More money at retirement presented by Steven Nathan, addresses the major challenges for long-term investors.

1. More money at retirement
Steven Nathan, CEO 10X Investments

2. 1. Savings
2. Return on savings: after inflation and fees
• Optimal investment portfolios: Maximise risk-adjusted returns
One overriding objective: More money at retirement

3. Three major challenges for long-term investors
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Knowledge gap Behaviour gap Industry practices

4. Constructing an optimal portfolio: asset allocation, 25% offshore
Ave. real returns
Shares: +7%
Property: +4%
Bonds: +3%
Cash: +1%
Fund return 3.5% 5% 6.5%
75%
50%
25%
25%
50%
75%
Low Equity Medium Equity High Equity

5. Determining the optimal portfolio
Source: Morningstar, 10X Investments
31.1%
42.9%
61.6%
-35.1%
-39.3% -44.2%
Low Equity Medium Equity High Equity
1 year periods: 1900 - 2012
13.6%
18.9%
25.5%
-13.4% -13.6% -13.9%
Low Equity Medium Equity High Equity
5 year periods: 1900 - 2012
5.8% 7.0% 8.3%
1.5% 2.6% 4.0%
Low Equity Medium Equity High Equity
40 year periods: 1900 - 2012

6. A four letter word the industry wants you
to ignore. Fees are:
• Hard to calculate, especially conditional fees
• NOT disclosed (except by 10X)
• High vs. 5% to 6% real return
• Each 1% saved = 30% higher final pension
Fees cause you to have less money at retirement
10X

7. Investment results in the real world
S&P 500 Real returns: 20 years ended 2012. Source: Dulbar, Forbes.com
• SA fund switches cost 4% pa (per Allan Gray Balanced Funds between 2000 – 2010)

8. SA funds also under-perform

9. 10X Passive Life-stage vs. Forbes Global Best Investment View
Source: Alexander Forbes Global Manager Watch Best Investment View, 10X Investments High Equity Fund (LS 10).
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10X Fund manager ave.
Investment Returns % pa: Dec 2012 10X Fund manager ave. 10X Excess return
1 Year 24.1% 20.5% 3.6%
3 Year 15.8% 14.1% 1.7%
5 Year 11.0% 9.8% 1.3%

10. Very few funds outperformed a passive buy & hold strategy
Investment returns pa BEFORE fees: December 2012 1yr 3yr 5yr
1 Absa Asset Management Global Balanced 20.0%
2 Allan Gray 15.1% 13.1% 10.6%
3 Cadiz Global Balanced 21.5% 13.7% 9.1%
4 Coronation 21.7% 15.8% 12.2%
5 Foord Asset Management 25.6% 17.9% 12.8%
6 Investec Asset Management 20.7% 14.1% 10.7%
7 Investment Solutions (Performer) 20.8% 15.3% 11.0%
8 Investment Solutions (Spectrum) 20.7% 14.6% 9.9%
9 Momentum Balanced 20.1% 13.0% 8.9%
10 Nedgroup Investments XS Diversified Fund of Funds 18.3%
11 Oasis 21.5% 13.9% 7.9%
12 OMIGSA MacroSolutions 20.0% 13.8% 9.0%
13 OMIGSA MacroSolutions (Profile Balanced) 20.0% 13.7% 8.7%
14 Prescient Global Balanced 12.9%
15 Prudential Global Balanced 22.7% 15.7% 11.2%
16 PSG Balanced Fund 15.6%
17 Momentum AM Global Balanced Fund 19.7% 12.6% 8.4%
18 RE: CM 8.3% 10.5% 9.9%
19 SIM Global Unique 20.2% 14.3% 8.8%
20 Stanlib AM 24.6% 17.2% 8.4%
21 Symmetry Managed 23.4%
22 10X Investments LS10 24.1% 15.8% 11.0%
MEDIAN 20.21% 14.00% 9.50%
Source: Alexander Forbes
Global Manager Watch
Best Investment View,
10X Investments High
Equity Fund (LS 10).

11. • Over-confidence: We can beat the odds in investing
• Recency: We extrapolate recent events in the belief they will persist (chase past performance)
• Heard behaviour: We get comfort from what others are doing without thinking independently
• The industry markets products that play to our emotions
Behaviorial biases we suffer from

12. Address the three issues that lead to poor retirement outcomes
Knowledge gap: Robust long-term investment plan
1. Life-stage portfolios
2. Minimise fees throughout the value chain
3. Behaviour gap: Stay the course, eliminate irrational temptations, no matter what
• Eliminate choice and active management
• Focus on the long-run not the short-term
• Be sceptical of people with a crystal ball & other talking heads
More money at retirement

13. Thank you