Ora presentation nov_12_senate_group

15 November 2012

The Senate Group

The role of tax managed fundsin financial planning

1

We design tax managed income funds that perform reliably and increase after-tax returns for employed and retired individuals, companies and trusts.

2

WHERE COULD YOU USE OUR EXPERTISE?

Enhance financial planning for

high net worth individuals & trusts.

Offer solutions for companies.

3

WE WILL COVER

• Who we are and what we do

• The opportunity for you

• The challenge

• The solution

• Funds we offer

• The solution for you

• How to access our funds

4

WHO WE ARE

5

WHO WE ARE

• Independent, specialist fund manager

• Pioneers of tax managed funds in South Africa

• Only external manager of Sanlam funds

• Highly experienced and established management team

6

WHO WE AREOra/Sanlam has the largest market share

Fund Size (Rm)

Sanlam Alternative Income Fund 7 508

Old Mutual High Yield Opportunity Fund 2 150

Satrix DIVI Fund 1 641

Nedgroup Investments Optimal Income Fund 1 246

Allan Gray Optimal Fund 1 182

Personal Trust High Yield Growth Fund 907

Sanlam Dividend Income Fund of Funds 810

Grindrod Diversified Preference Share Fund 416

Sanlam Stable Growth Fund 403

Coronation Optimal Income Fund 356

Gryphon Dividend Income Fund 314

Sanlam Optimised Income Fund 309

BOE Preference Share Fund 240

Coronation Preference Share Fund 218

Total 17 701

Includes funds that are larger than R200m, as at September 2012, with more than 50% invested in tax efficient instruments (based on exposures from respective fund factsheets).

Sanlam, 51.02%

Old Mutual, 12.15%

NedgroupInvestments,

9.27%

Satrix, 7.04%

Allan Gray, 6.68%

Personal Trust, 5.12%

Coronation, 3.24%

Gryphon,2.35%

Grindrod, 1.77%

BOE,1.36%

7

WHO WE AREOur team

CaylinConradieMarketing &

CRM

Christelle OlivierPersonal Assistant

Ian DonovanDirector

Ian GroenewaldDirector &

CEO

Esther von MaltitzPortfolio Analyst

Eugene GoosenPortfolio Manager

IngheSchneiderSales & Marketing

Mark PrycePortfolio Manager

Ockert GoosenDirector & Portfolio Manager

Shirley Rademeyer

Sales & Marketing

Tienie van der Mescht

Non-Executive Director

Wayne LiebenbergDistribution Manager

WynandMaraisPortfolio

Administrator

8

THE OPPORTUNITY FOR YOU

9

THE OPPORTUNITY FOR YOUInternational trend

• Growing awareness that pre-tax analysis is not adequate.

• SEC (US equivalent of FSB) has required publication of pre-tax and

after-tax returns since 2001.

“We are concerned that the millions of mutual fund investors who are subject to current taxation may not fully appreciate the

impact of taxes on their fund investments…”

• The demand for tax managed funds is growing internationally.

Source of quote: http://www.sec.gov/rules/final/33-7941.htm

10

• Consider after-tax analysis

• Appropriate use of tax managed income funds

• Create unique income focused solutions for your:

• High net worth individuals,

• Trusts and

• Corporate clients

Treat Customers Fairly (TCF)

THE OPPORTUNITY FOR YOUBe ahead of the trend

11

THE OPPORTUNITY FOR YOUAppropriate use of tax managed funds

Focus Income Income & Growth Growth

Choice of investments

High Medium Low

Efficiency of tax managed funds

Tax rates Income Growth

Interest and Rental Dividends Capital Gains

Individuals 40% 15% 13.33%

Trusts 40% 15% 26.64%

Companies 28% 0% 18.66%

12

THE CHALLENGE

13

THE CHALLENGE

PROBLEM:

Combining pre-tax and after-tax

instruments or funds

doesn’t work.

14

THE ORA SOLUTIONS

15

THE SOLUTION

SOLUTION:

Don’t combine pre-tax and after-tax.

Offer separate income solutions for

Compulsory Savings

DiscretionarySavings

16

THE ORA SOLUTIONSWe offer unique tax managed income focused funds

RETURN

RISK

Pre-tax funds

(compulsory

savings)

After-tax

funds

(discretionary

savings)

After-tax

returns of

pre-tax funds

OUR BUILDING BLOCKS:

Conservative Cautious Moderate Aggressive

Gro

wth

Inco

me

&

Gro

wth

Sanlam StableGrowth Fund

Enhanced

C ash

Income

Property

Equity

Money

Market

v

v

1

2

3

4Sanlam Optimised

Income Fund

Sanlam Dividend Income Fund of Funds

Sanlam Alternative Income Fund

4

3

2

1

Inco

me

17

THE SOLUTION FOR YOU

18

THE SOLUTION FOR YOU

2% Volatility

Sanlam Optimised

Income Fund

35%

Coronation Optimal Income

Fund

33%

Sanlam Stable Growth Fund

30%

PSG Preferred Dividend Fund

2%

3% Volatility

Sanlam Optimised

Income Fund

43%


37%

Satrix Dividend Plus Portfolio

20%

5% Volatility


55%

Satrix Dividend Plus Portfolio

35%

Sanlam Optimised

Income Fund

10%

Notes: Fee classes used for solutions (excl. VAT)Sanlam Optimised Income Fund 0.40%Sanlam Stable Growth Fund 0.80%Coronation Optimal Income Fund 0.85%PSG Preferred Dividend Fund 0.85%

19

THE SOLUTION FOR YOUPerformance

20

FUNDS WE OFFER

21

FUNDS WE OFFER

• Funds with different risk and after-tax reward profiles.


Sanlam Optimised Income Fund



Conservative

Cautious

RISK

RETURN

22

FUNDS WE OFFER

Sanlam Alternative

Income Fund

Sanlam Dividend Income

Fund of Funds

Sanlam Optimised

Income Fund


Target client

Individuals who have used their interest exemption, companies and trusts who would like a higher after-tax return than money market funds.

Individuals who have used their interest exemption, companies and trusts who would like a higher after-tax return than enhanced cash funds.

Individuals who have used their interest exemption, companies and trusts who would like a higher after-tax return than listed pref or income funds.

Individuals who have used their interest exemption, companies and trusts who would like a higher after-tax return than absolute return funds.

Fund size: September 2012

R7 508m R810m R309m R403m

Target to outperform

Money market funds by 1% after tax.

SAIF by 1% over any 1 year period, after-tax basis.



Investment

mandate

Redeemable prefs: 85%-

90%SAIF: 75%

Redeemable prefs

(incl. corporate prefs):

40%

High dividend and high

liquidity listed shares: 80%

Money market funds:

10%-15%

Income andmoney market funds: 25%

Listed perpetual prefs:

40%Hedging: 60% -100%

Income and

money market funds: 20%

Cash and

money market funds: 20%

Risk profile Conservative Conservative Cautious Cautious

23

FUNDS WE OFFER

Sanlam Alternative

Income Fund

Sanlam Dividend Income

Fund of Funds

Sanlam Optimised

Income Fund


Unique features

Rated AA- (zaf) by Fitch

Ratings.

Stable unit price (no

CGT).

Available via Glacier.Liquid investments.Low TER and volatility.

Available via Glacier.Lower volatility than listed pref funds.

Liquid investments.

BenchmarkAfter-tax return of SIM

Money Market Fund

After-tax return of SIM Money Market Fund

After-tax return of STeFIComposite Index

After-tax return of STeFIComposite Index

Launch date May 2007 March 2009 October 2011 August 2012

Liquidity 24 hours 48 hours

48 hours30 days’ notice for repurchases greater than R5million

48 hours

Annual management

fee, excl. VAT0.85% 0.75% 1.15% 1.17%

Annual trailer fee

included,

excl. VAT

0.25% 0.25% 0.35% 0.35%

24

FUNDS WE OFFER

Sanlam Alternative Income Fund (SAIF)

25

FUNDS WE OFFERSanlam Alternative Income Fund (SAIF)

• SAIF has the lowest risk-return profile





Conservative

Cautious

RISK

RETURN

26

The objective of the fund is to offer a liquid, mainly dividend

yielding investment that will track the South African short-term

interest rate cycle.

FUNDS WE OFFER: SAIFFund objective

27

FUNDS WE OFFER: SAIFInvestment mandate

• No exposure to

• Non-cumulative or fixed rate preference shares

• Perpetual preference shares

• Swap transactions

• Structured redeemable preference shares

Redeemable prefs

85%-90%

Money market funds

10%-15%

SAIF

28

FUNDS WE OFFER: SAIFKey fund facts

• Stable unit price (no CGT)

• External rating of AA–(zaf) by Fitch Ratings

• Low capital risk (high quality, variable rate investments only)

• 24 Hour liquidity

• Returns

• Mainly in the form of dividends and some interest

• Will track short term interest rates

• Monthly income distributions

• Conservative risk profile

• Benchmark: after tax return of SIM Money Market Fund

29

FUNDS WE OFFER: SAIFInvested in highly rated SA financial services companies

Preference shares

Cash & money

market funds

Investment Portfolio 30 September 2012

Nedbank Limited 19.76%

Sanlam Limited 16.68%

FirstRand Limited 12.46%

Standard Bank of South Africa Limited 9.29%

Nedbank Group Limited 9.02%

ABSA Bank Limited 7.96%

Investec Bank Limited 7.96%

SIM Money Market Fund 11.34%

Standard Bank Corporate Money Market Fund 4.88%

Standard Bank Cash Account 0.46%

Investec Money Market Fund 0.21%

30

FUNDS WE OFFER: SAIFLiquidity profile

0% 5% 10% 15% 20% 25% 30%

> 12 months

91 days to 12 months

31 days to 90 days

48 hours to 30 days

< 48 hours

31

FUNDS WE OFFER: SAIFIndicative returns – 31 October 2012

Sanlam Alternative Income FundB1 (0.85% Annual Management Fee)

Effective 7 day rolling average

Net Fund Return 4.39%Interest 0.27%

Dividends 4.13%

Capital Gain n/a

COMPANY INDIVIDUAL

Tax 0.23% -0.42%

Income tax -0.07% -0.11%

DWT n/a -0.31%

CGT n/a n/a

Benefit of STC credit portion 0.31% n/a

Total After Tax Return 4.63% 3.98%

Pre Tax Equivalent Return 6.43% 6.63%

SIM Money Market Fund Return 5.03% 5.03%

Pre Tax Yield Pick-Up 1.40% 1.60%

32

FUNDS WE OFFER: SAIFPerformance – Individuals

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

SAIF After Tax

SIM MMF After

Tax(Benchmark)

SAIF compared to Benchmark

Effective 7 day rolling returns, net of fees.

33

FUNDS WE OFFER: SAIFPerformance – Companies

3.70%

4.20%

4.70%

5.20%

5.70%

6.20%

SAIF After Tax

SAIF After Tax &

STC

SIM MMF After

Tax (Benchmark)

SAIF compared to Benchmark

Effective 7 day rolling returns, net of fees.

34

FUNDS WE OFFER

Sanlam Dividend Income Fund of Funds (SDIFoF)

35

FUNDS WE OFFERSanlam Dividend Income Fund of Funds (SDIFoF)





Conservative

Cautious

RISK

RETURN

36

The objective of the fund is to offer a low risk, liquid,

mainly dividend yielding investment that will substantially track the South

Africanshort-term interest rate cycle.

FUNDS WE OFFER: SDIFoFFund objective

37

FUNDS WE OFFER: SDIFoFInvestment mandate

• No exposure to equity funds

SAIF

75%

Income and moneymarket funds

25%

SDIFoF

38

FUNDS WE OFFER: SDIFoFKey fund facts

• Low volatility (only 25% income fund exposure)

• Highly liquid investments

• Low TER


• Returns

• Mainly in the form of dividends with some capital gains and interest

• Will track short term interest rates


• Target to outperform SAIF by 1% over any 1 year period

• Conservative risk profile

• Benchmark: after tax return of SIM Money Market Fund

• Available via Glacier

39

FUNDS WE OFFER: SDIFoFInvestment portfolio


Sanlam Alternative Income Fund 73.81%



Coronation Strategic Income Fund 4.45%

Coronation Money Market 3.72%

SIM Active Income Fund 1.23%

Stanlib Income Fund 1.16%

Cash 0.02%

40

FUNDS WE OFFER: SDIFoFLiquidity profile

48 hour liquidity

41

FUNDS WE OFFER: SDIFoFIndicative returns – 31 October 2012


A3 (0.75% Annual Management Fee)

Effective 3 month rolling average


Dividends 2.92%

Capital Gain 1.32%

COMPANY INDIVIDUAL

Tax -0.13% -0.54%

Income tax -0.11% -0.16%

DWT n/a -0.21%

CGT -0.25% -0.18%




SIM Money Market Fund Return 5.21% 5.21%


42

FUNDS WE OFFER: SDIFOFPerformance – Individuals

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

SDIFoF After-Tax

SIM MMF After-Tax

(Benchmark)

SDIFoF compared Benchmark

Effective 3 month rolling returns, net of fees.

43

FUNDS WE OFFER

Sanlam Optimised Income Fund (SOIF)

44

FUNDS WE OFFER:Sanlam Optimised Income Fund (SOIF)





Conservative

Cautious

RISK

RETURN

45

The objective of the fund is to offer an optimised total return by

focusing on maximising after tax income and capital returns,

while actively managing downside risk.

FUNDS WE OFFER: SOIFFund objective

46

FUNDS WE OFFER: SOIFInvestment mandate

Redeemable prefs (incl. corporate)

40%

Perpetual prefs

40%

Income and moneymarket funds

20%

SOIF

47

FUNDS WE OFFER: SOIFKey fund facts

• Lower volatility than listed pref funds


• Investments >R5m (30 days’ notice)

• No exit fee

• Returns

• Mainly in the form of dividends and some capital gains and interest

• Will track medium term interest rates


• Target to outperform SAIF by 2% over any 1 year period

• Cautious risk profile

• Benchmark: 60% of STeFI Composite Index

• Available via Glacier

48

FUNDS WE OFFER: SOIFInvestment portfolio

Redeemable preference shares

Income funds, money market funds & cash

Listed preference shares

* Redeemable preference share covered by listed shares.


Steinhoff International Holdings Ltd* 8.71%

Nampak Ltd* 8.16%

Ned Investment Trust 6.49%

23.36%

Standard Bank Group Ltd 9.53%

First Rand Ltd 9.66%

ABSA Bank Ltd 4.94%

Nedbank Ltd 5.71%

Investec Ltd 3.55%

PSG Group Ltd 1.62%

35.02%

Cash 2.69%

Stanlib Income Fund 0.66%

Coronation Strategic Income Fund 5.59%

Coronation Money Market Fund 5.34%


SIM Active Income Fund 0.60%

Sanlam Alternative Income fund 2.63%


41.62%

49

FUNDS WE OFFER: SOIFLiquidity profile

0% 10% 20% 30% 40% 50%

> 12 months

91 days to 12 months

31 days to 90 days

48 hours to 30 days

< 48 hours

50

FUNDS WE OFFER: SOIFIndicative returns – 31 October 2012


B1 (1.15% Annual Management Fee)

1 Year returns


Dividends 4.59%

Capital Gain 1.43%

COMPANY INDIVIDUAL

Tax 0.02% -0.64%

Income tax -0.11% -0.16%

DWT n/a -0.29%

CGT -0.27% -0.19%




STeFI Composite Index 5.62% 5.62%


51

FUNDS WE OFFER: SOIFPerformance

52

FUNDS WE OFFER: SOIFPerformance

95

97

99

101

103

105

107

Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12

Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12

Cumulative weighted Bank Index 100 100.20 96.13 101.86 104.78 105.18 101.49 100.10 101.94 104.72

Cumulative Opti NRPS 100 98.78 95.50 99.38 103.79 104.05 101.20 100.06 102.06 104.45

Cumulative OptiFund (ModDietz) 100 100.43 99.52 101.17 103.19 103.57 102.81 102.71 103.74 104.94

Cumulative Total Returns

53

FUNDS WE OFFER: SOIFMonthly returns

54

FUNDS WE OFFER

Sanlam Stable Growth Fund (SSGF)

55

FUNDS WE OFFER:Sanlam Stable Growth Fund (SSGF)





Conservative

Cautious

RISK

RETURN

56

The objective of the fund is to create long term stable growth.

FUNDS WE OFFER: SSGFFund objective

57

FUNDS WE OFFER: SSGFInvestment mandate

Hedged equity 80%

Cash and money

market funds

20%

SSGF

• Share selection criteria

• Universe: Top 701. High dividend yields2. High liquidity

• Hedging

• Share in positive movement• Protect against negative market movement• Net equity exposure: 0%-30%

58

FUNDS WE OFFER: SSGFKey fund facts

• Share selection with input from Sanlam Investment Management

• Hedging done by specialists (Sanlam Structured Solutions)

• Highly liquid investments


• Returns

• Mainly in the form of capital gains and dividends with some interest

• Driven by a combination of medium term interest rates and the

performance of high dividend yielding shares

• Bi-annual income distributions

• Target to outperform SAIF after-tax by 3% over any 1 year period

• Cautious risk profile

• Benchmark: 60% of STeFI Composite Index

59

FUNDS WE OFFER: SSGFInvestment portfolio

Cash and money market

funds

Hedged equity



Cash 4.43%

Other Equity 34.30%

SAB Miller PLC 6.32%

MTN Group Ltd 5.83%

Naspers Ltd 5.54%

Compagnie Financiare Richemont SA 5.22%

Kumba Iron Ore Ltd 4.77%

British Amercian Tobacco PLC 4.73%

Sanlam Ltd 4.67%

Woolworths Holdings Ltd 4.65%

The Bidvest Group Ltd 4.61%

60

FUNDS WE OFFER: SSGFLiquidity profile

48 hour liquidity

61

FUNDS WE OFFER: SSGFPerformance

Note: SSGF returns are based on back testing and do not represent actual returns.

62

HOW TO ACCESS OUR FUNDS

63

HOW TO ACCESS OUR FUNDS

Sanlam

SAIF

SDIFoF

SOIF

SSGF

Glacier

SDIFoF

SOIF

64

CONTACT

Fund queriesWayne Liebenberg021 941 [email protected]

Client queriesCaylin Conradie021 941 [email protected]

Transactions and statementsHigh Net Worth Department086 010 [email protected]

LISP InvestmentsGlacier Contact Centre021 917 [email protected] speak to your consultant.

65

FOLLOW US

66

DISCLAIMER

The information contained in this document (together with any opinions expressed or further

information provided in connection with this document) is of a general nature and provided

for illustrative purposes. It does not address the circumstances of any particular person or

entity and it is not a recommendation or advice in relation to any transaction or investment.

In making this information available, we are not purporting to act in any way as an advisor or

in a fiduciary capacity. No one should rely on any of this information without appropriate

advice from an independent financial adviser, based on a thorough investigation of the

investor’s specific circumstances.

While we have taken care to ensure that the information is accurate and not misleading, Ora

Fund Managers (Pty) Ltd (Ora) makes no representations or warranties of any kind with

respect to its accuracy, completeness or correctness. The information is provided on the clear

understanding that Ora will not be held liable or responsible for any loss or damages that may

be suffered by any person or entity as a result of that party placing reliance on or failing to

act on any of the information provided.

67

The information in this document is proprietary to Ora and is not to be reproduced,

distributed, published or used for any purpose other than the evaluation of any proposal contained

in the document, except with the prior written permission of a director of Ora.

Ora is an authorised financial services provider.

Ora has entered into a co-asset management mandate with Sanlam Collective Investments Limited (SCI) and during the preceding 12 month period, Ora earned more than 30% of its total remuneration from SCI in respect of this mandate.

The authorised representatives of Ora for purposes of this presentation are:• Wayne Liebenberg

• Ian Groenewald• Shirley Rademeyer

Directors: OJ Goosen, I Groenewald, IA Donovan, A du Preez, GC Swanepoel (alt)Address: 3rd Floor, Mettle Building, Willie van Schoor Avenue, Bellville, 7530

FSP Number: 42968

More information about Ora Fund Managers (Pty) Ltd may be found at www.orafunds.co.za

NOTICE

68

NOTES TO INDICATIVE RETURNS

• Notes

• Net Fund Returns are net of fees and gross of tax.

• SOIF dividends includes dividends already declared and dividends to be declared. Assumption made that dividends to be declared will be grossed up.

• Capital gains tax is only for illustrative purposes and is calculated on the assumption that the investor invested funds at the exact same time and

date as the period stated above.

• Capital Gains Tax will differ for each investor.

• Assuming an individual tax rate of 40%, a corporate tax rate of 28% and a dividends tax rate of 15%.

• The returns for Company investments assume that Sanlam Collective Investments received a dividend tax exemption form.

• After 1 April 2012, dividends are received in the form of either dividends with STC credits (not subject to DWT) or a grossed up dividend subject to

DWT. Therefore, a STC benefit is calculated on dividends with STC Credits received, as the DWT exemption benefit is passed on to shareholders.

• The value of the units can go down or up. Past returns are in no way an indication of future returns.

• The quoted annual management fees are exclusive of VAT.

• These unit trusts are co-managed by Ora Fund Managers (Pty) Ltd.

• The returns were obtained from Sanlam Collective Investments.

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End

Ora presentation nov_12_senate_group

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