Assumptions for Long-term returns: SA - Real

2.0%

2.5%

3.0%

6.0%

7.0%

0.5%

0.5%

3.0%

4.0%

0% 1% 2% 3% 4% 5% 6% 7%

Cash returns

Term premium

ILB returns

Inflation Risk premium

Bond returns

Property premium

Property returns

Equity Risk premium

Equity returns

Source : SIM

CPI+5% (Domestic)

Source : SIM

What could you expect given these RETURN assumptions

Domestic AllocationLong term real

returnWeighted average

Equity 35 7 2.45

Property 5 6 0.3

Bonds 15 3 0.45

ILB’s 15 2.5 0.38

Cash 30 2 0.6

Alpha     1

Total 100%   5.17%

What returns can you expect?

Long Term Real

Returns To Asset Classes

Conservative

[CPI + 2%]

Expected Real Return To Fund =

Asset Class Exposure X Real Return

To Asset Class

Cautious [CPI + 3%]

ModerateModerate

AggressiveAggressive

SA Equity 7% 10 10 x 7% 25 37.5 45 57.5

Intl Equity 6% 5 5 x 6% 5 7.5 10 12.5

TOTAL EQUITY   15   30 45 55 70

USD Cash 1% 5 5 x 1% 5 7.5    

Intl Bonds 2%        5 10 7.5

SA Bonds 3% 30 30 x 3% 30 22.5 12.5 7.5

SA Cash 2% 50 50 x 2% 35 15 17.5 10

SA Listed Property 6%       5 5 5

EXPECTED REAL RETURN

  3.0 2.95 3.7 4.5 5 5.7

Source : SIM – ALSI, ALBI, STeFi, J255T (prop), MSCI World, JPM Gbl Bond, 3m USD LIBID

10 years to 31 May 2012

CPI+5% (Domestic)

Source : SIM

What could you expect given these RETURN assumptions

Domestic AllocationLong term real

returnWeighted average

Equity 35 7 2.45

Property 5 6 0.3

Bonds 15 3 0.45

ILB’s 15 2.5 0.38

Cash 30 2 0.6

Alpha     1

Total 100%   5.17%

Asset Class Allocation

8.4%

12.6%

14.0%

BONDS 30.0%

10.0%

STeFI 20.0%

PROPERTY 5.0%

Annual Management Fee 0.75%

SIM Active Income Fund

SA Listed Prop Index

EQUITY

Index

FTSE/JSE Top40 Index

A Top Quartile General Equity Fund

SIM Bond Plus Fund

FTSE/JSE Dividend Plus Index

CASH

Asset Class Allocation

EQUITY 35.0%

BONDS 30.0%

10.0%

STeFI 20.0%

PROPERTY 5.0%

Annual Management Fee 0.98%

CASH

SA Listed Prop Index

Mean of the ASISA Domestic General Equity Category

Index

SIM Active Income Fund

SIM Bond Plus Fund

Annualised Performance

Annualised Standard Deviation

1 Year 13.10% 4.96

2 Years 14.09% 5.87

3 Years 15.46% 5.58

4 Years 12.46% 7.58

5 Years 9.62% 7.42

Annualised Performance

Annualised Standard Deviation

1 Year 9.91% 4.86

2 Years 10.66% 5.57

3 Years 13.35% 5.30

4 Years 9.64% 6.81

5 Years 8.04% 6.74

Portfolio construction

Thank you

Asset allocation Overweight Underweight Neutral

Domestic Equity Nominal Bonds

Inflation Linked Bonds

Cash

Property

GlobalEquity

Property

Cash

Bonds

SIM’s current positioning

1 March 2011