Coronation FlagshipIncome and Growth

Solution

The Coronation Balanced Defensive Fund

Charles de Kock04 September 2010

Agenda

A very brief view of the macro economy and financial markets

Coronation Balanced Defensive Fund

Slow take-off for global economy

Currency turmoil

Weak global economic recovery

Particularly slow jobs growth in US

Has led to yet more stimulus in US and a weaker dollar

Chinese RMB pegged to US dollar therefore does not strengthen

Emerging currencies including the rand firms

Talk of currency wars and protectionism abound

Gold and other commodities rise

Stock markets too as zero interest rate regime looks likely to remain for longer

bond yields fall sharply as talk of exit strategies evaporate

Implications of zero interest rates

As money flows from developed (zero interest rate world)

Emerging currencies appreciate

Asset prices rise

Inflation and interest rates stay low

Great environment for consumers

Credit expansion will follow

Current accounts will deteriorate

When global interest rates normalize the whole process will reverse

US Bonds vs Equities past 100 yearsbonds have won only 3 times over a 10 year cycle

10 Year rolling total return – S&P 500 vs. 10 Year US Treasuries10 Year rolling total return – S&P 500 vs. 10 Year US Treasuries

Source: J.P. Morgan and Shiller. S&P 500 total return includes dividend and the return for US Treasuries assumes bonds will be held until maturity. Note: Past performance is not indicative of future results

SA economy

South Africa: macro environment

Global environment has led to huge portfolio inflows chasing higher yields

Rand has been very strong as a result…..hurting manufacturing competitiveness

Inflation lower than anticipated leading to more rate cuts by SARB

Lots of talk of measures to weaken the rand…..but success not assured

Huge divergence on JSE

Source: I-Net Bridge

General retailersSignificant outperformance over 3 years

Favourable economic tailwinds

Rand appreciation

Big interest rate cuts

World-class management

Focused on value creation

Extremely shareholder friendly (buybacks, big dividends)

Foreigners aggressive buyers of domestic retailers

MSM = 72%, TRU = 62% foreign held

Wal-Mart offer for MSM implies 19.5x PE multiple

3-year compound annual total return: General retailers vs. All Share

JALSH

CLS

TFG

MSM

MPC

PIK

SHP

SPP

TRU

WHL

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

JALSHCLSTFGMSMMPCPIKSHPSPPTRUWHL

The Coronation Balanced Defensive Fund

Risk (Annualised Standard Deviation)

Avg 15%Max 25%

(0% normal shares)Reg 28

Avg 50%Max 60%Reg 28

Avg 70%Max 85%Reg 28

100%

Exposure to Growth Assets

Avg 35%Max 40%Reg 28

Long-term Growth(Equity Only)

Investment Objective

Long-term Growth(Multi-asset)

CoroBalanced

Defensive

CoroTop 20

3 Years →

Income & Growth(Multi-asset)

Income(Multi-asset)

CoroStrategic Income

CoroCapital Plus

CoroBalanced

Plus

Conservative Moderate Aggressive

Risk Profile

Ave

rag

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po

sure

to

gro

wth

ass

ets

thro

ug

h t

he

cycl

e (5

yea

rs)

Th

e ex

po

sure

will

flu

ctu

ate

as v

alu

atio

ns

chan

ge

Growth Assets are defined as local and foreign equities, properties and commodities.

• Aim to outperform Cash+3% over the medium term

• Protect Capital over any 12 month period

Coronation Balanced Defensive FundCautious investors requiring stable returns

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strategic Income Balanced Defensive

Capital Plus Balanced Plus Top 20

SA Cash

Int Fixed Income/Cash

SA Fixed Income/Bonds

SA Pref Shares/Other

SA Real Estate

Int Equity

SA Equity

Growth Assets are defined as local/foreign equities (excl. pref shares) and real estate.

Max exposure to growth assets

Coronation Balanced DefensiveMax 40% exposure to growth assets

25%

40%

60%

85%

100%

Coronation Balanced DefensiveThe strategy has delivered...

Performance quoted from Morningstar as at 30 September 2010 for a lump sum investment with income distributions reinvested

R140 317

R126 908

R 100.000

R 105.000

R 110.000

R 115.000

R 120.000

R 125.000

R 130.000

R 135.000

R 140.000

R 145.000

Feb-

07

Mar-

07

Apr-

07

May-

07

Jun-

07

Jul-07

Aug-

07

Sep-

07

Oct

-07

Nov-

07

Dec-

07

Jan-

08

Feb-

08

Mar-

08

Apr-

08

May-

08

Jun-

08

Jul-08

Aug-

08

Sep-

08

Oct

-08

Nov-

08

Dec-

08

Jan-

09

Feb-

09

Mar-

09

Apr-

09

May-

09

Jun-

09

Jul-09

Aug-

09

Sep-

09

Oct

-09

Nov-

09

Dec-

09

Jan-

10

Feb-

10

Mar-

10

Apr-

10

May-

10

Jun-

10

Jul-10

Aug-

10

Sep-

10

Value of a R100,000 investment on 1 February 2007

Coro Balanced Defensive

Mean Prudential Low Equity

Coronation Balanced Defensive Capital protection is key...

Balanced Defensive has not suffered capital losses over

any 12 month period

Performance quoted from Morningstar as at 30 September 2010 for a lump sum investment with income distributions reinvested

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

Fe

b-0

8

Mar-

08

Ap

r-0

8

May-

08

Jun-0

8

Jul-0

8

Au

g-0

8

Se

p-0

8

Oct-

08

No

v-0

8

De

c-0

8

Jan-0

9

Fe

b-0

9

Mar-

09

Ap

r-0

9

May-

09

Jun-0

9

Jul-0

9

Au

g-0

9

Se

p-0

9

Oct-

09

No

v-0

9

De

c-0

9

Jan-1

0

Fe

b-1

0

Mar-

10

Ap

r-1

0

May-

10

Jun-1

0

Jul-1

0

Au

g-1

0

Se

p-1

0

Rolling 12 Month Returns & Standard Deviation

Coro Balanced Defensive Mean Prud Low Eq Coro Ann Std Dev Mean Ann Std Dev

Since Inception – 01 February 2007

3 months 6 months YTD 1 year 2 years 3 years

Ranking 12/53 2/53 3/52 5/52 3/48 1/40

Quartile 1st 1st 1st 1st 1st 1st

Returns 6.2% 6.5% 9.8% 13.1% 12.1% 10.1%

Cat AVG 4.7% 3.8% 6.7% 9.6% 9.2% 6.1%

Performance quoted from Morningstar as at 30 September 2010 for a lump sum investment with income distributions reinvested

Coronation Balanced Defensive Consistent 1st quartile performance...

Our objective is to deliver top quartile returns over all meaningful performance periods, for this fund being a 3 year period

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar

07

Jun

07

Sep

07

Dec

07

Mar

08

Jun

08

Sep

08

Dec

08

Mar

09

Jun

09

Sep

09

Dec

09

Mar

10

June

10

Sep

10

SA Cash

Int Fixed Income/ Cash

SA I L Bonds

SA Corp Bonds

SA Gov Bonds

SA Pref Shares/ Other

SA Real Estate

Int Equities

SA Equity

Coronation Balanced Defensive FundAsset allocation history since inception...

40% max exposure to growth assets

Growth Assets are defined as local and foreign equities and real estate

Coronation Balanced Defensive Portfolio positioning – 30 September 2010

Reg. 28 Compliant

0.2

2.8

4.4

17.9

19.4

23.4

SA Gov Bonds

SA Pref Shares

Int Cash/FI

SA IL Bonds

SA Cash

SA Corp Bonds

3.8

12.2

16.1

SA Real Estate

Int Equity

SA Equity

Growth Assets are defined as local and foreign equities and real estate

Income Assets 67.8%

Growth Assets 32.1%

Coronation Balanced Defensive Portfolio positioning – 30 September 2010

Growth Assets

Growth Assets are defined as local and foreign equities and real estate

3.8

12.2

16.1

SA Real Estate

Int Equity

SA Equity

SA EQUITY TOP 10 HOLDING DIVIDENDMTN 1.8% 3.3%STANDARD BANK 1.4% 4.4%NASPERS 1.1% 1.0%SASOL 1.1% 3.1%CORONATION 1.0% 6.8%ANGLO AMERICAN 0.9% 2.7%BHP BILLITON 0.9% 2.9%FIRSTRAND 0.6% 4.5%RICHEMONT 0.6% 1.4%SABMILLER 0.6% 2.6%OFFSHORE EQUITY HOLDINGCORO GEM FUND 3.7%CORO GLOBAL OPP EQUITY FOF 6.4%SA REAL ESTATE HOLDING YIELDACUCAP 0.9% 8.0%CAPITAL SHOPPING CENTRE 0.7% 3.9%REDEFINE 0.5% 8.8%FORTRESS 0.5% 8.9%SA CORPORATE 0.4% 9.8%

Coronation Balanced Defensive Portfolio positioning – 30 September 2010

Income Assets

0.2

2.8

4.4

17.9

19.4

23.4

SA Gov Bonds

SA Pref Shares

Int Cash/FI

SA IL Bonds

SA Cash

SA Corp Bonds

SA PREFERENCE SHARES HOLDING YIELDABSA 1.1% 7.0%INVESTEC 0.5% 3.4%FIRSTRAND 0.2% 6.7%PSG 0.1% 7.9%NETCARE 0.1% 7.7%SA I L BONDS HOLDING YIELDABSA (ABCPI3) 2.8% 3.5%FIRSTRAND (FRBI28) 2.2% 3.4%FIRSTRAND (FRBI23) 2.1% 3.4%STANDARD BANK (SBSI11) 2.1% 3.4%NEDBANK (NBKI1) 1.5% 3.3%SA CORP BONDS HOLDING YIELDSTANDARD BANK (SBS9) 2.2% 8.6%NEDBANK (NBK2A) 2.2% 8.5%ANGLO AMERICAN (AAO3) 1.6% 8.8%FIRSTRAND (FRX15) 1.5% 8.5%ABSA (ABS5) 1.5% 8.7%

1. This fund has delivered on it’s mandate to provide investors with a stable income and to preserve capital in real terms

2. This is the top performing fund in the Prudential Low Equity category since the inception of the fund on 02 February 2007

3. Different to the average fund in the category, the fund has suffered no capital losses over any 12 month period

4. This fund will charge 0% fees if we deliver negative returns over any 12 month period

5. The fund is managed by Coronation’s most experienced portfolio managers, backed by the research of Coronation’s global investment team

Coronation Balanced Defensive FundOur value proposition

Questions?

Disclaimer

Coronation Asset Management is an Authorised Financial Service Provider.

The content of this presentation and any information provided may be of a general nature and may not be based on

any analysis of the investment objectives, financial situation or particular needs of the client. (as defined in the

Financial Advisory Intermediary Services Act) As a result, there may be limitations as to the appropriateness of any

information given. It is therefore recommended that the client first obtain the appropriate legal, tax, investment or

other professional advice and formulate an appropriate investment strategy that would suit the risk profile of the

client prior to acting upon such information and to consider whether any recommendation is appropriate considering

the client’s own objectives and particular needs.

Any opinions, statements and any information made, whether written, oral or implied are expressed in good faith.

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