Senate Group update

1. SENATE GROUP CONFERENCE
Meyer Coetzee – Head of Retail
Henk Kotze – PM Income Provider
9 November 2018

2. • Business Update
• Prescient Income Provider
• Prescient Balanced Fund
Agenda

3. SCALING-UP PRESCIENT
▪ Delisting in April 2017
– BEE deal
– Staff Share Scheme
3
▪ Scaling up
– People – 50% (A players)
• Head of Talent
• Graduate program
• Formalised profit pool
• Share Scheme
– Operations – 25%
– Strategy – 25%

4. PRESCIENT OWNERSHIP STRUCTURE
Post BEE & Staff Deal
Black owned
▪ 53.6% economic rights
▪ 53.6% voting rights
Prescient Empowerment
Trust (Pty) Ltd
Prescient Founders Staff & Other Minorities
56% 22% 6%
Prescient Staff Share
Scheme (Pty) Ltd
16%
Sithega Holdings (Pty)
Ltd
Prescient Foundation
NPC
75% 25%
Prescient Empowerment
Trust (Pty) Ltd
Steller Capital Partners
Limited
Preference Share Inv
19% Effective Economic
Stake in PHold
Prescient Holdings (Pty)
Ltd

5. PRESCIENT INVESTMENT TEAM
Henk Kotze
Portfolio Manager
& Analyst
Guy Toms
CIO & Head of Fixed Interest
Kevin Dewar
COO
Jabulani Ngobese
Money Market Dealer
& Analyst
Grace Debeila
Portfolio Manager &
Analyst
Cheree Dyers
CEO
Tshwarelo Mohlala
Money Market Dealer
& Analyst
Multi Asset &
Equities
PIM EXCO
Meyer Coetzee
Head: Retail
Guy Toms
CIO & Head of Fixed
Interest
Michele vd Berg
Portfolio Manager &
Analyst
Andrew Whitty
Senior Structure &
Team Advisor
Sithembiso Garane
Credit Portfolio
Manager
& Analyst
Investment Operations
& Data Science
Ishma-eel Allie
Implementation
Specialist
Rasi Maleka
Dealer
Mario Fisher
Chief Data Scientist
Igshaan Alexander
Investment Operations
Officer
Hadley Lakay
Performance Analyst
Vuyo Mvulane
Business Development Manager
Luanda Thlothalemaje
Business Development Manager
Cheree Dyers
CEO
Bongie Mgxaji
Business Development Manager
Business
Development
Martin Hammond
Portfolio Manager &
Analyst
Bastian Teichgreeber
Head: Asset Allocation
Louis Becker
Quantitative Analyst
Maitse Motsoane
Portfolio Manager &
Analyst
Seeiso Matlanyane
Portfolio Manager &
Analyst
St John Bunkell
Head: Equities
Jean-Jacques Duyvene de Wit
Portfolio Manager & Analyst
Fixed Interest

6. • Business Update
• Prescient Income Provider
• Prescient Balanced Fund
Agenda

7. PRESCIENT INTEREST BEARING TEAM
Guy Toms
Jean-Pierre du
Plessis
Grace Debeila Henk Kotze
Michele van der
Berg
Jabulani Ngobese
Tshwarelo
Mohlala
Andrew Whitty
Sithembiso
Garane
Qualification B Bus Sc (Hons) BCom (Hons), CFA
BEconSci (Actuarial
Science); CFA
(level 1)
BA (Financial
Accounting,
Economics,
Philosophy and
Politics), LLB
Matric, RE5, Money
Market RPE SAIFM
BCom (Hons)
Financial Analysis &
Portfolio
Management;
BCom (Economics
& Finance)
BSc (Maths, Stats
& Economics)
BSocSci
(Economics)
MCom (Finance &
Risk Management);
BCom (Hons)
Financial Analysis &
Portfolio
Management
Industry 33 21 10 11 16 4 3 20 10
Title
Chief Investment
Officer & Head of FI
Deputy Head FI;
Head Renewables
Portoflio Manager &
Analyst
Portfolio Manager &
Analyst
Portoflio Manager &
Analyst
Money Market
Dealer & Analyst
Money Market
Dealer & Analyst
Senior Structure &
Team Advisor
Credit Portfolio
Manager & Analyst

8. Philosophy

9. THE PRESCIENT PHILOSOPHY
▪ Valuation driven
– Compare fair value of asset classes against what is priced into market
▪ Risk focused
– Quantify potential outcomes
– Focus on reduced risk and improved consistency
▪ Maximise position for:
– Best upside in positive markets
– Minimise loss in negative markets
Consistency of return
9

10. FIXED INTEREST MANDATES INVESTMENT OBJECTIVE
▪ Investors in cash and income funds want to earn
real returns and do not want to lose money
▪ In general seek to outperform underlying benchmark indices with
lower risk AND Generate real yield for the investor
10

11. RISK RETURN: INCOME PROVIDER VS MARKET INDICES
Returns to 30 September 2018
11
Prescient Income
Provider Unit Trust (B6
Class, Net of Fees),
9.8%
ALBI, 7.9%
Cash, 6.8%
ALBI 1 - 3 Years, 7.7%
Inflation, 6.0%
Prescient Yield
Quantplus Fund, 8.4%
Prescient Income
Provider Fund, 10.3%
5%
6%
7%
8%
9%
10%
11%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Performance(p.a.)
Annual Std Deviation [Volatility]
Prescient Income Provider Unit Trust Fund vs Market Indices
Since Inception of the Fund (January 2006) to 30 September 2018

12. STRATEGY DIFFERENTIATOR
▪ Absolute return mind set with primary objective to maximise real
returns AND minimise downside risk.
▪ Seek to maximise real returns through active asset allocation within
universe of investible assets
▪ Downside risk is managed through active use of derivatives and
monitoring total portfolio value at risk (ie how much risk can the portfolio
take without breaching minimum return requirements)
12

13. CUMULATIVE RETURNS: INCOME PROVIDER
Source : Morningstar 30 September 2018
13

14. Performance

15. PRESCIENT INCOME PROVIDER FUND
Returns to 30 September 2018. Inception of PIPF Fund January 2006.
15
Prescient Income
Provider Fund A2 Inflation Real Return
2006 10.9% 5.0% 6.0%
2007 11.2% 8.6% 2.6%
2008 14.2% 10.3% 3.9%
2009 9.0% 6.3% 2.7%
2010 5.2% 3.5% 1.7%
2011 10.7% 6.1% 4.6%
2012 8.2% 5.7% 2.5%
2013 9.6% 5.4% 4.2%
2014 11.4% 5.3% 6.1%
2015 9.6% 5.2% 4.3%
2016 9.0% 7.0% 2.0%
2017 8.7% 4.6% 4.1%
2018 YTD 6.2% 4.0% 2.1%
Full Period 9.7% 6.0% 3.7%

16. ROLLING 1 YEAR RETURNS: INCOME PROVIDER VS CPI
Returns to 30 September 2018 (Source: Morningstar)
16

17. ROLLING 3 MONTH RETURNS: INCOME PROVIDER
Returns to 30 September 2018 (Source: Morningstar)
17

18. Setting the scene

19. MARSHALLING TITO
Source: Zapiro – October 2018

20. NET DEBT TO GDP
12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22
2012 Budget 36.0% 37.8% 38.5%
2013 Budget 36.3% 38.6% 39.8% 40.3%
2014 Budget 39.7% 41.9% 43.5% 44.3%
2015 Budget 40.8% 42.5% 43.1% 43.7%
2016 Budget 41.2% 44.3% 45.7% 46.2% 46.2%
2017 Budget 44.2% 45.5% 47.0% 47.6% 48.1%
2018 Budget 45.6% 48.6% 50.3% 51.4% 52.2%
2018** Budget 48.0% 50.5% 52.1% 53.7% 55.0%
Treasury Estimates
Source: National Treasury

21. GROSS DEBT TO GDP
Source: National Treasury
37
42
47
52
57
11/12 13/14 15/16 17/18 19/20 21/22 23/24 25/26
% of GDP
2014 Budget 2015 Budget 2016 Budget
2017 Budget 2018 Budget 2018 MTBPS
60% threshold

22. Investment Process

23. INTEREST BEARING PROCESS
Duration & Curve
Credit
Sweeteners
Real vs
Nominal
Prefs/
Props
International
Spread
DtD
ESG
Fair Value
Economics
Int.Yields
Inflation
Growth
EMBI&SA
Liquidity
Sentiment
Risk Management
23

24. MONEY MARKET DURATION – WHAT’S PRICED IN ABOUT INTEREST RATE MOVES?
Source: Bloomberg (as at 30 September 2018)
24
6.5%
6.7%
6.9%
7.1%
7.3%
7.5%
7.7%
7.9%
8.1%
1 2 3 4 5 6 7 8 9 12 15 18 21
Yield
Short-term Interest Rates over time
FRA's
Now
1 Month ago
3 Months ago

25. SCENARIO ANALYSIS: CURRENT
Source: Bloomberg
25
5%
6%
6%
7%
7%
8%
8%
9%
9%
10%
10%
Flat Rates Hike 50bps Hike 100bp Cut 25bp Cut 50bp
Scenario Analysis: 3-year assets
CALL 3-yr FRN 3-yr Fixed 3-year Floating CLN

26. DURATION INCOME FUNDS
As of end of 30 September 2018
26
4.00
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Jan-13 Dec-13 Nov-14 Oct-15 Sep-16 Aug-17 Jul-18
Duration(years)
Income Provider Duration
PIPF Duration 3yr Swap

27. INTEREST BEARING PROCESS
Duration & Curve
Credit
Sweeteners
Real vs
Nominal
Prefs/
Props
International
Spread
DtD
ESG
Fair Value
Economics
Int.Yields
Inflation
Growth
EMBI&SA
Liquidity
Sentiment
Risk Management
27

28. CREDIT PROCESS
▪ Internal Quantitative process
▪ Not just based on Ratings by Agencies
▪ Consider credit quality versus price of credit
28
CREDIT RISK INDICATOR
1. Distance-to-Default (listed credits)
2. Distance-to-Trigger (Banks)
3. Ratio Analysis/Altman Z-score (unlisted credits)
4. Momentum Indicator
5. ESG Policy
6. House Sentiment / Credit Rating

29. DISTANCE TO DEFAULT
Source: Bloomberg, PIM
29
0
1
2
3
4
5
6
7
Jan-03 Aug-05 Mar-08 Oct-10 May-13 Dec-15 Jul-18
Distance-to-Default of SA Banks
African Bank Investments Barclays Africa Group Ltd FirstRand
Nedbank Group Standard Bank Group Capitec Bank Holdings Ltd
Good
Credit
Poor quality
Credit

30. SA BANK RISK: CAPITAL POSITION
Unsecured Lending and Distance to Trigger
30
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
1H17 - 31 Dec FY17 - 31 Dec FY17 - 31 Dec FY17 - 31 Dec 1H18 - Sep 17 1H17 - 31 Aug 17 FY17 - 30 Sep
FSR NED ASA SBK INV CPI ABL (GB)
Personsal Loans Households (Unsecured) Overdrafts Households (Unsecured)
Credit Card Households (Unsecured) Distance to Trigger RWA

31. DISTANCE TO DEFAULT
Source: Bloomberg, PIM
31
0
1
2
3
4
5
6
7
8
Jan-03 Jun-04 Nov-05 Apr-07 Sep-08 Feb-10 Jul-11 Dec-12 May-14 Oct-15 Mar-17 Aug-18
SA Distance to Default: Consumer Discretionary Sector
Naspers Truworths International Cie Financiere Richemont SA Steinhoff International
Woolworths Holdings LTD Imperial Holding Ltd Super Group Ltd Foschini Group Ltd
Sun International Ltd Lewis Group Ltd Aspen Pharmacare Holdings Netcare

32. STEINHOFF SPREADS
0
0.5
1
1.5
2
2.5
3
3.5
4
Jun-05 Sep-06 Dec-07 Mar-09 Jun-10 Sep-11 Dec-12 Mar-14 Jun-15 Sep-16
Altman Z
Altman's Z-score Safe >2.99 1.81<Gray<2.99 Distress<1.81
Source: Bloomberg, PIM
32

33. CREDIT SPREADS
Source: Bloomberg, PIM
33

34. CONCLUSION ON CREDIT
▪ Conservative credit exposure
▪ Look for yield enhancements in market while spreads are compressing
▪ Wary of locking into long term credit at low spreads
▪ Liquidity
34

35. Protecting Income Enemy Number 1

36. HOW IS THE PORTFOLIO MANAGED?
▪ Asset allocation
– Invest across different income bearing assets to deliver the required real yield
• This means we will switch between different assets like fixed and floating interest rate instruments;
property; preference shares and offshore assets
• The exposure to any of these asset classes will be controlled so as not to put the overall fund at risk of
delivering poor returns
▪ Credit selection
– Conservative – low default risk
▪ Risk management
– Try to identify and mitigate key risks while delivering real returns through a robust risk
management process.
36

37. HEDGING INFLATION RISK
▪ Currently we are earning inflation plus 4.06% in the portfolio. That is a yield
of 8.96% - 4.90% inflation
▪ If real rates rise the portfolio will benefit
▪ There are two scenarios where real interest rates could fall that could harm
the portfolio return
1. inflation remains stable and the Reserve Bank reduces interest rates by more
than 1% - unlikely
2. the greater risk is inflation rises and with a weak economy, the Reserve Bank
lags interest rates hikes.
▪ We view the risk that inflation will rise as a key risk to earning real returns
and have put certain risk management strategies in place
37

38. GLOBAL LIQUIDITY & THE EM TRADE: KEY RISK!
▪ Source: Nedbank. Mehul Daya and Neels Heyneke
Source: Nedbank; Mehul Daya and Neels Heyneke
Key Risk as EM blow out will hurt the rand and lead to higher inflation!
215
225
235
245
255
265
275
-10
-5
0
5
10
15
20
2015 2016 2017 2018 2019
$-Liquidity (LHS,yoy%) EM FX Carry-Index
38

39. EMERGING MARKET BOND FLOWS
-10000
-8000
-6000
-4000
-2000
0
2000
4000
6000
Jun-97 Feb-00 Oct-02 Jun-05 Feb-08 Oct-10 Jun-13 Feb-16 Oct-18
South African Bond Sales to Foreigners Quarterly
SABO Index in USD
Source: Bloomberg
39

40. TRIPLE HEDGE: HEDGING THE PORTFOLIO AGAINST HIGHER INFLATION
1. Inflation linked swap – breakeven inflation 5% over 3 years.
2. USD currency option – protects portfolio from rising inflation should
rand weaken.
3. Hedge against emerging market spreads widening - rand and
inflation will come under pressure.
▪ All these strategies are held with known, low cost - will not threaten
the return outlook.
▪ Can contribute significantly to offsetting effects of higher inflation.
40

41. HEDGING INFLATION - BREAKEVEN SWAP
Source: Bloomberg
41
Entered 3y BE Swap

42. RAND CURRENCY HEDGE – DEC 2018
Source: Bloomberg
42
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 13.0 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8
PayOffProfile
ZAR
USDZAR Hedge
Buy USD Call
12.50
Sell USD Put
11.75
Sell USD Call
13.50

43. RAND CURRENCY HEDGE – MAR 2019
Source: Bloomberg
43
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 13.0 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8
PayOffProfile
ZAR
USDZAR Hedge
Buy USD Call
14.50
Sell USD Put
13.25
Sell USD Call
15.50

44. HEDGING INFLATION – HEDGING EMERGING MARKET (EM) CREDIT RISK
0
100
200
300
400
500
600
Oct-12 Jun-13 Feb-14 Oct-14 Jun-15 Feb-16 Oct-16 Jun-17 Feb-18 Oct-18
Spread
CDX Emerging Market (10 Year)
44
Source: Bloomberg

45. HEDGING EMERGING MARKET (EM) CREDIT RISK RETURN IN RANDS
Source: Prescient
0%
5%
10%
15%
20%
25%
30%
-1.00% -0.75% -0.50% -0.25% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50%
ProfitonAsset
CDX Emerging Market Spread change
Yield on Note (1 year holding period)
45

46. Prescient Income Provider
– Yield Enhancements

47. YIELD ENHANCEMENT STRATEGY
Source : Bloomberg
6 Month Jibar FRN
47
5
5.5
6
6.5
7
7.5
8
8.5
0.2
0.25
0.3
0.35
0.4
0.45
0.5
0.55
0.6
0.65
0.7
6 Month vs 3 Month Jibar (LHS) 12x15 FRA (RHS)

48. 6.5%
6.7%
6.9%
7.1%
7.3%
7.5%
7.7%
7.9%
8.1%
1 2 3 4 5 6 7 8 9 12 15 18 21
Yield
Short-term Interest Rates over time
FRA's
Now
1 Month ago
3 Months ago
1Y FIXED NCD’S – 8.40%
Source: Bloomberg
48

49. OFFSHORE CREDIT
▪ Example:
▪ Firstrand (South Africa ) CLN
– Terms
– 5 year
– $
– South Africa reference credit
– Libor + 370bps
▪ Economics
– Libor (2.46%) + spread (3.70%) = 6.16% in USD
– ZARUSD Forward 4.70%
– Total yield in ZAR = 4.70%+ 6.16% = 10.86%
49

50. Prescient Income Provider –
Summary

51. IN SUMMARY
▪ Current yield of 8.96% (with current inflation of 4.90%, implies a real yield of
above 4.0%)
▪ Low duration – good yield obtainable without taking on duration risk
▪ Credit risk conservative
▪ Low spread risk to due relatively low average term of assets (1.9)
▪ All offshore assets are hedged into Rand
▪ Low capital sensitivity in the portfolio
▪ Inflation Hedges protects the Real Yield
51

52. DURATION VS YIELD
As of end of 30 September 2018
52
Income Provider
ALBI
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
- 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
Yield
Duration
Duration vs Yield

53. ASSET ALLOCATION: PRESCIENT INCOME PROVIDER
53
As at 12 October 2018
Fund Duration 0.75
ALBI 1-3 Year Duration 1.74
Fund Yield 8.96%
ALBI 1-3 Year Yield 7.48%
TTM 1.9y
Fund Rating AA+

54. CREDIT RATINGS: INCOME PROVIDER
As at 12 October 2018
54
FUND CREDIT RATINGS
Category Rating Factor PIPF
Money Market Rating 38.2
Banks
ABSA BANK LTD F1+ 0 8.8
FIRSTRAND BANK LTD F1+ 0 11.6
STANDARD BANK LTD F1+ 0 6.4
NEDBANK LTD F1+ 0 6.4
SOE's
DEVELOPMENT BANK OF SOUTHERN AFRICA F1+ 0 0.6
LANDBANK F1+ 0 2.3
Corporates and Conduits
ASPEN PHARMACARE HOLDINGS LTD F1 65 0.3
SOUTH CHESTER F1+ 0 0.9
FOSCHINI GROUP LIMITED F1 65 0.7
Credit Linked Notes 11.5
Banks
FIRSTRAND BANK LTD AA+ 18 0.3
Firstrand Bank - subordinated (new style) AA- 40 0.2
STANDARD BANK LTD AA+ 18 0.3
NEDBANK LTD AA 30 0.1
INVESTEC BANK LTD AA 30 0.1
SOE's
ESKOM HOLDINGS LTD GG AAA 0 0.8
DEVELOPMENT BANK OF SOUTHERN AFRICA AA+ 18 3.1
INDUSTRIAL DEVELOPMENT CORPORATION SA LTD AA+ 18 1.0
TRANSNET SOC LTD AA+ 18 3.4
Corporates
MERCEDES-BENZ SOUTH AFRICA LIMITED AAA 0 1.0
ANGLO AMERICAN SA FINANCE AA+ 18 0.5
GROWTHPOINT PROPERTIES LIMITED AAA 0 0.4
WOOLWORTHS HOLDINGS LIMITED A+ 55 0.5
Bonds 27.55
Banks
ABSA BANK LTD AA+ 1.7
FIRSTRAND BANK LTD AA+ 6.5
STANDARD BANK LTD AA+ 4.4
NEDBANK LTD AA 3.5
INVESTEC BANK LTD AA 2.8
BNP PARIBAS AAA 0 0.2
BANK OF CHINA LIMITED AAA 0 1.8
FUND CREDIT RATINGS
Category Rating Factor PIPF
SOE's
DEVELOPMENT BANK OF SOUTHERN AFRICA AA+ 18 0.4
INDUSTRIAL DEVELOPMENT CORPORATION SA LTD AA+ 18 3.3
Corporates
STANDARD BANK GROUP AA 2.5
MERCEDES-BENZ SOUTH AFRICA LIMITED AAA 0 0.2
BARLOWORD AA+ 18 0.01
ILB's 2.6
Banks
ABSA BANK LTD AA+ 0.1
STANDARD BANK LTD AA+ 1.1
Scatec Solar CPV A- 100 1.4
Offshore 13.6
SA Banks
Firstrand AA+ 18 0.4
Firstrand - subordinated (new style) AA- 40 2.8
Standard Bank AA+ 18 3.5
Nedbank AA 30 0.3
Offshore Banks
Barclays AAA 0 0.4
Goldman Sachs AAA 0 0.2
Bank of New York A 75 0.4
SOE's
RSA AAA 0 3.9
Transnet AA+ 18 0.5
Other
Offshore Property 1.21
Other 6.5
Property 2.5
Prefs 4.0
TOTAL 16
Fund rating AA+
Total 100.00

55. • Business Update
• Prescient Income Provider
• Prescient Balanced Fund
Agenda

56. PRESCIENT BALANCED RANGE
Prescient Balanced Fund
• Multi Asset High Equity
• SAA – with TAA on high conviction
• No explicit risk target - aims to beat BM through enhancements
Prescient Absolute Balanced Fund
• Multi Asset High Equity – aims to meet BM with less risk
• Moderate TAA tils at lower conviction
• Aims to limit drawdown over rolling 12 months
Term 1 year 2 years 3 years 4 years
Ranking 1st 1st 1st 1st
Prescient Absolute Defensive Fund
• Multi Asset Low Equity
• SAA – with TAA on high conviction
• Aims to protect capital over rolling 12 months
Prescient Positive Return Fund
• Multi Asset Medium Equity
• Moderate TAA tils at lower conviction
• Guarantees capital protection over rolling 12 months
Source: Morningstar, as at 30 September 2018

57. ASSUMPTIONS FOR OPTIMIZATION
Source : PIM
Long Term Returns

58. OPTIMIZATION
Efficient Frontier

59. STRATEGIC ASSET ALLOCATION
Weights on Efficient Frontier

60. PRESCIENT BALANCED FUND
Key Characteristics
Ideal for a core holding in a diversified
balanced portfolio:
▪ SAA expected to deliver inflation beating performance
▪ Return expectation above median of balanced funds
▪ Cost efficiency thereby lowers overall TER and consistent with
Retirement Reform

61. • Portable Alpha
• Tactical Asset Allocation
• Low Fees
Enhancements

62. SA DOMESTIC EQUITY MANAGERS
Category top quartile comparison vs SWIX
Source: Morningstar, as at 30 Sep 2018

63. WHAT IS PRESCIENT’S EDGE?
Focus on core skills …
Interest
Bearing
Index
Tracking
Derivatives
Enhanced
Indexation

64. WHAT IS ENHANCED INDEXATION?
Enhanced Indexation needs Portable Alpha
Cash Futures+ = Market Returns
Cash + α Futures+ = Market Returns
+ α

65. TRACK RECORD
Prescient Core Equity capability versus FTSE/JSE SWIX Index (gross returns)
Source: PIM, as at 30 Sep 2018
Period Prescient Core Equity capability FTSE/JSE SWIX Alpha
I Year 1.07% 0.86% 0.21%
2 Years (Ann) 4.08% 3.89% 0.20%
3 Years (Ann) 5.91% 5.58% 0.33%
Since 1 Sep 2014 (Ann) 5.37% 4.95% 0.42%

66. SA DOMESTIC EQUITY MANAGERS
Managers don’t consistently outperform
Source: Morningstar, as at 30 Sep 2018

67. • Portable Alpha
• Tactical Asset Allocation
• Low Fees
Enhancements

68. TACTICAL ASSET ALLOCATION
68
Asset Allocation View
- defined by various multi factor models
- systematic, focus on top down asset-class views
Alpha
Market Neutral
- long SWIX vs short TOP40
- long GBP vs short USD
Beta
Asset Class Tilts
- overweight equities
- underweight bonds
Vega
Volatility Trades
- writing puts when volatility is high
- buying calls when volatility is low
Positions are sized systematically based on level of conviction and band width

69. HURDLE RATES
69
Positions are sized systematically based on level of conviction and band width
Lower Conviction
Calls
High Conviction
Calls
Prescient Balanced Fund – High Conviction Required

70. TACTICAL ASSET ALLOCATION
70
Value Equities
• Price to Earnings
• Price to Book
• Price to Sales
• Relative EY
Rates
• Real Yields
• Relative Yields
• Nominal Yield to GDP
• Term Premium
Credit
• Spread vs Sovereign
Property
• Dividend Yield
• Spread vs Bonds
•(…)
Economics
• Prescient Eco Indicator
• Profit Margins
• ISM, PMIs
• Yield Curve
• Labour Market
Liquidity
• Monetary Policy
• Financial Conditions
• Funding Stress
Sentiment
• Money Flow
• Net Positioning
• Risk Survey

71. SYSTEMISED DECISION MAKING
71
Process, Process, Process

72. TACTICAL TILTS
72
Unemotional
Prescient Balanced
Asset Class SAA
Strong
Underweight
Moderate
Underweight Neutral
Moderate
Overweight Strong Overweight
Local Equities 45.00% 40.00% 45.00% 45.00% 45.00% 50.00%
Local Bonds 12.00% 7.00% 12.00% 12.00% 12.00% 17.00%
Local ILBs 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
Local Property 5.00% 2.00% 5.00% 5.00% 5.00% 8.00%
Local Prefs 0.00% 0.00% 0.00% 0.00% 0.00% 3.00%
Local Cash 10.00% 0.00% 10.00% 10.00% 10.00% 20.00%
Global Equities 20.00% 15.00% 20.00% 20.00% 20.00% 25.00%
Global Treasuries 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
Global HYCorp 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
Global IG Corp 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
Global Property 0.00% 0.00% 0.00% 0.00% 0.00% 3.00%
Global Cash 5.00% 5.00% 5.00% 5.00% 5.00% 15.00%
Global EMEquities 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
Global EMBonds 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%
African Equities 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Alternatives 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
FX Hedge / USDZAR 0.00% 0.00% 0.00% 0.00% 0.00% 5.00%

73. • Portable Alpha
• Tactical Asset Allocation
• Low Fees
Enhancements

74. Assumptions:
• Retire at 60
• Income 5% (capped at 17.5%)
• Pension Escalation 6% p.a.
• Gross Investment Return of
10% p.a.
• Investment Fees
• 1.5% p.a.
• 0.5% p.a.
DO FEES MATTER?
In Retirement

75. Assumptions:
• Retire at 60
• Income 5% (capped at 17.5%)
• Pension Escalation 6% p.a.
• Gross Investment Return of
10% p.a.
• Investment Fees
• 1.5% p.a.
• 0.5% p.a.
DO FEES MATTER?
In Retirement
12 yrs

76. Outcome

77. PRESCIENT BALANCED FUND
Cumulative Returns Since Inception – 1 June 2014 to 30 Sep 2018
Source: Prescient, Morningstar 30 Sep 2018.
Actual Fund Returns –
June 2014 to Sep 2018
(annualised)
Fund 7.9%
Category Average 5.5%

78. PRESCIENT BALANCED FUND
Rolling 12 Months vs Category Average Since Inception
Source: Prescient, Morningstar 30 Sep 2018

79. RANK MULTI—ASSET HIGH EQUITY CATEGORY
Source: Prescient, Morningstar 30 June 2018
Cumulative monthly returns since inception on 1 June 2014

80. CONCLUSION
▪ Ask us to explain our Philosophy and Process
– Our Philosophy is valuation driven with a focus on risk management.
– Our Process is active, research driven and quantitative – we base decisions on facts and not on emotions or
beliefs.
▪ Ask us to show that what we say we do, we actually do?
– Each trade and position in the portfolio is backed by a disciplined research and investment process, that can be
shown to any investor who interacts with us.
▪ Evaluate whether the above actually works in real life.
– The track record for the Balanced Fund, which shows that the Fund is top decile since launch more than 4 years
ago, provides a good indication that the process works in real life.
How to evaluate the Prescient Balanced Fund?

81. Price is what you pay …
value is what you get
- Warren Buffet

82. Regulatory Information
Thank You
Business address:
Prescient House, Westlake Business Park, Otto Close,
Westlake, Cape Town, 7945
Tel: 021 700 3600
Fax: 021 700 3700
The information contained herein is provided for general information purposes only. This information
does not constitute a solicitation, recommendation, guidance or proposal, and the service provided is not
intended nor does it constitute financial, tax, legal, investment or other advice.
Whilst reasonable steps are taken to ensure the accuracy and integrity of information contained herein,
Prescient accepts no liability or responsibility whatsoever if any information is, for whatever reason,
incorrect. Prescient further accepts no responsibility for any loss or damage that may arise from reliance
on information contained herein.
Prescient Investment Management is a Financial Services Provider authorised under the Financial
Advisory and Intermediary Services Act of 2002 (FSP 612).
Signatory to the UN PRI