INVEST IMPACT GROW

The importance of a diversified toolkit in growing your retirement savings

Omri Thomas | Abax Investments

7 February 2020

• Founded in 2003

• Focused on delivering outstanding investment

performance for clients

• Investment led and wholesale-only

• Majority owned by staff

• Team of 17 investment professionals with 15 years

average experience

Our businessManager profile

3

Multi-asset and fixed income Portfolio managers

Omri Thomas

Rashaad Tayob

Matthew de Wet

Philip Liebenberg

Investment philosophyForm follows function

Harnesses Abax’s full skillsetAsset allocation, stock selection, income selection and hedging

Build diversified portfolios

to be robust in a range of market outcomes

Downside protection

stock selection, asset allocation & hedging

Invest when risk vs. reward favourable

across the capital structure

Fundamentally value range of assets

top-down and bottom-up analysis

Multi-asset toolkit

A diversified approach to achieve long-term growth

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

8

SA equity valuationsOne standard deviation cheap

Source: Abax, Statpro, Bloomberg, Morningstar

3 Year IRR

Top down

=

17 - 20% p.a.

Bottom-up

=

15 - 17% p.a.

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

10

Security selection Track record

Source: Abax, Statpro, Bloomberg, Morningstar. As at 31 December 2019

Mandate Inception Measurement indexCAGR

(gross, pa)

vs. Index

(gross, pa)

vs. Peers

(net, pa)

Equity Oct 04 Capped SWIX TR 15.5% +1.9% +2.5%

Small/Mid Cap Equity Jul 04 Small/Mid Cap Index TR 17.0% +0.9% +3.1%

Global Equity Jan 13 MSCI ACWI TR 12.0% +2.2% +3.0%

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

ToolkitProtect and grow

We make active use of hedges to:

Typically we would implement a short fence strategy:

• Buy a certain range of protection, normally 8-12%

• Give away the upside above a certain level

Deeper hedges on large positions

12

HedgingStrategies

Protect the fund

against falling

prices

Create

asymmetric

pay-offs

Reduce the

volatility/risk to

the fund

Hold winning

positions for

longer

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

14

HybridsConvertible bonds

Source: Abax, Statpro, Bloomberg, Morningstar

15

HybridsEurostoxx notes

Source: Abax, Statpro, Bloomberg, Morningstar

Historic

al odds

Bear

odds

1 year 58% 55%

2 years 12% 10%

3 years 8% 5%

4 years 2% 0%

5 years 3% 0%

50% haircut 0% 10%

Cash back 8% 20%

Expected return 20% 13%

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

17

Interesting opportunities High yielders

Source: Abax, Statpro, Bloomberg, Morningstar

Total Duration

High Yield

Bucket

Total = 11%

High Yielders

PSG Prefs

(10% ZAR Yield)

Bank sub debt

(11% ZAR YTM)

Zambezi Prefs

(11% YTM)

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

19

CurrencyA separate asset class

Source: Abax, Statpro, Bloomberg, Morningstar

Utilise widest toolkit

• Active asset allocation

• Security selection

• Hedging strategies

• Hybrids

• Duration and yield

• Currency

• Diversification and portfolio construction

Toolkit Protect and grow

21

Abax InvestmentsValuations as at end December 2019

Source: Abax Investments

Cheap

• SA Equity

• EM Equity

• SA Hybrids

• Protection (Vol)

Fair• DM (ex US) Equity

• SA Bonds

• SA Linkers

• SA Property

• ZAR

Expensive

• US Equity

• DM Bonds

• DM Credit

• DM Cash

• Commodities

22

Amplify SCI* Flexible EquityCurrent asset allocation

Source: Abax Investments

Exposure % %

Physical Equity Exposure 46%

Index Future Exposure 0%

Index Option Exposure -2%

Equity Option Exposure 4%

Net Effective Exposure (Local) 48%

Offshore Equity 12%

Property 6%

High Yielders 10%

Converts 4%

Net Exposure 'risk assets' 80%

Amplify SCI* Flexible Equity Fund

*Sanlam Collective Investments

24

AimAsymmetric mind-set providing capital growth over the medium to long term, looking to deliver equity-like returns at lower risk levels

RiskAn aggressive solution with potential capital volatility over the short term but less volatile than a pure equity fund

AssetsLarge exposure to equity instruments and will look to diversify across the capital structure, using strategic hedging for protection |

Maximum 100% equity | Maximum 30% offshore

ReturnPeer-group benchmark with two-thirds upside; one-third downside of ALSI

ASISASouth African Multi-Asset Flexible

Amplify SCI* Flexible Equity Solution profile

*Sanlam Collective Investments

25

Amplify SCI* Flexible Equity FundManaged by Abax Investments

Competitor selection based on the Glacier Shopping List for 2019Q3 Source: Abax Investments & Morningstar Direct as at end December 2019

2/3rd upside capture of FTSE/JSE

As at end December 2019

Annualised

return (%)

1 Year

Amplify SCI Flexible Equity B4 15.54

Fund A 7.29

Fund B -1.55

FTSE/JSE All Share 12.05

(ASISA) SA MA Flexible Equity 7.95

1/3rd downside capture of FTSE/JSE

Thank you

Amplify Investment Partners (Pty) Ltd is an authorised Financial Services Provider. Sanlam Investments consists of the following authorised Financial

Services Providers: Sanlam Investment Management (Pty) Ltd (“SIM”), Sanlam Multi Manager International (Pty) Ltd (“SMMI”), Satrix Managers (RF) (Pty)

Ltd, Graviton Wealth Management (Pty) Ltd (“GWM”), Graviton Financial Partners (Pty) Ltd (“GFP”), Satrix Investments (Pty) Ltd, Amplify Investment

Partners (Pty) Ltd, Sanlam Capital Markets (Pty) Ltd (“SCM”), Sanlam Private Wealth (Pty) Ltd (“SPW”), Sanlam Credit Fund Advisor Proprietary Limited,

Sanlam Africa Real Estate Advisor Proprietary Limited and Sanlam Employee Benefits (“SEB”), a division of Sanlam Life Insurance Limited and Simeka

Wealth (Pty) Ltd; and has the following approved Management Companies under the Collective Investment Schemes Control Act: Sanlam Collective

Investments (RF) (Pty) Ltd (“SCI”) and Satrix Managers (RF) (Pty) Ltd (“Satrix”). Sanlam Collective Investments (RF) (Pty) Ltd is a registered and

approved Manager in terms of the Collective Investment Schemes Control Act. A schedule of fees can be obtained from the Manager.

Abax Investments is a licenced financial services provider (FSP no: 856)

Matrix Fund Managers is a licenced financial services provider (FSP no: 44663)

Sentio Capital Management is a licenced financial services provider (FSP no: 33483)

Terebinth Capital is a licenced financial services provider (FSP no: 47909)

Truffle Asset Management is a licenced financial services provider (FSP no: 36584)

Laurium Capital is a licenced financial services provider (FSP no: 856)

Collective investment schemes are generally medium- to long-term investments. Past performance is not necessarily a guide to future performance,

and the value of investments/units /unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available from

the Manager on request. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The Manager does not provide

any guarantee with respect to either the capital or the return of a portfolio. The manager has the right to close the portfolio to new investors in order to

manage it more efficiently in accordance with its mandate. Income funds derive their income primarily from interest-bearing instruments. The yield is

current and is calculated on a daily basis. If the fund holds assets in foreign countries it could be exposed to the following risks regarding potential

constraints on liquidity and the repatriation of funds: macro-economic, political, foreign exchange.

Disclaimer