USD S&P 500 Autocall Closing date: 14 September 2020 Take advantage of exposure to attractive returns in USD with a high degree of capital protection for your clients 1
Investec USD S&P 500 Autocall overview An investment product designed Payoff profile to provide investors with an attractive return in US Dollars even if the S&P500 Index makes Backtesting and only modest returns over the performance investment term. Investment information Distributor information 2
Investec USD S&P 500 Autocall overview Growth Capital protection Credit reference Listing and Minimum Term to maturity 8.00% pa cumulative 100% capital protection entity liquidity investment five years, with enhanced return in in USD provided the Credit linked to Listed on the JSE. Minimum opportunity to call Payoff profile USD (settled in ZAR) index does not end Royal Bank of Daily liquidity with investment of in year three or linked to S&P 500 below 60% of initial Scotland Group 0.5% bid-mid R100 000 and four Index index level PLC spread increments of R1 000 thereafter Opportunities Backtesting Risks and • Equity returns performance • Credit risk Performance is linked to the S&P 500 Index, consisting of 500 blue-chip stocks listed in the Investors take credit risk on Investec Bank Limited US. The index has averaged 9.8% annual return for almost a century as the issuing entity, as well as Royal Bank of Scotland PLC as the credit reference entity • Currency exposure The Investec USD S&P 500 Autocall provides investors exposure to US equity markets in US • Forego dividends Dollars. The product is cash settled in Rand requiring no use of offshore allowance Investors will receive no dividends in the Autocall. Investment This investment is not suitable for an investor who information • Potential to protect the downside wishes to receive regular income Investors have downside protection in USD for a drop of up to 40% in the S&P 500 Index. Following a drop of more than 40%, the investor will participate in the index one-for-one • Capped performance Investors will not participate in any outperformance • Investment net of fees of the Index above 8.00% pa All fees are already factored into the payoff of the Autocall. As such, if an investor invests R100 000, they will receive R100 000 exposure Distributor information 3
Investec S&P 500 Index USD S&P 500 Data Autocall Materials Energy 2% overview Real Estate 3% Information 3% Technology Utilities 25% 4% Consumer Staples 8% Payoff profile Industrials 8% Consumer Discretionary 10% Backtesting Communication Health Care 11% and Financials 15% performance 11% Market Capitalization USD 2,216.14bn Weighting Free-Float Market Cap Investment information Cap Factor n/a Number of Constituents 500 Listing All constituents listed in USA Currency USD Distributor information Inception Date 26 September 1997 4
Investec USD S&P 500 Trade Date Autocall overview Year 3 Call Year 4 Call Year 5 - Maturity Payoff Capital + profile 3 x enhanced Capital + return 5 x enhanced return Initial Index Level 100% Backtesting and Capital returned performance Barrier Level 60% Capital Loss Investment information Two opportunities to call Capped cumulative upside Capital at risk before maturity E.g. If the Index is equal to or above Capital is at risk if the Index ends Distributor If the Index is equal to or above initial Index level on year three, down more than 40% at maturity. information investor earns 3 x 8.00% = 24.00%, The Investor will then participate initial Index level on automatic regardless of the outperformance of in the Index one-for one call date in year three or four 5 the Index
Investec USD S&P 500 Autocall Below table shows the effect of the Dollar Rand Currency exposure overview conversion rate at expiry as well as the returns Investor has exposure to US equity market in US Dollars through the product. received in USD The product is cash settled in Rands Payoff profile Converted to USD Autocall Return in Investment Return Settled in Rand at Settled in Rand at Autocall Expiry Initial Investment at R16.50 Index Return * Autocall USD in USD R18 R15 Year 3 R100 000.00 $6 060.60 -10%Continues to year 4 Year 3 R100 000.00 $6 060.60 10%Automatic Call 24% $7 515.14 R135 272.59 R112 727.16 Backtesting and performance Year 4 R100 000.00 $6 060.60 -10%Continues to year 5 Year 4 R100 000.00 $6 060.60 20%Automatic Call 32% $7 999.99 R143 999.86 R119 999.88 Investment information Year 5 R100 000.00 $6 060.60 -25%Returns Capital 0% $6 060.60 R109 090.80 R90 909.00 Year 5 R100 000.00 $6 060.60 25%Automatic Call 40% $8 484.84 R152 727.12 R127 272.60 Year 5 R100 000.00 $6 060.60 -42%Loss of Capital -42% $3 515.15 R63 272.66 R52 727.22 Distributor * Assumed returns for illustrative purposes information 6
Investec USD S&P 500 Autocall Autocall year 3 70% overview Backtested performance Autocall year 4 4% In 70% of daily observations dating back to 2000, investors would have received a return on the first opportunity to call in year three Autocall year 5 7% equating to a return of 24% in USD. Did not call 19% Payoff profile Historically, investors would have never breached the loss barrier, Loss incurred 0% i.e worst case scenario, investors received their capital back. * 0% 10% 20% 30% 40% 50% 60% 70% 80% 120.00% Backtesting 100.00% and performance 80.00% 60.00% 40.00% Investment 20.00% information 0.00% -20.00% -40.00% Distributor -60.00% information 03/01/2005 03/01/2007 03/01/2009 03/01/2011 03/01/2013 03/01/2015 03/01/2017 03/01/2019 7 Average S&P 500 Index Return Autocall Return *Past performance is not indicative of future performance.
Investec USD S&P 500 Autocall overview Closing date Trade date Listing date Maturity date 14 September 21 September 26 September 21 September Payoff profile 2020 2020 2020 2025 Backtesting Credit risks Tax implications and As the Investec USD S&P 500 Autocall is credit linked to the reference entity, should a Credit performance The information provided in this brochure is Event (bankruptcy, failure to pay, obligation default, repudiation/moratorium, government general information and should not be construed as tax advice. intervention and restructuring) occur in respect of the issuer or reference entity, the return would be reduced in accordance with the recovery ratio. It is recommended that prospective investors seek independent professional legal, tax and accounting If a credit event occurs in respect of the credit reference entity, on or before the maturity date, the advice and consider the investment in the light of Investment return due to the Investor will then be equal to the market value of the Autocall multiplied by the the Investor’s particular circumstances. information adjusted recovery price, which will be payable on the Maturity Date. This reduced return will earn No responsibility is accepted by IBL for the interest at the overnight SAFEX rate, from the date upon which it is determined that the Credit treatment of any court of law, tax, banking or other Event occurs, until the scheduled Maturity Date. authority in any jurisdiction of the investment and no undertaking, warranty or representation is given The debt represents general, unsecured, senior, contractual obligations of the Issuer and Credit with regard to the outcome of any such investment. Reference Entity. Distributor information 8
Investec USD S&P 500 Autocall overview Annual fee Stockbroking account Distributor fee 0.75% annual distribution Investor needs a stockbroking 1.25% upfront fee in year two and three account to invest distribution fee Payoff profile Fees How to invest Financial advisors receive a fee of 1.25% (incl VAT), paid by IBL, as well as 0.75% (incl VAT) in year two and year three. This fee is All investors must hold a stock broking account at a stock built into the cost of the Autocall and the investor will have 100% broking institution. of their funds allocated to the product. Please note that all fees are denominated in US Dollars converted Distributors Backtesting to Rands. and • Complete application form on our webpage performance • Complete investor schedule electronically, available on Distributor Licenses our webpage The investment manager/ financial advisor is required to be • Send completed application form and investor schedule authorized to provide financial services in the following to SPSupport@investec.co.za products/subcategories in order to sell this product: • Confirm investors BDA account is funded with required invested amount Investment Category I information 1.24 Structured Deposits or Distributors should note that no payments will be received 1.11 Warrants, Certificates and other instruments by IBL and that all settlement will take place via Category II stockbroking accounts on a delivery versus payment basis on the settlement date, being the day following listing date 2.18 Structured Deposits or on the JSE. 2.8 Warrants, Certificates and other instruments Distributor information 9
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