Presentation to the Senate Group by Anchor Capital.

1. © 2009-2015 Anchor Capital (Pty) Ltd. | An authorised Financial Services Provider Reg No # 2009/002925/07 | FSP No # 39834

2. Who is Anchor Capital
• Founded 2011
• Part of listed Anchor Group (R2.2bn market cap)
• Over R20bn of assets under management and administration –
• CIS and Segregated Portfolio`s
• Local and offshore investment team (20 investment professionals)
• 3 year track record
• Offices in Sandton, Durban, Pretoria, Cape Town, London
• 70 degreed staff (7 CA(SA)’s, 12 CFA’s/CFA candidates)

3. David Gibb
 BSc Med (UCT), CA (SA), CFA
 Liberty Asset Management (later Stanlib) 1994 to 2008
 Head of equity research at Stanlib
 Track record as unit trust manager at Stanlib
 Winner 2008
 Micropal Award – 5 year performance Domestic EQ Industrial
 Winner 2005
 Raging Bull Awards - 3 year performance Global Technology
 S&P Fund Award - 3 year performance Global Technology
 Winner 2003
 S&P Fund Award – 1 year performance Global Technology
 Joined Anchor Capital in July 2012
 Manager of the Anchor BCI Worldwide Flexible Fund

4. Peter Little
 B.Com Accounting degree & CFA charter holder
 18 years financial markets experience
 Worked for a number for Global Investment banks in London (incl JPM,
Barclays Capital, RBS & Credit Suisse) predominantly in structuring and
derivatives roles
 Transferred to New York in 2005 with Credit Suisse Asset Management to
manage various hedge fund products
 Most recent role before returning to SA was Head of Fund Management for
Liquid Systematic Hedge Funds for Credit Suisse in NY
 Joined Anchor Capital towards the end of 2013
 Manager of the Anchor Global Capital Plus Fund

5. © 2009-2015 Anchor Capital (Pty) Ltd. | An authorised Financial Services Provider Reg No # 2009/002925/07 | FSP No # 39834
David Gibb –
Global Investment
Opportunities

6. © 2009-2015 Anchor Capital (Pty) Ltd. | An authorised Financial Services Provider Reg No # 2009/002925/07 | FSP No # 39834
US markets and China

7. How expensive are US stock markets?

8. US corporate earnings well above trend

9. Cyclically adjusted PE (CAPE) is very high versus history

10. Chinese economy is in transition

11. .....causing turmoil in steel markets
Source: Financial Times 28 Oct ‘15

12. Commodities – back to where we started
Source: Financial Times 30 Oct ‘15

13. Investment Opportunities

14. Investment philosophy
• Investment in companies with a durable competitive advantage
when? down in the business cycle
made a mistake that can be fixed
growth is underestimated
 Invest for the long term

15. US banks – Price to book values have been hit hard
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
1998 2000 2002 2004 2006 2008 2010 2012 2014
P/tBV
Source: Bloomberg – S&P Bank Index S5BankX Price to Tangible book value

16. Large banks continue to gain market share in the US
Share of
Assets by
Bank Type
Source: FDIC Statistics; The State and Fate of Community Banking, Lux & Greene

17. US banking net interest margin (NIM) at multi-decade lows
%
Source: Federal Reserve
2.50
3.00
3.50
4.00
4.50
5.00
1985 1995 2005 2015

18. US banks
US Bancorp
JP Morgan Chase
Wells Fargo

19. Adam Jones – Welsh rugby player

20. UK car insurance premiums have turned up
Source: Confused.com car insurance price index

21. Admiral is just a top-class car insurer
Source: Admiral H1 2015 results

22. Other opportunities
General Electric
Yum Brands
Starbucks
Pandora
Alphabet (Google)
Glaxo

23. Anchor BCI Worldwide Flexible Fund
Performance since inception 13 May 2013 to 31 October 2015
Unit trust ranking 5/30
1 yr
6/29
2 yrs

24. Peter Little –
Opportunities within global asset
allocation

25. Asset Allocation Positioning
• Low potential for absolute returns in fixed income
• Commodities creating tail risk rather than offering diversification
0%
10%
20%
30%
40%
50%
60%
Equity Fixed Income & Cash Real Estate Commodities
Asset Allocation
Range
Minimum
Current

26. Fixed Income

27. Global Quantitative Easing
• G4 Central bank balance sheets have expanded by ~ $ 6.5 trl post-GFC
• G4 Central banks have doubled their share of bond market ownership
-
2
4
6
8
10
12
Central Bank Balance Sheets
(USD trl)
UNITED STATES ($) JAPAN ($) UK ($) EU ($)
0%
2%
4%
6%
8%
10%
12%
14%
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Central Banks’ Ownership of Bonds
G4 Balance Sheets (USD) Global Bond Markets
% Owned (RHS)
Source: Bloomberg, Anchor Capital
Source: Bloomberg, BIS, Anchor Capital

28. Low Yields & Inflation Expectations
• With low yields small movements in the yield curve can easily generate negative total returns in LT treasuries
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
US Rates & Inflation
US 10 Year Yield US CPI (RHS)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
US CPI expectation
Source: Bloomberg, Anchor Capital
Source: Bloomberg, Anchor Capital

29. Fixed Income Diversification Benefits
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Correlations
S&P 500 v US 10Y
Source: Bloomberg, Anchor Capital

30. Fixed Income Opportunities
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Barclays High Yield Bond Index
SPREAD (RHS) PRICE
Source: Bloomberg, Anchor Capital
Source: Bloomberg, Anchor Capital

31. Fixed Income Opportunities
Sector % End Wgt Tot Rtn 1M Tot Rtn 2M Tot Rtn QTD Tot Rtn 6M Tot Rtn YTD Tot Rtn 1Y Tot Rtn 2Y Tot Rtn 3Y
SPDR BARCLAYS HIGH YIELD BOND ETF 100% -3% -5% -6% -6% -4% -5% 2% 8%
Communications 21% -4% -5% -4% -6% -3% -2% 6% 12%
Consumer, Non-cyclical 17% -2% -2% -1% -1% 2% 4% 12% 19%
Energy 14% -6% -13% -18% -19% -17% -27% -22% -19%
Consumer, Cyclical 14% -2% -2% -1% -1% 1% 3% 8% 16%
Financial 9% -1% -1% -1% -1% 2% 3% 11% 18%
Industrial 8% -2% -4% -4% -4% -1% -1% 6% 12%
Technology 6% 0% -1% -1% -2% 1% 2% 12% 21%
Basic Materials 6% -5% -7% -12% -13% -11% -14% -8% -2%
Utilities 3% -3% -4% -4% -4% -1% 1% 8% 11%
Diversified 1% -2% -2% -1% 1% 7% 3% 15% 26%
SECTOR TOTAL RETURN
Name % End Wgt Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15
SPDR BARCLAYS HIGH YIELD BOND ETF 100% 6.8% 6.8% 6.3% 6.6% 6.3% 6.4% 6.8% 7.0% 7.5% 8.3%
Utilities 3% 5.9% 5.9% 5.6% 5.8% 5.7% 5.6% 6.0% 6.1% 6.6% 7.3%
Technology 6% 6.5% 6.4% 6.1% 6.1% 6.2% 6.3% 6.7% 6.8% 6.8% 7.1%
Industrial 8% 6.7% 6.7% 6.2% 6.4% 6.4% 6.2% 6.7% 6.8% 7.4% 8.0%
Financial 9% 5.3% 5.1% 4.8% 5.1% 5.1% 5.0% 5.4% 5.4% 5.6% 5.9%
Energy 14% 9.4% 9.6% 8.6% 9.4% 8.5% 8.6% 9.1% 10.3% 12.3% 13.6%
Diversified 1% 8.7% 8.5% 7.0% 7.1% 6.9% 6.8% 7.2% 6.9% 7.1% 7.7%
Consumer, Non-cyclical 17% 6.2% 6.0% 5.8% 5.9% 5.3% 5.9% 6.0% 6.0% 6.3% 6.7%
Consumer, Cyclical 14% 6.6% 6.5% 5.9% 6.0% 5.9% 5.8% 6.2% 6.1% 6.3% 6.7%
Communications 21% 6.3% 6.2% 5.9% 6.1% 6.0% 6.2% 6.6% 6.5% 6.8% 7.9%
Basic Materials 6% 7.0% 7.1% 6.6% 7.1% 7.1% 6.8% 7.4% 8.4% 8.9% 10.4%
SECTOR YIELD
• Oil & more recently materials are at the centre of the HY sell of

32. Global Consumer

33. Global Consumption
0%
10%
20%
30%
40%
50%
60%
70%
80%
Consumption % GDP
CHINA Consumption % GDP
US Consumption % GDP
-
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
Consumption ($ bln)
US Consumption Chinese Consumption
Source: Bloomberg, Anchor Capital Source: Bloomberg, Anchor Capital
• Chinese consumption is growing fast but has a long way to go before it can take the baton from the US consumer

34. US Household Wealth
0
50
100
150
200
250
1999
2000
2001
2002
2003
2004
2004
2005
2006
2007
2008
2009
2009
2010
2011
2012
2013
2014
2014
US Median Home Sale Prices
Existing Home Sales Prices
Median Home Sales Price (Real)
Max Home Sales Price (Real)
60
61
62
63
64
65
66
67
68
69
70
2000
2000
2001
2002
2002
2003
2004
2004
2005
2006
2006
2007
2008
2008
2009
2010
2010
2011
2012
2012
2013
2014
2014
2015
Home Ownership %
• Median real US home sale prices are 17% below pre-GFC peak
Source: Bloomberg, Anchor Capital
Source: Bloomberg, Anchor Capital

35. US Household Wealth
0
1
2
3
4
5
6
7
8
9
Home Sales
New Home Sales (mil) Existing Home Sales
0
1
2
3
4
5
Future Homes
New Home Starts (mil) Permits Issued (mil)
• Trend is good but well below pre-crisis levels
Source: Bloomberg, Anchor Capital Source: Bloomberg, Anchor Capital

36. US Household Wealth
0
2
4
6
8
10
12
US BANK DELINQUENCY RATES
RESIDENTIAL MORT COMMERCIAL MORT CREDIT CARD OTHER CONSUMER C&I LOANS
• Residential mortgage debt is the only major type of US debt that hasn’t recovered to pre-GFC levels
Source: Bloomberg, Anchor Capital

37. Chinese Consumer
• China GDP/Capita growing at 16% p.a. (US = 2% p.a.) over last 10 years
• Urbanisation rate is still on 55% (OECD = 80%)
-
10 000
20 000
30 000
40 000
50 000
60 000
GDP per Capita
$GDP Per Capita (US) $GDP Per Capita (Japan)
$GDP Per Capita (Korea) $GDP Per Capita (China)
0%
10%
20%
30%
40%
50%
60%
Chinese Urban Population
Source: Bloomberg, Anchor Capital Source: Bloomberg, Anchor Capital

38. Chinese Consumer
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
China Old vs New (Revenue Growth)
China Consumer Discretionary China Consumer Discretionary (ex-Auto)
China Real Estate China Industrials
China Real Estate (Trend) Source: Bloomberg, Anchor Capital
China Old vs New (Revenue Growth)
Consumer
Discretionary
Consumer Discretionary
(ex-auto)
Real
Estate
Industrials
Annualised (10 Years) 19.3% 14.7% 19.2% 13.4%
2015 H1 3.7% 3.4% 92.9% -12.9%
2014 6.0% 3.6% 16.9% -4.5%
2013 14.1% 13.1% 21.2% 10.8%

39. Chinese Consumer
0%
100%
200%
300%
400%
500%
600%
700%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Consumer Discretionary Revenue Growth
US vs China
US Consumer Discretionary US Consumer Discretionary (ex-Auto)
China Consumer Discretionary China Consumer Discretionary (ex-Auto)
Consumer Discretionary Consumer Discretionary (ex-auto)
US China US China
Annualised (10 Years) 3.1% 19.3% 1.7% 14.7%
2015 H1 3.6% 3.7% -1.4% 3.4%
2014 4.6% 6.0% 3.7% 3.6%
2013 5.8% 14.1% 5.0% 13.1%
Source: Bloomberg, Anchor Capital

40. Chinese Consumer
China Consumer Discretionary - SHCOMP vs China New Mega-Companies
(Revenue Growth)
Alibaba Ctrip Baidu Tencent
Consumer
Discretionary
Consumer
Discretionary
(ex-auto)
ANNUALISED 10Y
43% 74% 54% 19.3% 14.7%
H1 2015 35% 47% 36% 20% 3.7% 3.4%
2014 44% 35% 54% 31% 6.0% 3.6%
2013 59% 33% 43% 38% 14.1% 13.1%

41. Positioning

42. Asset Allocation Positioning
0%
10%
20%
30%
40%
50%
60%
Equity Fixed Income & Cash Real Estate Commodities
Asset Allocation
Range
Minimum
Current

43. RISK/RETURN UNIVERSE
HIGH
MEDIUM
LOW
2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5%
COLLECTIVE INVESTMENT SCHEMESRisk
Targeted return
WORLDWIDE
FLEXIBLE
EQUITY
SA EQUITY
MANAGED
FLEXIBLE INCOME
GLOBAL EQUITY
GLOBAL CAPITAL
PLUS
BCI UNIT TRUSTS
OFFSHORE
PRODUCTS
KEY
ASTORIA

44. This report and its contents are confidential, privileged and only for the information of the intended recipient. Anchor Capital (Pty) Ltd makes no
representations or warranties in respect of this report or its content and will not be liable for any loss or damage of any nature arising from this report, the
content thereof, your reliance thereon its unauthorised use or any electronic viruses associated therewith. This report is proprietary to Anchor Capital
(Pty) Ltd and you may not copy or distribute the report without the prior written consent of the authors.
© 2009-2015 Anchor Capital (Pty) Ltd. | An authorised Financial Services Provider Reg No # 2009/002925/07 | FSP No # 39834
Thank you