Francois van WykPortfolio Manager, PSG Wealth Stellenbosch Dorp Street2018 Investment outlook

SPEAKERS

Prof Dirk KotzéPolitical Analyst, UNISA Politic instability and what can we expect in 2018

Johan HugoHead of Portfolio Management, SatrixSatrix: Product range and new ETFs

Willem de VosPortfolio Manager, PSG Wealth Stellenbosch Dorp Street

PSG Wealth’s value proposition to clientsMorning Programme

PSG Wealth’s value proposition 9h00 – 9h15

SATRIX: Product range 9h15 – 9h30

Investment outlook 9h30 – 9h50

Comfort Break 9h50 – 10h00

Prof Dirk Kotzé 10h00 – 11h00

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Our value propositionPSG Wealth Stellenbosch Dorp Street

“A lot of people understand money. How many people

understand families?” - PICTET

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Ons waardeproposisiePSG Wealth Stellenbosch Dorpstraat

“Wanneer dit gaan oor familiegeld, familie

geld”

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A game of odds…… in war and in life

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Are you REALLY qualified to fly

this?

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Flying your financial fighter jet

JSE/FTSE All Share Index

Robo advice

“Political solution”

TRUMP

Pravin says…

Kim Jong Fiat Uno

Bitcoin

Endowment

Retirement annuity

RGS Geldsake

Capital gains tax

ZAR/US$ exchange rate

Ponzi schemes

ETFs

Section 7c

Risk vs Upside

Is my/our will still accurate?

Buy & Sell agreements

Hedge funds

Child moving overseas

PE ratio

Droogte

Warren Buffet

FAIS Act

Sharemax

Estate duty

Tax rate changes

Beneficiary

CFDs

Stockbroker

Property funds

“Actual inflation”

Brexit

Sanlam

Discovery

Investec

Allan GrayMoneyweb

Mediclinic

Probate

LISP

Volatiliteit

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What we offer at Dorp Street

Investment Advice

Financial Planning

Stockbroking and Online Trading

Asset Management

Short term Insurance

Fiduciary service

Portfolio Management

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Estimating the life of capital

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Financial PlanningAsset Allocation

Property23% Business

Assets6%

Share Investments

47%

Unit Trusts

0%

Retirement Funds14%

Vehicles3%

Other, Funiture,

Jewellery etc.7%

R 9980 000 , 75%

R 3327 320 , 25%

Local Offshore

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Financial PlanningEstate Planning

Notes:- Need to review will.

Joint Estate72%

Trust28%

Estate Duty Estimate:

Total Assets in joint estate 15 548 320R

Plus: Deemed Assets (i.e. life cover) 14 340 495R

Plus: Loans to Trust -R

Less: Retirement Funds 2 661 000R

Less: Trust Assets 3 750 000R

Dutiable Assets: 23 477 815R

Less: Master's fees & Admin costs 10 000R

Less: Executor's fees 434 340R

Less: Outstanding debt 1 780 000R

Less: Tax (CGT) 1 173 891R

Net Estate: 20 079 585R

Less: Abatement (sec 4A) 7 000 000R

Dutiable Estate: 13 079 585R

Estate Duty Payable @ 20% 2 615 917R

Estate Structure:

Joint Estate 10 018 320.00R

Trust 3 750 000.00R

Total Tax Payable at death: 4 224 147R

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Small decisions | Major effects

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Our Value PropositionHelping you to be a world class pilot

Ongoing Maintenance & Annual Review

Being Foxy

Having a relevant will, trusts vs companies, local vs offshore

Implementation

Asset class – Portfolio/Fund selection

Changing the maze into a flight plan – choices, risks, products, tax, liquidity, tax, currency, timing

Matching your assets to your life events

Understanding you

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Our proposition to you … a true family officeWhat does the research say?

Sources: JP Morgan Asset Management, “The Wealth Management Report”, Dec 2013; Strategic Wealth

Gives me access to a full ecosystem of credible solutions

Be interested in me, not just my money

Make me part of the decision making -

a partnership

One trusted adviser who is backed up by a

team of specialists A business that looks after all of my family’s

wealth needs

One simple picture of my finances

Add value for the fees I pay

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PSG Wealth Stellenbosch Dorp Street

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Independence

Fair fees

Continuity

Absolute confidentiality

A safe pair of hands

Peace of mind & a life enjoyed

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#wêreldklaskoffie

PSG Private Wealth Investment Seminar

Johann Hugo

2 November 2017

Our World

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Satrix capabilities

Indexing Factor investing Multi-asset International

We deliver low-costoptions for your chosenindex or return objective

Focus on minimising TE

Ensure investability and liquidity

Which factors can you take advantage of in the South

African market?

Our approach combines our philosophy, market insights and

quantitativeresearch

We create multi-asset solutions that offer diversified exposure to various local and international

asset classes

Our allocations are static

We employ the power of factor investing

Our international fundsprovide you with low-

cost exposure to various geographies across world

equity markets

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Fast Facts

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What is an ETF?

an investment fund tracking an index

listed on an exchange

trading daily during market hours like any share

priced around the NAV (net asset value) at all times

to replicate the performance of the index

at low cost

Satrix Product Overview – Global ETFs

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International equities JSE code Index tracked

Satrix MSCI World STXWDM MSCI World Developed Markets

Satrix MSCI Emerging Markets STXEMG MSCI Emerging Markets IMI

Satrix S&P 500 STX500 S&P 500®

Satrix Global ETFs replicate the specific index by investing in

BlackRock iShares Core series UCITS ETFs.

Satrix MSCI World ETF

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The MSCI World Index represents

large and mid-cap companies across

23 developed markets globally. The

index covers approximately 85% of the

free float-adjusted market

capitalisation in each country.

as at 27 October 2017

Source: MSCI

USA59.2%Japan

8.9%UK

6.5%

France3.9%

Germany3.6% Other

18.0%

Index Country Weights

Satrix Emerging Markets ETF

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The MSCI Emerging Markets

Investable Market Index (IMI)

represents large, mid and small

cap companies across 23

emerging market countries.

The index covers approximately

99% of the free float-adjusted

market capitalisation in each

country.

as at 27 October 2017

Source: MSCI

China29.7%

S. Korea15.3%Taiwan

11.8%

India8.6%

Other28.7%

Index Country Weights

Satrix S&P 500 ETF

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as at 27 October 2017

Source: S&P Dow Jones

IT 24.1%

Financials14.7%

Healthcare14.2%

Consumer Discretiona

ry 11.9%

Industrials10.1%

Index Sector Weights

The S&P® Index is widely

regarded as the best single gauge of

large-cap US equities. There is over

USD7,8 trillion benchmarked to the

index, with index assets comprising

approximately USD2,2 trillion of this

total. The index includes 500 leading

companies and captures

approximately 80% coverage of

available market capitalisation.

Consumer

Staples

7.9%

Energy, 5.8%

Utilities, 3.2%Real Estate, 2.9%

Materials, 2.9%Telecommunication

2.0%

Index Performance Data (in Rand)

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Net Total Return 1 Year (%) 3 Years (% p.a.) 5 Years (% p.a.)

MSCI World Index 16.22% 14.25% 22.48%

MSCI Emerging Markets IMI 28.44% 14.29% 14.75%

S&P 500® Index 16.65% 17,57% 26.05%

FTSE/JSE Top 40 Index (TR) 11.81% 6.86% 12.64%

Source: MSCI, S&P Dow Jones, Profile Data Index returns for periods longer than 1 year are annualised

to 30 September 2017

Comparative Data

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Product Index TrackedProduct

Type

Annual Total Expense

Ratios (TERs)

Satrix MSCI World MSCI World ETF 0,35%*

Satrix MSCI Emerging

Markets

MSCI Emerging Markets

Investable MarketETF 0,40%*

Satrix S&P 500 S&P 500 ETF 0,25%*

*targeted - the TERs for the new Satrix ETFs will be calculated after 1 year

Satrix capabilities

Indexing Factor investing Multi-asset International

We deliver low-cost

options for your chosen

index or return objective

Focus on minimising TE

Ensure investability and

liquidity

Which factors can you take

advantage of in the South

African market?

Our approach combines our

philosophy, market

insights and quantitative

research

We create multi-asset

solutions that offer diversified

exposure to various local and

international asset classes

Our allocations are static

We employ the power of

factor investing

Our international funds

provide you with low-

cost exposure to

various geographies

across world equity

markets

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Different factors relevant in SA market

Factor exposure Weight Role in portfolio

Price Momentum 25% Exposure to stocks with strong price trend

Earnings Momentum 25% Fundamental validation of price momentum signal

Value (Yield) 25%Strong income component

Quality 25% Defensive during periods of market stress

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Factor building blocks | Performance summary

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Dividend plusStable

dividendQuality Momentum

Equallyweighted

Size (Midcaps)

Size (Smallcaps)

SWIX

Q3 8.5% 2.6% 9.6% 10.8% 5.8% 3.8% 3.0% 7.0%

1yr 10.1% 7.6% 8.9% 11.9% 1.6% -2.8% -0.1% 7.0%

3yr 3.8% 10.5% 6.2% 10.7% 4.1% 7.1% 7.1% 7.4%

5yr 6.1% 13.1% 10.5% 17.8% 8.4% 10.4% 13.7% 12.8%

10yr 9.9% 13.2% 14.6% 14.0% 8.8% 11.5% 9.8% 10.6%

-5%

0%

5%

10%

15%

20%

Q3 1yr 3yr 5yr 10yr

Smartcore* | Performance summary

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-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

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Monthly excess returns Rolling 12m excess returns

Monthly and 12m rolling relative returns of Smartcore *Smartcore is a ‘best view’ equity

factor blend:

50% Momentum

25% Quality

25% Stable Dividend

• Recent performance vs. SWIX

has improved (2.8% over 12m)

• Struggle in Momentum factor in

2016 was offset by strong

performance of Stable Dividend

Satrix highlights

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Launch of International ETFs

Launch of Quality ETF? Best African Fintech company 2016 & 2017

Current AUM | R420m

Current AUM | R35m

Thank you

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03 | Investment Outlook

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S&P500Where to from here?

Iriss

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History of US Bear & Bull Markets since 1926Average Bull Market lasted 9 years with cumulative total return of 472%

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S&P500: Attribution Analysis of ReturnsSince March 2009, 8.6yr Bull Market gained 311% or 17.5%p.a.

Deutsche Bank

40%

30%

16%22%

27%

5% 8% 8%

20%

-43%

-3%

3%

2%

10%

17% 9%

-6%

7%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2009 2010 2011 2012 2013 2014 2015 2016 YTD

EPS growth Rating change Share price performance

Rating change: -12.7%Earnings growth 269.6%

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S&P500: Where to from here?Where to from here?

Iriss

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Buffet’s Summary of Market Drivers

TWO CRITICAL ECONOMIC VARIABLES

1. Interest Rates

2. Profitability

ONE PSYCHOLOGICAL FACTOR

1. Sentiment

Warren Buffet: Fortune 2001

RATIONAL

BEHAVIOURAL

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Current Investment Environment

• Fundamentals looking decidedly more positive than a year ago

• US economic leadership, Chinese economic soft landing & European and Japanese

economic stability and even some economic growth

• Banking sector has started to extend loans again after recapitalisation & compliance

with new regulations (TARP)

• Global economic growth reasonable (2017: 3.5%) and accelerating (2018: 3.6%)

• Interest rates still very accommodative despite rising trend

• Investor sentiment becoming perhaps too complacent?

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Business Cycle & Asset Class returnsUS economy now in full expansion & SA in weak recovery

Deutsche Bank

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Bear markets are triggered by …

• Oncoming recession (earnings growth)

• A policy mistake (interest rate hikes)

• Inflation shock (interest rate hikes)

• Investor exuberance/Speculative valuations

• Geopolitical shock

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Bitcoin A real currency or Tulip mania?

YouTube

• Please see the following URL for the video that was on this slide:

- https://www.youtube.com/watch?v=40OuVyVGdIM

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Bitcoin A currency or Tulip mania?

• It looks and trades more like Tulip balls

• It has no fundamental underlying value

• Cryptocurrency & Blockchain technology is useful

• The currency of a country is backed by the economy & foreign reserves of that country.

It’s your legal tender!

• Please don’t be fooled into this hype. If you do, you are on your own. PSG cannot trade

Bitcoins

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04 | Political instability – what to expect

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Political Instability

• Prof. Kotzé’s slides were in shorthand and limited to explaining what he was discussing.

• It would not make sense to anyone that is not well versed in what he was discussing at

the seminar.

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FAIS Affiliates of the PSG Konsult Group are authorised financial services providers.