The document analyzes the performance of various multi-manager funds in the AA Prudential High and Medium categories over the last 3 years. It finds that asset allocation was the main driver of returns, explaining 92% of performance, while stock picking contributed 6% and market timing only 2%. For the high category, the top performing fund was Southern Charter Growth FoF, while for the medium category, the top performers were InvSolutions MMBalanced FoF and Southern Charter Balanced FoF. The document provides various metrics to analyze risk-adjusted performance and the contribution of factors like asset allocation, stock picking and market timing.

1. The Inconvenient Truth

2. Asset Allocation Drives
Everything
Southern Charters fund performance over the last three years vindicates
investment research indicating that 92% of performance comes from Asset
Allocation,
6% from stock picking, and 2% from market timing
Determinants of Performance - Brinson et al Financial Analysts Journal

6. At Southern Charter we select fund
managers who have a value investment
style bias. An investment style pioneered
by Warren Edward Buffett, considered to
be one of the most successful investors in
the world.

7. Our Researched - Defensive Fund Manager Selection
Equity Fixed Interest Offshore
Offshore
Property
Commodity
SA Property

8. Performance

12. Multi-Manager UT Fund Diagnostics
September 2011
● Bhekinkosi Khuzwayo ● Dieter Hendricks

13. Explanation of Risk and Performance Tables
Measure of stock
Absolute selection ability
Total Risk
incurred Measurement of sensitivity of the Measure of statistical
fund to market movements significance of timing
reward
Alpha
Absolute Measures Relative Manager Measures
Measures
Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection
for Total Ratio Tracking Return Selection Timing P- Skill Ann.
Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) Aggression
Relative total
risk incurred
Total return for the period Abnormal returns
Abnormal returns obtained through
asset allocation Unique risk
obtained from
Return per unit bets incurred through
incurring stock
of risk taken. stock selection
selection bets

14. AA Prudential High category –
Performance Analysis for last 36 Months
Summary Performance Analysis of the AA Prudential High Category:Last 36 months
(October-2008 to September-2011)
Absolute Measures Relative Manager Measures
Measures
Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection
for Total Ratio Tracking Return Selection Timing P- Skill Ann.
Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) Aggression
Southern Charter Growth FoF 37.34 9.70 0.12 ( 1) 0.96 2.37 0.24 ( 1) -0.02 ( 8) 0.26 ( 2) 0.05 -0.17 ( 8) 2.20
Momentum Accumulator FoF 29.51 11.26 0.06 ( 2) 1.12 2.86 0.08 ( 2) 0.32 ( 1) -0.25 (11) 0.10 2.69 ( 1) 2.48
ABSAManaged CPI + 7% FoF A 28.41 9.94 0.06 ( 3) 0.98 2.55 0.06 ( 3) 0.08 ( 5) -0.03 ( 6) 0.86 0.67 ( 6) 2.54
Analytics Balanced FoF A 28.38 10.83 0.05 ( 5) 1.09 2.02 0.05 ( 4) -0.04 ( 9) 0.09 ( 5) 0.42 -0.41 ( 9) 1.79
AS Forum Aggressive FoF 28.35 10.70 0.05 ( 4) 1.08 1.94 0.05 ( 5) -0.08 (10) 0.13 ( 3) 0.21 -0.97 (10) 1.74
APS Managed Growth FoF A 27.76 10.82 0.05 ( 6) 1.08 2.30 0.04 ( 6) 0.08 ( 6) -0.04 ( 7) 0.76 0.73 ( 4) 2.14
Average 26.63 10.19 0.04 1.00 2.98 0.02 0.01 0.00 0.36 0.16 2.56
VPFP CPI Plus 6 FoF A 25.82 7.88 0.04 ( 7) 0.75 3.66 0.01 ( 7) 0.10 ( 4) -0.09 ( 9) 0.59 0.72 ( 5) 2.75
Momentum Aggressive Prudential FoF B1 24.43 9.38 0.02 ( 8) 0.93 2.57 -0.03 ( 8) 0.18 ( 3) -0.21 (10) 0.13 1.59 ( 3) 2.38
ABSAPrudential FoF 23.92 7.84 0.02 (10) 0.76 3.44 -0.04 ( 9) -0.15 (11) 0.12 ( 4) 0.42 -1.29 (11) 2.49
Dynamic Wealth Creator FoF A 23.91 11.41 0.02 ( 9) 1.13 2.96 -0.05 (10) 0.00 ( 7) -0.05 ( 8) 0.75 0.02 ( 7) 2.66
IndequityDynamic FoF 22.27 9.48 0.01 (11) 0.87 4.40 -0.07 (11) -0.61 (12) 0.54 ( 1) 0.02 -3.26 (12) 3.89
STANLIB Mod Aggressive FoF A 19.49 12.98 0.00 (12) 1.27 4.70 -0.15 (12) 0.28 ( 2) -0.43 (12) 0.05 1.61 ( 2) 3.68
Source - Cadiz - Multi-Manager fund diagnostic for 3yr period
ending 31 September 2011

15. Summary Performance Analysis of the AA Prudential Medium Category:Last 36 months
(October-2008 to September-2011)
Performance Analysis for last 36 Months
Absolute Measures Relative Manager Measures
AA Prudential Medium category –
Measures
Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection
for Total Ratio Tracking Return Selection Timing P- Skill Ann.
Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) Aggression
InvSolutions MMBalanced FoF 36.79 9.91 0.12 ( 2) 1.23 2.71 0.19 ( 1) 0.11 ( 8) 0.07 ( 9) 0.51 1.19 ( 8) 1.98
Southern Charter Balanced FoF 34.85 8.05 0.12 ( 1) 1.00 1.86 0.16 ( 2) -0.02 (14) 0.18 ( 4) 0.07 -0.25 (14) 1.77
Baroque Moderato FoF 32.66 7.57 0.11 ( 3) 0.94 1.62 0.12 ( 3) -0.03 (15) 0.15 ( 5) 0.09 -0.36 (15) 1.47
FG Saturn Flexible FoF A1 31.64 9.68 0.08 ( 6) 1.21 2.50 0.08 ( 5) 0.24 ( 3) -0.16 (19) 0.13 2.75 ( 2) 1.83
AmityPrudent FoF 30.96 6.97 0.10 ( 4) 0.85 2.32 0.09 ( 4) 0.00 (12) 0.09 ( 8) 0.44 0.05 (12) 1.96
Financial Alliance Infl+5% FoF 30.91 8.83 0.08 ( 7) 1.10 1.87 0.07 ( 6) 0.07 (10) 0.01 (12) 0.96 0.82 (10) 1.70
Select Manager Prudential Active FoF 29.92 8.16 0.08 ( 8) 1.00 2.28 0.06 ( 8) -0.29 (24) 0.35 ( 2) 0.00 -3.05 (24) 2.00
ABSAManaged CPI + 5% FoF A 29.77 6.67 0.09 ( 5) 0.80 2.80 0.07 ( 7) 0.10 ( 9) -0.03 (14) 0.82 0.92 ( 9) 2.28
AS Forum Moderate FoF 29.57 8.67 0.07 ( 9) 1.09 1.67 0.04 ( 9) -0.16 (23) 0.20 ( 3) 0.02 -2.34 (23) 1.41
IndequityBalanced Value FoF 28.23 8.12 0.06 (10) 0.91 3.85 0.03 (10) -0.56 (25) 0.59 ( 1) 0.00 -3.52 (25) 3.31
Momentum Builder FoF 28.13 9.61 0.05 (12) 1.16 3.21 0.01 (12) 0.20 ( 4) -0.19 (21) 0.25 1.45 ( 5) 2.87
ABSAManaged CPI + 6% FoF A 27.41 8.30 0.05 (14) 1.00 2.69 0.00 (13) 0.03 (11) -0.03 (13) 0.86 0.25 (11) 2.69
NFB Balanced FoF A 27.31 7.77 0.05 (13) 0.96 1.98 0.00 (14) 0.17 ( 5) -0.16 (20) 0.14 1.84 ( 3) 1.88
Average 27.21 8.20 0.05 1.00 2.38 0.00 0.00 0.00 0.34 -0.06 2.05
Dynamic Wealth Accumulator FoF A 26.57 9.38 0.04 (16) 1.16 2.45 -0.03 (16) -0.06 (17) 0.03 (11) 0.79 -0.56 (16) 2.11
VPFP CPI Plus 4 FoF A 26.37 5.32 0.06 (11) 0.61 3.79 0.01 (11) 0.15 ( 7) -0.14 (18) 0.27 1.43 ( 6) 2.19
STANLIB MMMed EquityFoF A 26.19 7.42 0.04 (15) 0.93 1.13 -0.02 (15) -0.09 (18) 0.07 (10) 0.19 -2.01 (22) 0.98
Kruger Balanced FoF A 25.70 8.10 0.04 (17) 1.00 1.78 -0.04 (17) -0.12 (20) 0.09 ( 7) 0.38 -1.45 (20) 1.76
STANLIB Moderate FoF A 25.52 9.92 0.03 (18) 1.20 3.51 -0.05 (18) 0.26 ( 2) -0.31 (24) 0.08 1.80 ( 4) 3.00
Analytics Moderate FoF A 24.88 8.70 0.03 (19) 1.09 1.70 -0.06 (20) -0.15 (22) 0.09 ( 6) 0.31 -2.01 (21) 1.54
Four Plus Growth FoF A 24.75 7.80 0.03 (20) 0.96 1.97 -0.05 (19) 0.26 ( 1) -0.32 (25) 0.00 3.25 ( 1) 1.69
Glacier FS Moderate FoF 23.57 8.73 0.02 (21) 1.09 1.79 -0.09 (22) 0.00 (13) -0.09 (17) 0.34 -0.01 (13) 1.62
Platinum Balanced Pru FoF 23.47 7.03 0.01 (22) 0.82 3.05 -0.07 (21) 0.16 ( 6) -0.23 (23) 0.13 1.24 ( 7) 2.63
APS Moderate FoF A 23.24 8.70 0.01 (23) 1.08 1.96 -0.10 (23) -0.05 (16) -0.04 (16) 0.69 -0.59 (17) 1.85
Bastion Moderate FoF A 20.64 8.13 -0.01 (24) 1.01 1.79 -0.15 (24) -0.12 (19) -0.03 (15) 0.75 -1.38 (19) 1.78
Quantum Balanced FoF 11.15 7.37 -0.12 (25) 0.86 3.21 -0.37 (25) -0.14 (21) -0.22 (22) 0.19 -1.01 (18) 2.96
Source - Cadiz - Multi-Manager fund diagnostic for 3yr period ending 31 September 2011

16. Summary Performance Analysis of the AA Prudential Low Category:Last 36 months
(October-2008 to September-2011)
Absolute Measures Relative Manager Measures
Performance Analysis for last 36 Months Measures
Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection
Source - Cadiz - Multi-Manager fund diagnostic for 3yr period ending 31 September 2011
for Total Ratio Tracking Return Selection Timing P- Skill Ann.
Period Risk Error Value Aggression
AA Prudential Low category –
(Rank) (Rank) (Rank) (Rank) (Rank)
Southern Charter Defensive FoF 32.83 4.70 0.16 ( 1) 1.05 2.13 0.18 ( 1) -0.18 (33) 0.36 ( 2) 0.00 -2.09 (32) 1.82
FG Venus Cautious FoF A 32.40 5.34 0.14 ( 3) 1.20 2.45 0.16 ( 2) -0.01 (22) 0.17 ( 8) 0.19 -0.09 (21) 2.27
SMMI Defensive FoF A 31.41 5.22 0.13 ( 4) 1.19 2.23 0.14 ( 3) 0.22 ( 8) -0.08 (26) 0.53 2.19 ( 7) 2.07
Metropolitan OdysseyCons FoF 31.15 4.20 0.15 ( 2) 0.98 1.44 0.14 ( 4) -0.07 (29) 0.22 ( 6) 0.01 -1.21 (30) 1.28
STANLIB Conservative FoF A 29.59 4.85 0.11 ( 8) 1.04 2.48 0.11 ( 5) 0.34 ( 2) -0.23 (38) 0.10 2.94 ( 4) 2.37
NFB Cautious FoF A 29.23 3.96 0.12 ( 5) 0.91 1.53 0.10 ( 6) 0.29 ( 5) -0.18 (37) 0.03 4.32 ( 1) 1.38
GFAStable FoF 28.97 3.90 0.12 ( 7) 0.91 1.46 0.10 ( 8) -0.02 (24) 0.12 (13) 0.13 -0.37 (23) 1.36
VPFP CPI Plus 2 FoF A 28.79 3.69 0.12 ( 6) 0.77 2.19 0.10 ( 7) 0.23 ( 6) -0.13 (33) 0.25 2.46 ( 6) 1.95
ABSAManaged CPI + 3% FoF A 28.60 4.82 0.09 (12) 1.11 1.91 0.08 (10) 0.04 (18) 0.04 (16) 0.70 0.48 (17) 1.85
Third Circle Defensive FoF 28.31 4.47 0.10 (10) 0.92 2.51 0.09 ( 9) -0.26 (40) 0.35 ( 3) 0.01 -2.43 (36) 2.24
STANLIB Mod ConservFoF A 28.06 7.91 0.06 (17) 1.81 4.53 0.06 (13) 0.30 ( 3) -0.24 (39) 0.18 2.05 ( 8) 3.04
Kruger Prudential FoF A 27.79 4.35 0.09 (13) 0.99 1.78 0.07 (11) 0.07 (15) 0.00 (21) 0.98 0.77 (13) 1.78
Momentum Consolidator FoF 27.51 5.79 0.07 (15) 1.36 2.47 0.05 (15) 0.04 (17) 0.01 (19) 0.94 0.48 (18) 1.96
Celtis Conservative FoF A 27.15 4.19 0.08 (14) 1.00 1.22 0.06 (14) -0.11 (31) 0.17 ( 9) 0.01 -2.15 (34) 1.11
Stringfellow Stable FoF 26.92 7.52 0.05 (24) 1.82 3.76 0.03 (19) 0.14 (12) -0.11 (31) 0.27 1.71 (12) 1.74
Dynamic Wealth Preserver FoF A 26.87 6.99 0.05 (23) 1.69 3.26 0.03 (18) 0.05 (16) -0.02 (22) 0.88 0.58 (16) 1.69
AmityConserver FoF 26.80 3.16 0.10 (11) 0.48 3.24 0.07 (12) 0.22 ( 7) -0.16 (36) 0.27 1.90 ( 9) 2.43
ABSAManaged CPI + 4% FoF A 26.58 6.17 0.05 (22) 1.40 3.04 0.03 (17) 0.08 (13) -0.04 (23) 0.78 0.61 (15) 2.61
Financial Alliance Infl+3% FoF 26.55 5.94 0.05 (20) 1.42 2.36 0.03 (20) 0.19 (10) -0.16 (35) 0.08 2.56 ( 5) 1.51
AS Forum Cautious FoF 26.09 4.44 0.06 (18) 1.06 1.35 0.03 (21) -0.19 (34) 0.22 ( 5) 0.00 -3.48 (40) 1.15
STANLIB MMLow EquityFoF A 25.95 4.05 0.06 (16) 1.00 0.55 0.03 (22) 0.00 (21) 0.03 (17) 0.31 -0.16 (22) 0.54
Noble PP Strategic Income FoF A 25.69 2.02 0.10 ( 9) 0.35 2.96 0.04 (16) -0.04 (27) 0.09 (15) 0.26 -0.68 (27) 1.35
4i Stable FoF 25.56 5.10 0.04 (26) 1.20 1.88 0.01 (26) -0.35 (41) 0.37 ( 1) 0.00 -5.72 (42) 1.28
Select Manager Cautious Managed FoF 25.53 3.63 0.06 (19) 0.79 1.99 0.03 (23) -0.20 (36) 0.22 ( 4) 0.02 -2.48 (37) 1.66
Skyblue Kimberlite Cautious FoF 25.26 3.79 0.05 (25) 0.78 2.28 0.02 (25) 0.07 (14) -0.05 (24) 0.67 0.73 (14) 2.09
ABSACautious FoF A 25.14 3.28 0.05 (21) 0.55 3.03 0.03 (24) 0.35 ( 1) -0.33 (42) 0.02 3.25 ( 3) 2.25
Average 25.06 4.57 0.04 1.02 2.27 0.01 0.00 0.00 0.30 -0.14 1.81
Platinum Income Provider FoF 24.49 2.72 0.04 (27) 0.53 2.54 0.01 (27) 0.15 (11) -0.13 (34) 0.16 1.87 (10) 1.61
S-BRO Defensive FoF A 24.42 3.66 0.03 (28) 0.86 1.31 0.00 (28) -0.11 (30) 0.11 (14) 0.08 -2.14 (33) 1.11
STANLIB Balanced Trustees FoF A 23.79 4.08 0.02 (29) 0.98 1.06 -0.02 (29) -0.04 (26) 0.02 (18) 0.69 -0.86 (28) 1.05
NeFG Income Provider FoF 23.34 4.59 0.01 (30) 1.02 2.07 -0.03 (31) 0.29 ( 4) -0.32 (41) 0.00 3.30 ( 2) 1.82
Oasis Balanced Stable FoF 22.69 7.20 0.01 (31) 1.72 3.58 -0.06 (33) 0.03 (20) -0.09 (28) 0.41 0.33 (20) 1.95
MitonOptimal IP Diversified Income FoF 22.66 1.68 -0.02 (35) 0.26 3.27 -0.02 (30) -0.02 (23) 0.00 (20) 0.96 -0.40 (24) 1.19

17. A 36-month Risk-Return plot of the Prudential L,M,H categories
MULTI-MANAGERS
(October-2008 Risk September-2011)
Average to
40
Southern Charter Growth FoF
1
35 Southern Charter Balanced FoF
Southern Charter Defensive FoF 3 2
6 5 4
7 8
30 11 10 9 12 13
14
16 15 21 17 24 22 23 18 19
20
Average Return 25 27 28 26
33 30
36 34 32 31 29 35
41 39 37 40 38 42 43
44 45
25 49 4648
51 50
47
52 54 53
55 56
Return
57 60 59 58
61
63 62 64
65 67 66
68 69
20 70
71 72
73
74
15
75
76
77
10
5
0 2 4 6 8 10 12 14
Risk
Source Cadiz

18. Winner of the Growling Bear Award* for
the top performing funds in the worst
market ever!
{*If there was such an award Southern Charter would win it hands down! For the following
categories}
Top Performing funds - In prudential high, medium, low
and variable categories over 3yrs ending Sep 2011
Top performing - risk profiled prudential funds
Top performing - asset allocation prudential funds
Top performing - lifecycle retirement prudential funds
Top performing - Multi-manager on a risk adjusted basis
Top performing - Multi-manager, white label multi-manager

19. Our Well Diversified
Asset Allocation Investment
Stategy
Delivers More Certainty
in an Uncertain World
Mark Thompson
Southern Charter.Com

20. Our Target Market
Ideally suited for investors who do not
wish,
nor have the inclination, to manage
their own asset allocation and
fund manager selection
on an ongoing basis.

21. Thank You!