies&source=images&cd=&cad=rja&docid=K8YSwD7vlfWTHM&tbnid=CgTD05I4dQ0v4M:&ved=0CAUQjRw&url=http://foreignpolicyblogs.com/2011/05/11/us-court-rating-agencies-may-continue-to-mislead/&ei=XVUKUY8tiLGEB4CrgKAO&psig=AFQjCNEIOQHjKmgkbiBFMgs8ZxHpEHGalg&ust=1359718098995500


12573

Offshore Equity High quality global franchises at attractive valuations

Name Weight PE FCF Yield DY EM % Sales

Nestlé (Nescafe, Maggi ,Nesquik) 5.6% 16.6 4.5 3.7 41%

Japan Tobacco (Camel, Winston, Mild Seven, B&H) 5.1% 13.4 11.4 3.0 28%

Samsung Electronics (Samsung) 4.8% 8.2 4.8 0.6 75%

Imperial Tobacco Group (Davidoff, Gauloises, West) 4.8% 11.1 5.8 4.9 40%

Microsoft Corp (Windows, Office, Xbox, Bing) 4.5% 8.8 11.7 3.5 13%

Reckitt Benckiser Group (Nurofen, Finish, Vanish, Dettol, Strepsils) 4.4% 12.5 6.6 3.4 35%

Unilever (Axe, Knor, Blue Band, Lipton, Dove, Lux, Flora, Omo) 4.4% 17.2 5.4 3.4 55%

Anheuser-busch Inbev ( Budweiser, Beck's, Stella Artois ) 4.3% 17.4 7.7 2.6 56%

International Business Machines (IBM) 4.1% 11.7 6.8 1.8 21%

Coach (Coach) 4.0% 14.1 6.6 2.1 13%

Total/Average 46.0% 13.1 7.1 2.9 37.7%

Source: Investec Asset Management to 31 December 2012.

Top 10


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Nestlé – the quintessential franchise stock

Source: DataStream, company data, Investec Asset Management, USD Total Return Index

This is not a buy or sell recommendation for any particular stock

Nestle has outperformed the market through multiple

cycles due to compounding and steadily increasing

exposure to EM

Share price: source of

return 1973 - 2012

Business (profit) growth 8.1%

Valuation uplift 2.7%

CAGR % 13.1%

05101520253035404550

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

2000 2005 2010 2015 2020

% o

f sale

s

Popula

tion (

m)

% of Nestle Sales

EM Population (Million)

Develop Market Population(Million)

EM is adding 1bn new emerging market consumers by

2020

50

500

5,000

Jan-9

0

Jan-9

1

Jan-9

2

Jan-9

3

Jan-9

4

Jan-9

5

Feb

-96

Feb

-97

Feb

-98

Feb

-99

Feb

-00

Mar-

01

Mar-

02

Mar-

03

Mar-

04

Mar-

05

Ap

r-06

Ap

r-07

Ap

r-08

Ap

r-09

Ap

r-10

May-1

1

May-1

2

Lo

g s

cale

MSCI World Nestle

http://www.google.co.za/imgres?imgurl=http://1.bp.blogspot.com/_mJcgOMqzCIU/TMhSpysJNhI/AAAAAAAAAPY/kaajMfqFndA/s1600/nestea_logo.png&imgrefurl=http://ashokafmcgstore.blogspot.com/2010/10/coke-plans-to-launch-bottled-nestea.html&usg=__EC6HNS32rN2SSP8Eptv3BnPq0oA=&h=413&w=604&sz=118&hl=en&start=47&zoom=1&itbs=1&tbnid=JRnALuELHbkYhM:&tbnh=92&tbnw=135&prev=/images?q=nestle+logo&start=40&hl=en&sa=N&gbv=2&ndsp=20&tbs=isch:1&ei=myFeTbH9K4704QanruXWCQ

http://www.google.co.za/imgres?imgurl=http://www.platebyplate.org/2009/socal/images/site_images_2008/Nestle_logo_sm.jpg&imgrefurl=http://www.platebyplate.org/sc/plate-by-plate-participants&usg=__ZhoRfxuQJFrUlOV4aEmNgZBr0Mc=&h=90&w=150&sz=27&hl=en&start=236&zoom=1&itbs=1&tbnid=3BRIGn7yoFxLoM:&tbnh=58&tbnw=96&prev=/images?q=nestle+logo&start=220&hl=en&sa=N&gbv=2&ndsp=20&tbs=isch:1&ei=vSNeTY7fNYyA4QbWt7XgCQ

http://www.google.co.za/imgres?imgurl=http://www.sanbwa.org.za/images/Nestle-Logo.jpg&imgrefurl=http://www.sanbwa.org.za/membershiplist.asp&usg=__mcP5xjGsXppbutkYwrKS6ATso9w=&h=123&w=120&sz=17&hl=en&start=320&zoom=1&itbs=1&tbnid=lDUX2jRHNjyAlM:&tbnh=89&tbnw=87&prev=/images?q=nestle+logo&start=300&hl=en&sa=N&gbv=2&ndsp=20&tbs=isch:1&ei=EyReTZyfHZL04QbAzd3GCQ

http://www.google.co.za/imgres?imgurl=http://www.oceneniceskychpodnikatelek.cz/wysiwyg/obrazky/loga/Nespresso.jpg&imgrefurl=http://www.oceneniceskychpodnikatelek.cz/en/year-2009/partners-of-the-event-2009/&usg=__XhpAEQD6O93DCzS2pt_cuI2LOVc=&h=1474&w=2400&sz=527&hl=en&start=1&zoom=1&itbs=1&tbnid=aQWD7JOxI4Zb3M:&tbnh=92&tbnw=150&prev=/images?q=nestle+nespresso+logo&hl=en&gbv=2&tbs=isch:1&ei=HCZeTfT1D9T24AaNrKjbCQ


12573

Investec Cautious Managed Fund Income generation and real returns at lower volatility

Domestic -cash

29.4%

Domestic -bonds25.0%

Offshore -equities18.9%

Domestic -equities18.7%

Offshore -cash3.5%

Commodities -gold4.5%

Source: Investec Asset Management as at 31 December 2012

● High quality stocks to provide real capital growth in volatile markets with lower levels of risk

SA Equities

● Preferred asset class

● High quality global franchises on attractive valuations

Offshore Equities

● Uncorrelated returns – provides protection in uncertain markets Gold

● Bonds and ILBs provide a superior return to cash which yields a negative real return

SA Fixed interest


12573

Investec Opportunity Fund Long term real wealth creation

Domestic -equities, 41.6%

Offshore -equities, 18.1%

Domestic -cash , 15.8%

Domestic -bonds, 14.9%

Commodities -Gold, 3.2%

Offshore -cash, 3.1%

Offshore -bonds, 2.6%

Domestic -property, 0.7%

Investec Opportunity Fund

● High quality stocks to provide real capital growth in volatile markets with lower levels of risk

SA Equities

● Preferred asset class

● High quality global franchises on attractive valuations

Offshore Equities

● Uncorrelated returns – provides protection in uncertain markets Gold

● Bonds and ILBs provide a superior return to cash which yields a negative real return

SA Fixed interest

Source: Investec Asset Management as at 31 December 2012


12573

Superior long-term returns A focus on risk, quality and valuation

Investec Opportunity

SA Money Market sector average

SA Bond sector average

SA AA variable equity sector average

SA equity general sector average

Foreign equity general sector average

5%

7%

9%

11%

13%

15%

17%

19%

0% 2% 4% 6% 8% 10% 12% 14% 16%

Retu

rn p.a

.

Standard Deviation p.a.

Risk

cognisant

Quality

centric

Valuation

bias

Source: Morningstar as at 31 December 2012.


12573

Investec Asset Management International Funds – Core Range

Global Fixed Income Global Multi-Asset Global Equity

Exp

ecte

d R

etu

rn

Global Strategic Equity (USD)

Worldwide Equity Feeder (ZAR)

Global Equity (USD)

Global Opportunity Income FoF (ZAR)

Money Market (USD, EUR, GBP)

Global Strategic Managed Feeder (ZAR)

Global Strategic Managed (USD)

Global Equity FoF (ZAR)

Global Franchise (USD)

Volatility

Moderate Low High


12573

Investec GSF Global Franchise Fund

● Highly differentiated 'global franchise' philosophy

● Concentrated portfolio and not benchmark constrained

● Low historic correlation with traditional benchmarks

● Record of long-term outperformance:

− participating meaningfully in up markets

− with smaller draw-downs in down markets

− lower than average absolute volatility

● Managed by a globally integrated investment team based in London and Cape

Town

We seek to invest in companies with business models which can provide some

certainty in uncertain markets


12573

Investec GSF Global Franchise Fund Performance track record

Past Performance figures are not audited and should not be taken as a guide to the future

Source: Lipper, dates to 28 February 2013, NAV based, (inclusive of all annual management fees but excluding any initial charges),

gross income reinvested, in USD

*Inception date: 10 April 2007

Annual performance in USD Cumulative performance in USD

Update

Monthly

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Apr 07 Jan 08 Oct 08 Jul 09 Mar 10 Dec 10 Sep 11 Jun 12 Feb 13

Investec GSF Global Franchise A Acc

MSCI AC World NR (MSCI World NR pre 1/10/11)

28.8

0.3

1 month 3 months YTD 1 year 3 years p.a. 5 years p.a.

Since inception

p.a.*

Investec GSF Global Franchise A Acc 1.2% 5.2% 5.3% 13.6% 11.6% 5.6% 5.0%

MSCI AC World NR (MSCI World NR pre 1/10/11) 0.0% 7.0% 4.6% 9.3% 9.5% 1.4% 0.4%

Relative performance 1.2% -1.8% 0.7% 4.4% 2.1% 4.2% 4.6%

Quartile ranking 1 3 2 1 1 1 1

5.9%

-32.6%

36.1%

5.9%7.4%

14.7%

5.3%3.9%

-40.7%

30.0%

11.8%

-5.9%

16.1%

4.6%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2007 (Apr) 2008 2009 2010 2011 2012 2013 (YTD)

Investec GSF Global Franchise A Acc

MSCI AC World NR (MSCI World NR pre 1/10/11)

Thank you www.investecassetmanagement.com


12573

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