The Green Economy Structural change delivers winners and losers - PowerPoint PPT Presentation

The Green Economy

Structural change delivers winners and losers

Valuations are elevated Source: Thomson Reuters

When the tide goes out OUTLOOK INVESTMENT STRATEGY • • Global economic growth steady Global investing offers • Markets are expensive relative diversification and return to history potential but is not without risk • • Cautious on valuations near Selective investment driven by term, selective in exposure valuation • 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

The real economy 57M 2016 GDP growth: 0.3% 28% Unemployment Population growth: 1.6% 32% Youth Unemployment (Age 15-24) 25 % live under R17 a day Second to last country = 13.8 million people in education performance relative to 55 % live under R38 a day countries with similar = 30.4 million people spending Source: Stats SA, IMF World Economic Outlook, NGI

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

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

A country at a cross roads OUTLOOK INVESTMENT STRATEGY • • Support from global Focus on valuations and diversified, growth and carry trade near term balanced investment portfolios • 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

Positioning: Asset Allocation 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 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 Since 3 Year 5 Year 10 Year inception (Annual) (Annual) (Annual) (Annual) % Return 6.5 11.1 10.1 14.6 % Real return 0.9 5.5 3.9 8.8 (return after inflation) 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.

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