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1

Annual General Meeting

14 February 2014

Agenda

1. Fund Options

2. Market Overview

3. Performance Summary

4. Fund changes

5. Outlook

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Fund Options

Fund Options

Protection

Moderate

Growth

Pensioner

Moderate

Pensioner

Protection

STeFI

CPI

CPI +3%

CPI +4%

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Market Values – June 2013 vs January 2014

Protection

Moderate

Growth

Pensioner

Moderate

Pensioner

Protection

220,158,253

578,317,556

439,431,871

12,478,795,318

14,431,324,302

517,219,925

587,025,736

174,188,933

Market Overview

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What we said last year ...

Moderate

Equity

Pensioner

Property

Bonds

Cash

Low

HighRisk

High

Re

turn

ab

ove

in

fla

tio

n

Cash and Bonds may give returns below inflation, especially during periods of Financial Repression

This played out in 2013 ... Bonds and Cash struggled to

keep pace with inflation

Equity

Pensioner

Property

Bonds

Cash

Inflation

One of the main reasons why the Growth Portfolio outperformed Protection and Pensioner Portfolios

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Why did Local Bonds perform poorly?

Pensioner Taper talk

Not

yet

Yes

Source: Inet-Bridge

Local bonds were largely affected by global sentiment i.e. rise in US yields and foreign outflows

SA 10 Year Bond yields followed the US 10 Year yields...

Pensioner

Source: Inet-Bridge

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Offshore asset classes over 2013 ...

Rand weakened by 23.5% over 2013, which boosted Offshore Equities and Offshore Bonds

Performance

Summary

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Portfolio Information

Fund Information: Growth Portfolio

Inception July 2002Size (June 2012) R 10 248.308Size (June 2013) R 12 454.507Size (Dec 2013) R 14 477.899Target CPI + 4%

Fund Information: Protection Portfolio

Inception September 2007Size (June 2012) R 291.844Size (June 2013) R 220.158Size (Dec 2013) R 174.313Target STeFI

Fund Information: Pensioner Portfolio

Inception March 2011Size (June 2012) R 546.505Size (June 2013) R 578.562Size (Dec 2013) R 598.107Target Match liabilities

Fund Information: Moderate Portfolio

Inception July 2011Size (June 2012) R 423.065Size (June 2013) R 439.432Size (Dec 2013) R 515.558Target CPI + 3%

Fund Options as % of Fund

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Performance Summary

Financial Year

Period Growth Moderate Pensioner Protection

2010 16.3% - - 7.3%

2011 15.6% - - 6.6%

2012 11.1% 9.3% 11.2% 7.4%

2013 18.3% 11.4% 10.3% 6.90%

FYTD Dec 2012 11.70% 6.0% 9.8% 3.7%

FYTD Dec 2013 14.05% 7.4% 5.9% 3.0%

Performance Summary: Risk Profiled Solutions

Financial Year

Period

Growth

vs.

CPI+4%

Moderate

vs.

CPI+3%

Pensioner

vs.

CPI

Protection

vs.

STeFI

2010 7.5% -0.3% - -

2011 6.9% 0.4% - -

2012 1.2% 1.7% 5.6% 0.8%

2013 8.5% 1.7% 4.7% 2.7%

FYTD Dec 2012 7.1% 1.9% 7.1% 1.1%

FYTD Dec 2013 9.6% 0.4% 3.5% 3.5%

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Growth Portfolio

Growth Portfolio: Active & Cumulative Performance

December 2013

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Growth Portfolio: Money Market December 2013

Local Flexible Fixed Income Mandates

% Allocation Month To Date 12 Months 36 Months

STeFI 0.4% 5.2% 5.5%

SIM 9.4% 0.5% 6.0% 6.4%

Verso Enhanced Cash 1.7% 0.7% - -

Growth Portfolio: Flexible Fixed Income December 2013

Local Flexible Fixed Income Mandates

% Allocation Month To Date 12 Months 36 Months

Local FFI Composite 17.8% 1.3% 5.2% 12.2%

Benchmark – CRF Flexible Fixed Income

- 0.9% 3.1% 9.8%

Coronation 9.2% 1.4% 7.5% 12.8%

Stanlib 8.6% 1.2% 2.8% 11.5%

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Growth Portfolio: Local Equity Mandates December 2013

Local Equity Mandates % Allocation Month To Date 12 Months 36 Months

Local Equity Composite 46.5% 3.2% 19.6% 13.5%

Benchmark - SWIX - 3.5% 20.7% 17.6%

Allan Gray 14.9% 2.4% 23.1% 16.7%

Investec Active Quants 5.9% 4.0% 25.5% 18.8%

Coronation Aggressive 9.5% 4.4% 29.7% 19.2%

SIM Unconstrained 7.4% 2.8% 17.2% 12.8%

Kagiso Managed 3.7% 3.1% 24.3%

Growth Portfolio: Absolute Return December 2013

Local Flexible Fixed Income Mandates

% Allocation Month To Date 12 Months 36 Months

CPI + 6% 0.6% 11.6%

Coronation Global Absolute 5.0% 2.8% 19.5% -

Investec Absolute Opportunity 3.0% 1.6% - -

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Growth Portfolio: Offshore (USD) December 2013

Offshore Mandates % Allocation 12 Months 36 Months

Offshore Composite 20.9% 18.96% 8.5%

CRF Offshore SAA - 11.6% 6.8%

Aberdeen 4.7% 13.03% -

Dibanisa 3.5% 26.7% -

Orbis 5.1% 41.8% 14.3%

Investec Global Managed 5.5% 16.5% 9.7%

Edge Africa 2.2% - -

Growth Portfolio: Manager Allocation December 2013

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Growth Portfolio: Asset Allocation December 2013

Asset Allocation Breakdown

Asset Class Effective SA midpoint Difference Total

Local Equities 44.69% 52.00% -7.31%

Local Nominal Bonds 6.36% 7.50% -1.14%

Local Inflation Linked Bonds 4.92% 7.50% -2.58%

Local Cash 14.46% 5.00% 9.46%

Local Property 5.55% 8.00% -2.45%

Local Commodities 0.29% 0.00% 0.29% 76.28%

Foreign Equities 16.77% 11.50% 5.27%

Foreign Africa Equities 2.17% 0.00% 2.17%

Foreign Bonds 2.30% 7.50% -5.20%

Foreign Cash 0.94% 1.00% -0.06%

Foreign Alternatives 1.54% 0.00% 1.54% 23.72%

Moderate Portfolio

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Moderate Portfolio: Financial Year Performance

Financial Year

Period MP CPI + 3%

MP

vs.

CPI +3%

2012 9.3% 8.8% 0.5%

2013 11.4% 8.7% 2.7%

FYTD Dec 2012 6.0% 4.1% 1.9%

FYTD Dec 2013 7.4% 4.0% 3.5%

Protection Portfolio

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Protection Portfolio: Financial Year Performance

Financial Year

Period ProP STeFI

ProP

vs.

STeFI

2010 7.3% 7.5% -0.3%

2011 6.6% 6.2% 0.4%

2012 7.4% 5.7% 1.7%

2013 6.9% 5.3% 1.6%

FYTD Dec 2012 3.7% 2.7% 1.1%

FYTD Dec 2013 3.0% 2.6% 0.4%

Pensioner Portfolio

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Pensioner Portfolio: Financial Year Performance

Financial Year

Period PenP CPI

PenP

vs.

CPI

2012 11.2% 5.7% 5.6%

2013 10.3% 5.6% 4.7%

FYTD Dec 2012 9.8% 2.7% 7.1%

FYTD Dec 2013 5.9% 2.4% 3.5%

Pensioner Portfolio

Sound investment strategy – focus on liabilities and risk

100% CPI increases granted every year

Pensioner Portfolio has remained in surplus

Ad-hoc pensioner bonuses paid in 2012 and 2013

200% bonus in Nov 2007, 100% bonus in Dec 2008, 100% bonus in Nov 2009,

100% bonus in Feb 2011, 100% bonus in Dec 2012, 100% bonus in Dec 2013

Past bonuses do not imply future bonuses!

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Fund Changes

Growth Portfolio Changes: 1 July 2012 – 30 June 2013

Replaced Marathon with Aberdeen Asset Management and

Old Mutual Global Index Trackers

Appointed All Seasons Capital Management on 1 June 2013

to manage the CRF’s Africa Equity exposure

Terminated Marathon Asset Management in November 2012

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Did the Africa Allocation add value?

Yes, but still early days ... African investment is a long-term (> 10 year) investment

6 Month Risk-Return Plot ended Dec 2013

Outlook

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Outlook

Expect lower returns in future and more volatility

Market returns are finite and we have borrowed from the future

Tapering of US asset purchases and local interest rate

hikes are significant risks

A period of exceptional returns should make you more fearful

of future returns and not less

CRF foundations are strong and action has been taken to

address these risks e.g. flexible fixed interest mandates

CRF Growth Portfolio defensively positioned ...

Pensioner

� Underweight

� Overweight

Rise in interest rates is generally bad for equities and bonds but good for cash

Asset Allocation of Growth Portfolio ended January 2014

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Expect lower returns going forward ...

Pensioner

Source: CFM

Last 10 years

(ZAR)

10 year forecast

(ZAR)

Local equity 19.5% 7 – 10%

Global equity 12.5% 10 – 13%

Local property 22.8% 7 – 10%

Local bonds 9.0% 6 – 9%

Global bonds 8.9% 5 – 7%

Cash 7.8% 6 – 8%

Inflation 5.8% 6% +

Going forward – the trend of rising yields may continue...

Pensioner

Source: Inet-Bridge

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Going forward – local interest rates will increase ...

Pensioner

Source: Stanlib

Going forward – Rand may strengthen again...

Pensioner

Source: Inet-Bridge

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Thank You !!!