The Green Economy

Structural change delivers winners and losers

Valuations are elevated

Source: Thomson Reuters

When the tide goes out

OUTLOOK

• Global investing offers

diversification and return

potential but is not without risk

• Selective investment driven by

valuation

INVESTMENT STRATEGY

• Global economic growth steady

• Markets are expensive relative

to history

• Cautious on valuations near

term, selective in exposure

• Volatility on geopolitics,

commodity prices and central

bank normalisation

• Rand is not a one way bet and

could detract when strong

SOUTH AFRICA

A country at a cross roads

Balancing the books is getting more difficult

Source: SARB, Treasury, Stats SA, NGI

Increasing debt levels in the absence of growth

Source: SARB, Treasury, Stats SA, NGI

South Africa’s growth decline

Source: Stats SA, IMF World Economic Outlook, NGI

Source: Stats SA, IMF World Economic Outlook, NGI

The real economy

2016 GDP growth: 0.3%

Population growth: 1.6%

57M28% Unemployment

32% Youth Unemployment (Age 15-24)

Second to last country

in education

performance relative to

countries with similar

spending55%

live under R38 a day

= 30.4 million people

25%live under R17 a day

= 13.8 million people

South Africa’s confidence deficit: Business Investment

Source: Stats SA, BER, Bloomberg, NGI

South Africa’s confidence deficit: Consumer Expenditure

Source: Stats SA, BER, Bloomberg, NGI

Equity markets (excl. Naspers) have been negative

Source: Bloomberg, Thomson Reuters

Source: Bloomberg, Thomson Reuters, Standard Bank, Credit Suisse Global investment Returns Yearbook 2017, NGI, Real

returns

Lower Real Returns

A country at a cross roads

• Support from global

growth and carry trade near term

• SA Inc - uncertain operating

environment with pressure on the

consumer

• Scope for monetary easing

• Room for fiscal policy stimulus limited

• December will be key in determining

policy direction for the next 10 years

• The risks are high, and the next two

years will be volatile

• Starting from low base and a return of

confidence could provide a

springboard for demand, investment

and growth

OUTLOOK

• Focus on valuations and diversified,

balanced investment portfolios

INVESTMENT STRATEGY

Our portfolios are balanced and well diversified

Positioned to capture returns, while protecting against risks at the same time

Through-the-cycle approach: long term investing with risk awareness

Positioning: Asset Allocation

Asset Class Positioning

Equities Underweight

Equities plus Equity-Linked Notes Neutral

Bonds Neutral

Property Neutral

Preference Shares Overweight

Cash Neutral

Track record

Nedgroup Investments Private Wealth Balanced Fund of Funds

3 Year

(Annual)

5 Year

(Annual)

10 Year

(Annual)

Since

inception

(Annual)

% Return 6.5 11.1 10.1 14.6

% Real return

(return after inflation)0.9 5.5 3.9 8.8

Versus Peers 9/63 6/44 1/33 1/9

Source: NGI, Performance as at 30 June 2017. Net of fees, 3, 5 7 and 10 years annualised. Inflation figures used are one month in arrears. ASISA categories used for ranking.

THANK YOU

DISCLAIMERS• Nedbank Private Wealth offers Stockbroking under Nedgroup Private Wealth Stockbrokers (Pty) Ltd,

Investments under Nedgroup Private Wealth (Pty) Ltd and Banking under Nedbank Limited.

• Authorised financial services provider.

• Registered credit provider NCRCP16/NCRCP59.

• We subscribe to the Code of Banking Practice of The Banking Association South Africa and, for

unresolved disputes, support resolution through the Ombudsman for Banking Services.

• A member of the Nedbank and Old Mutual Groups.

• Nedgroup Private Wealth Stockbrokers (Pty) Ltd (Reg no 1996/015589/07), a member of the JSE

equity, equity derivatives, currency derivatives, interest rate derivatives and commodity derivatives

markets and a juristic representative of Nedgroup Private Wealth (Pty) Limited and registered credit

provider in terms of the national credit act (NCR reg no NCRCP59).

• There is risk inherent in investing in any financial product or fund. Nedbank Private Wealth does not

guarantee the repayment of capital and/or the performance of any investment proposed in this

presentation. All calculations, projections or monetary values, together with all rates quoted, are

guidelines or estimations and are included for illustrative purposes only. While every care and effort has

been taken to ensure the accuracy of information provided in this presentation, Nedbank Private Wealth

accepts no liability whatsoever for any loss, whether direct, indirect or consequential, arising from any

reliance on the information made available in this presentation or arising from any action taken or

transactions concluded as a result thereof.

• Nedgroup Collective Investments (RF) Proprietary Limited is the company that is authorised in terms of

the Collective Investment Schemes Control Act to administer the Nedgroup Investments unit trust

portfolios. It is a member of the Association of Savings and Investment South Africa (ASISA).

• Unit trusts are generally medium to long term investments. The value of your investment may go down

as well as up. Past performance is not necessarily a guide to future performance. Nedgroup

Investments does not guarantee the performance of your investment and even if forecasts about the

expected future performance are included you will carry the investment and market risk, which includes

the possibility of losing capital. Unit trusts are traded at ruling prices and can engage in borrowing and

scrip lending. Certain unit trust funds may be subject to currency fluctuations due to its international

exposure. Nedgroup Investments has the right to close unit trust funds to new investors in order to

manage it more efficiently. A schedule of fees and charges and maximum commissions is available on

request from Nedgroup Investments.

• A fund of funds (FOF) may only invest in other unit trust funds, that levy their own charges, which could

result in a higher fee structure.

• The annualized return is the average return earned by an investment each year over a given time

period. An annualized total return provides only a snapshot of an investment's performance and does

not give investors any indication of its volatility. Annualized total return merely provides a geometric

average, rather than an arithmetic average.

• Performance is calculated for the portfolio and individual investment performance may differ as a result

of initial fees, the actual investment, the actual investment date, the date of reinvestment and dividend

withholding tax.