An overview of the South African Unit Trust Industry for Q2 2016

1. 2Q
Fund Observer
South Africa
2016 Q2

2. Morningstar Fund Observer | 2nd Quarter 2016
7Commentary: Quarterly Market Summary
8Analysis: Morningstar Rating Analysis of South African Domiciled
Managers
5Data: Fund Houses
6Data: Market Performance
3Data: Individual Funds
4Data: Fund Categories
Contents
©2016 Morningstar, Inc. All rights reserved. The information, data, analyses, and opinions contained herein (1) include the confidential and proprietary information of Morningstar, Inc., (2) may not be copied or redistributed, (3) do not constitute investment advice offered by
Morningstar, Inc., (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar, Inc. shall not be responsible for any trading decisions, damages, or other losses
resulting from, or related to, this information, data, analyses or opinions or their use.

3. Morningstar Fund Observer | 2nd Quarter 2016 Page 3
Morningstar
Rating*
Return (Past
Quarter)
Mstar Category
Quartile Rank
Return (1 Year)
Fund Level AUM
(R Mil)
Quart Est Net
Flow (R Mil)
Short Term Bond
Coronation Strategic Income 5 2.6 21 8.9 22 235 -628
STANLIB Income 4 2.2 57 7.9 20 439 190
Cautious Allocation
Prudential Inflation Plus 5 1.6 37 8.2 38 864 -113
ABSA Absolute 3 1.5 43 6.2 16 862 -1 185
Coronation Capital Plus 3 1.4 19 4.6 19 851 -1 197
Coronation Balanced Defensive 4 1.4 51 7.2 39 365 -378
Allan Gray Stable 5 1.3 56 15.0 40 002 1 528
Nedgroup Inv Stable 4 0.7 88 7.2 33 122 -1 451
Moderate Allocation
Allan Gray Balanced 5 1.3 24 14.9 118 559 1 657
Investec Opportunity 5 1.3 23 15.9 42 026 1 338
Prudential Balanced 4 0.3 75 5.5 13 959 239
Foord Balanced 5 0.1 82 5.5 48 992 -489
Coronation Balanced Plus 4 - 0.1 88 4.3 82 740 -1 098
Discovery Balanced 4 - 0.4 92 5.6 16 833 897
South African Equity
Coronation Top 20 3 0.9 30 - 0.9 17 660 -619
Allan Gray Equity 4 0.9 32 10.8 39 292 -729
Old Mutual Investors 4 0.6 41 3.4 13 556 -156
Nedgroup Inv Rainmaker 3 0.6 42 4.2 15 318 -495
Foord Equity 5 - 0.1 62 0.7 12 345 -394
Global Equity
Allan Gray - Orbis Global Equity FF 5 1.3 9 17.8 15 580 -225
*Morningstar rates investments from 1 to 5 stars based on risk-adjusted performance relative to similar investments over a minimum of 3 years
Performance and Estimated Net Flows for Largest 20 Funds by AUM
©2016 Morningstar, Inc. All rights reserved. The information, data, analyses, and opinions contained herein (1) include the confidential and proprietary information of Morningstar, Inc., (2) may not be copied or redistributed, (3) do not constitute
investment advice offered by Morningstar, Inc., (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar, Inc. shall not be
responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses or opinions or their use.
AG Balanced
AUM: R115bn
AG Equity
AUM: R40bn
AG Stable
AUM: R38bn
Coro Bal Defensive
AUM: R39bn
Coro Bal Plus
AUM: R84bn
Coro Capital Plus
AUM: R21bn
Foord Balanced
AUM: R48bn
Investec Opportunity
AUM: R40bn
Prudential Inf Plus
AUM: R38bn
0
50
100
150
200
250
300
350
400
450
0 50 100 150 200 250 300 350
Avg Mkt
Cap
(R bn)
# of holdings
10 Largest Funds: Market Cap vs # of holdings
Nedgroup Stable

4. Morningstar Fund Observer | 2nd Quarter 2016 Page 4
ASISA Categories Return (1 Month)
Return (Past
Quarter)
1 Year Return
Category AUM
(Rm)
Quart Est Net
Flow (Rm)
South African IB Variable Term 3.6 4.2 5.7 44 415 -1 586
South African IB Short Term 0.7 2.0 7.3 85 054 53
Global RE General - 5.4 1.5 29.8 8 802 -42
South African MA Low Equity - 1.3 1.4 6.7 236 675 2 773
South African EQ Mid/Small Cap 0.4 1.1 1.6 6 704 -55
South African MA Medium Equity - 2.0 0.9 5.6 48 468 -685
South African MA High Equity - 2.5 0.6 5.3 426 532 5 069
South African MA Flexible - 2.3 0.5 2.4 55 534 1 683
South African EQ General - 2.2 0.4 1.3 285 087 -424
Global MA Low Equity - 7.0 0.2 19.9 3 728 322
Worldwide MA Flexible - 5.4 0.0 8.9 23 346 257
South African RE General - 0.4 - 0.4 9.6 64 654 -829
Global MA High Equity - 8.0 - 0.5 14.6 11 342 744
Global MA Flexible - 8.0 - 0.5 13.3 18 285 862
Global EQ General - 9.4 - 1.7 11.6 71 081 1 050
Morningstar Categories Return (1 Month)
Return (Past
Quarter)
1 Year Return
Category AUM
(R m)
Quart Est Net
Flow (R m)
Diversified Bond 3.6 4.2 6.0 47 433 1 507
Flexible Bond 0.9 2.4 7.9 55 784 2 929
Bond - Short Term 0.9 2.3 7.6 85 885 1 688
Bond - Ultra Short Term 0.7 2.1 7.2 55 146 3 340
Global Bond - ZAR/NAD - 4.5 1.5 25.1 1 117 18
Cautious Allocation - 1.5 1.4 7.6 252 217 726
Property - Indirect Global - 5.4 0.8 27.8 9 653 784
Moderate Allocation - 2.8 0.8 6.5 427 573 4 385
Aggressive Allocation - 2.8 0.7 6.2 60 352 2 128
South Africa & Namibia Equity - 2.1 0.6 2.2 282 089 701
Flexible Allocation - 3.7 0.3 6.3 101 193 3 736
South Africa & Namibia Small-Cap Equity - 0.4 - 0.2 - 0.3 8 748 -103
Property - Indirect South Africa & Namibia 0.0 - 0.3 10.3 65 339 -451
Global Large-Cap Blend Equity - 9.1 - 1.6 12.7 60 035 1 293
Africa Equity - 9.5 - 1.9 - 7.7 2 201 -68
Performance and Estimated Net Flows by Fund Category
©2016 Morningstar, Inc. All rights reserved. The information, data, analyses, and opinions contained herein (1) include the confidential and proprietary information of Morningstar, Inc., (2) may not be copied or redistributed, (3) do not constitute investment
advice offered by Morningstar, Inc., (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar, Inc. shall not be responsible for any trading
decisions, damages, or other losses resulting from, or related to, this information, data, analyses or opinions or their use.

5. Morningstar Fund Observer | 2nd Quarter 2016 Page 5
AUM (R Mil)
(30/06/2016)
Quarterly Net-
Flow (R Mil)
Net-Flow Rank
# of 4 & 5
Star** Rated
Funds
Total # of Star
Rated Funds
% of Funds
rated 4 & 5
Stars
ABSA Fund Managers 36 235 -1 088 35 8 60 13%
Allan Gray Unit Trust Mgmt 216 053 2 614 5 11 12 92%
Ashburton Management Company 10 422 411 15 8 21 38%
Boutique Collective Investments 60 058 5 099 1 50 152 33%
Cadiz Collective Investments 1 300 19 23 1 12 8%
Ci Collective Investments 5 917 -204 33 9 39 23%
Community Growth Mgmt Co 765 6 24 0 2 0%
Coronation Management Co 226 288 -4 735 37 29 62 47%
Discovery Life Collective Inv 29 679 1 263 9 2 10 20%
Element Unit Trusts 876 -68 30 3 15 20%
FNB Unit Trusts 280 -4 25 0 1 0%
Foord Unit Trusts 74 768 338 17 21 21 100%
Grindrod Collective Investments 3 101 75 22 1 6 17%
H4 Collective Investments 9 527 131 21 0 9 0%
Investec Fund Mgrs SA 130 927 4 418 2 68 136 50%
Investment Solutions UTs Ltd 17 392 -51 29 6 16 38%
IP Management Company 5 643 177 19 14 61 23%
Kagiso Collective Investments 2 080 -51 28 0 6 0%
Marriott Unit Trust Mgmt Co 9 052 -104 31 7 17 41%
MET Collective Investments Limited 34 286 1 505 7 50 136 37%
Momentum Collective Investments 42 303 -1 259 36 100 242 41%
Nedgroup Collective Investments 114 472 1 453 8 57 111 51%
Oasis Crescent Management Co 13 772 -195 32 14 32 44%
Old Mutual Unit Trust Mgrs 71 136 191 18 23 83 28%
Personal Trust Intl Mgmt Co 5 108 -4 26 2 5 40%
PPS Management Company (Pty) Ltd 11 795 343 16 4 21 19%
Prescient Management Co 49 501 2 217 6 72 168 43%
Prime CIS Mgmt Co 4 046 140 20 7 12 58%
Prudential Portfolio Managers 88 263 636 13 25 38 66%
PSG Collective Investments 25 965 434 14 12 46 26%
RECM Collective Investments 1 334 -49 27 0 5 0%
Rezco Collective Investments 9 304 1 093 11 3 8 38%
Sanlam Collective Investments 103 881 2 674 4 87 265 33%
Satrix Managers (Pty) Limited 11 219 3 640 3 0 16 0%
STANLIB Collective Investments 102 190 1 180 10 49 176 28%
STANLIB Multi-Manager 33 569 -948 34 6 42 14%
Sygnia Collective Investments 6 197 749 12 4 6 67%
*Figures are estimates which exclude Money Market and Fund of Funds
**Morningstar rates investments from 1 to 5 stars based on risk-adjusted performance relative to similar investments over a minimum of 3 years
2nd Quarter Net Flows* and Morningstar Ratings by Fund Company
©2016 Morningstar, Inc. All rights reserved. The information, data, analyses, and opinions contained herein (1) include the confidential and proprietary information of Morningstar, Inc., (2) may not be copied or redistributed, (3) do not constitute investment advice
offered by Morningstar, Inc., (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar, Inc. shall not be responsible for any trading decisions,
damages, or other losses resulting from, or related to, this information, data, analyses or opinions or their use.

6. Morningstar Fund Observer | 2nd Quarter 2016
Market Performance *
Local Market Indices 1 Month Quarter/YTD 1 Year 3 Years 5 Years
JSE All Share
JSE All Share SWIX
JSE Top 40
JSE SA Listed Property
JSE Small Cap
JSE Mid Cap
STeFI Composite
Beassa ALBI
-1.27
-3.02
1.17
-4.12
0.44
1.31
0.10
-0.43
3.83
4.12
2.63
11.04
13.03
14.80
12.77
14.32
13.81
15.68
13.35
18.54
2.270.10 17.534.58 15.36
1.84 11.073.24 14.03 15.75
6.85 5.906.180.59 1.78
4.04 4.40 5.24 6.30 7.90
Global Market Indices 1 Month Quarter/YTD 1 Year 3 Years 5 Years
MSCI World
S&P 500
FTSE 100 TR GBP
Nikkei 225 Average
Shanghai SE Composite
-0.55
0.26
4.72
1.19
2.46
6.54
-3.17
3.99
3.80
6.60
11.66
5.33
5.95
12.10
5.67
-9.47 -6.89 -21.56 6.25 11.73
13.970.45 1.18-2.47 -31.51
Top 10 Stocks by Market Cap
Quantitative
Moat
Quantitative
Fair-Value
Estimate
Quantitative
Valuation
Quantitative
Valuation
Uncertainty
Quantitative
Financial
Health
Naspers
SABMiller
Richemont
BHP Billiton
British American Tobacco
Steinhoff
Sasol
MTN
Old Mutual
Standard Bank
Narrow 89.56 Fairly Valued Medium Strong
Wide 760.51 Overvalued Low Strong
None 345.85 Overvalued High Moderate
Wide 108.99 Undervalued High Strong
Wide 1 984.01 Overvalued High Moderate
None 173.76 Fairly Valued Very High Moderate
Wide 809.77 Overvalued Low Strong
None 41.44 Undervalued High Strong
None 162.59 Undervalued High Strong
Narrow 154.49 Undervalued High Moderate
*All Returns are in base currency
JSE Sector Indices
-2.5
6.4
-1.8
-9.3
-5.3
17.8
-1.9
5.8
10.7
-2.1
-4.3
-2.8
5.3
6.2
3.3
3.0
5.0
4.8
0.0
-5.3
-18.7
14.6
7.0
-23.1
-25.0 -22.5 -20.0 -17.5 -15.0 -12.5 -10.0 -7.5 -5.0 -2.5 0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0
Basic Materials
Consumer Goods
Consumer Services
Financials
Health Care
Industrials
Technology
Telecommunication
Total Ret 1 Mo (Qtr-End) Total Ret 3 Mo (Qtr-End) Total Ret 1 Yr (Qtr-End)

7. Kyle Cox
Investment Analyst
Morningstar Investment
Management
2016 has, so far, been characterised by high levels of market volatility, with notable events both locally and abroad having a
strong impact on asset class returns during the second quarter. The UK's decision to leave the European Union fuelled
uncertainty in markets which helped buoy bond returns as investors sought out safe-haven assets, including gold. On the local
front, a stronger Rand and relatively attractive bond yields resulted in bond inflows which in turn led to domestic income-
focused categories producing the strongest performance over the quarter.
It was an interesting quarter for local markets as asset classes and sectors exhibited divergent performance through the
impact of differing underlying drivers. To this extent, rising commodity prices contributed to healthy gains from the resources,
weak growth expectations pushed financials lower, and a strengthening Rand negatively impacted most of the large rand-
hedge shares (which make up a significant portion of the FTSE/JSE All Share Index). Fixed income assets and gold benefited
from increasing risk aversion. As a result, the trend of lower returns from the largest unit trust categories continued, with
those more focused on income generation actually outperforming those with higher proportions invested in equity. The range
of returns apparent in assets and asset classes led to very similar performance from the multi-asset categories. For instance,
compared to the FTSE/JSE All Share Index 's return of 0.4%, the South African Multi-Asset categories all experienced similar,
low returns: Low Equity (1.4%), Medium Equity (0.9%), High Equity (0.6%) and Flexible (0.5%). The General Equity category
matched the index, with a return of 0.4% for the quarter.
Global markets were notably resillient during an eventful quarter, however the impact of Brexit towards the end of June
erased some of the earlier quarter gains. In US dollar terms, developed markets outperformed their emerging peers as
investors' risk appetite stalled. Continued Rand strength over the quarter pushed Rand returns from most offshore categories
into negative territory. Global Real Estate General was an exception and benefited from the strong gains in global property
markets during the quarter.
As with the first quarter of 2016, local categories dominated the list of best performing categories in the second quarter.
South African Interest Bearing Variable Term was top of the list with a healthy return of 4.2% in the second quarter, as
significant bond inflows led to declining yields and rising prices of fixed income assets. The next best performing categories
were South African Interest Bearing Short Term and Global Real Estate General with returns of 2.0% and 1.5% respectively.
With bonds outperforming equity in an environment of increased risk aversion, the categories with lower risk budgets
produced better relative returns over the quarter. In addition, Rand strength and market movements negatively impacted the
Rand returns of offshore allocations, which affected category performance.
The worst performing category for the quarter was Global Equity General with a return of -1.7%. Indeed, the impacts of Brexit
towards the end of the quarter coupled with a strengthening Rand negatively impacted all offshore categories in the second
quarter. The next worse performing category was Global Multi-Asset Flexible with a quarterly return of -0.5%.
The best performing funds in second quarter of 2016 were the Investec Global Gold fund (36.2%), the Old Mutual Gold fund
(18.9%) and the Ashburton Global Energy fund (18.0%). These results are not suprising, with higher levels of market
uncertainty tranlsating into a higher US dollar price of gold. There were also strong gains in the US dollar prices of iron ore and
oil during the quarter which helped portfolios with commodity exposure.
Meanwhile the worst performing funds included the Sanlam Pan-Europe fund(-7.2%), ABSA Global Value fund(-6.4%) and
the Aluwani Africa Equity fund (-6.3%). Rand strength as well as unfavourable market movements were the key drivers of
underperformance of the above mentioned funds over the quarter.
2016 has continued to deliver high levels of volatility which has been exacerbated by unprecedented events in global markets.
Investors have increasingly sought safe-haven assets such as bonds and gold, and, with economic growth faltering, these
traditionally less risky assets have outperformed equity in the second quarter.
*unless otherwise stated returns are quoted in Rand terms
Commentary
Local bonds show decent gains on the back of inflows, while local equities struggle in
an environment of low growth, a strengthening Rand and rising commodity prices.
Bonds outperform other asset classes as investors seek safety amidst
growing concerns in capital markets
Page 7Morningstar Fund Observer | 2nd Quarter 2016

8. Analysis Morningstar Rating Analysis : South African Domiciled
Asset Managers
Methodology
The Morningstar South African Rating Analysis of unit trusts is designed to compare managed fund ranges across South
African asset managers by aggregating their Morningstar Ratings. The research format is calculated on a quarterly basis. It
provides a quantitative assessment of the risk-adjusted return of all South African domiciled unit trusts carrying a Morningstar
Rating.
The Morningstar Rating for funds, often called the “Star Rating”, debuted in 1985 and was quickly embraced by investors. The
Morningstar Rating is a quantitative assessment of a fund’s past performance, both return and risk and is measured from a
minimum of one to a maximum of five stars. The methodology rates funds based on an enhanced Morningstar Risk-Adjusted
Return measure.
The Morningstar South African Rating Analysis aggregates the rankings of providers by brand name and thus provides a useful
insight into the strengths and weaknesses of a firm’s fund range. It is, however, not designed as a forward-looking tool and
does not indicate the future positioning of asset managers. This follows the line that the Morningstar Rating is intended for
use as the first step in the fund evaluation process.
The Morningstar South African Rating Analysis is a quantitative calculation. It delivers an Overall-Weighted and Asset-
Weighted ranking of asset managers and their South African domiciled funds. The rankings also show the percentage of assets
sitting in 4 and 5 Star rated funds across all rated assets.
The rankings by Overall-Weighted and Asset-Weighted Ratings both have their merits. The ranking by Overall-Weighted
Morningstar Rating mirrors the average quality of the overall fund range given that all funds are weighted equally. The Asset-
Weighted ranking gives a realistic assessment of an asset manager’s weakness and strength, in light of how investors
allocated assets between available investment options within the fund range.
The Morningstar Rating Analysis of Unit Trusts includes all South African retail domiciled funds with a Morningstar Rating. This
implies that funds belonging to several broad categories are excluded since they are not eligible for a Morningstar Rating. This
includes, amongst others, alternative funds, money market funds and commodity funds.
The Morningstar South African Rating Analysis includes 2 tables updated quarterly.
Table 1 shows the top asset managers in South Africa, ranked by Equal-Weighted Rating. Assets include rated South African
domiciled Unit Trusts. The column Equal-Weighted Rating shows the simple arithmetic mean of the overall Morningstar
Rating.
Table 2 shows the top asset managers in South Africa, ranked by Asset-Weighted Rating. Assets include rated South African
domiciled Unit Trusts. The columns showing the Asset-Weighted Rating represent the asset-weighted Morningstar Rating
average by the broad categories of equity, fixed income and allocation.
For both tables the column at the far right shows the percentage of assets sitting in 4 and 5 Star rated funds as a
percentage of total rated assets.
Page 8Morningstar Fund Observer | 2nd Quarter 2016

9. Analysis Morningstar Rating Analysis : South African Domiciled
Asset Managers
Table 1: Top Asset Managers in South Africa ( minimum R5 Billion, Equal-Weighted
Rating)
Table 1: shows the top asset managers in South Africa, ranked by Equal-Weighted Rating. Assets include rated South
African domiciled unit trusts. The column Equal-Weighted Rating shows the simple arithmetic mean of the overall
Morningstar Rating. The column at the far right shows the percentage of assets sitting in 4 and 5 Star rated funds as a
percentage of total rated assets.
Page 9Morningstar Fund Observer | 2nd Quarter 2016

10. Analysis Morningstar Rating Analysis : South African Domiciled
Asset Managers
Table 2: Top Asset Managers in South Africa ( minimum R5 Billion, Asset-Weighted
Rating)
Table 2 : shows the top asset managers in South Africa, ranked by Asset-Weighted Rating. Assets include rated South
African domiciled unit trusts. The columns showing the Asset-Weighted Rating represent the asset-weighted Morningstar
Rating average by the broad categories of equity, fixed income and allocation. The column at the far right shows the
percentage of assets sitting in 4 and 5 Star rated funds as a percentage of total rated assets.
Page 10Morningstar Fund Observer | 2nd Quarter 2016

11. ©2016 Morningstar, Inc. All rights reserved. The information, data, analyses, and opinions contained herein (1) include the confidential and proprietary information of Morningstar, Inc., (2) may not be copied or redistributed, (3) do not constitute investment advice offered by
Morningstar, Inc., (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar, Inc. shall not be responsible for any trading decisions, damages, or other losses
resulting from, or related to, this information, data, analyses or opinions or their use.