Bennie Crous

22 November 2012

Columbus Retirement Funds – Investment Feedback

Index Linked Life Stage PortfoliosProduct Overview

Product overview• Low cost structure

o Passive investment

• Caters for different savings profiles

o More aggressive investment strategy for younger members

o Income and capital protection for older members

• Fewer risks

o No tracking error (Momentum underwrites the returns)

Fees per building block

• CAPI40 Total Return – 25bp

• MSCI Word Index Total Return – 50bp

• GOVI - 10bp

• Momentum Money Market – 20bp

• Momentum Capital Plus – 50bp

Fees per portfolioAge Fees (bp)

48 and below 25.5

49 26.6

50 27.7

51 28.8

52 29.9

53 31.0

54 31.2

55 31.4

56 31.5

57 31.7

58 31.6

59 32.0

60 32.0

Index allocation matrix

Market value of holdings

31 October 2012 Pension Fund Provident Fund

Momentum Capital Plus 24,223,107 28,810,332

CAPI40TR 111,831,951 70,725,224

MSCI World Index 31,934,797 21,565,190

Money Market 14,776,603 13,318,743

GOVI 51,314,437 40,929,696

Total 234,080,896 175,349,184

Index Linked Life Stage PortfoliosReturns

Returns as at 31 October 2012

0%2%4%6%8%

10%12%14%16%18%

1 Month 3 Months 6 Months 1 Year 3 Years 5 Years Since Inception

Age <=48 Age 52 Age 56 Age 60

Equity returns

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Oct

11

Nov

11

Dec

11

Jan

12

Feb

12

Mar

12

Apr

12

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

CAPI40TR MSCI (Rand adjusted)

Bond returns

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Oct

11

Nov

11

Dec

11

Jan

12

Feb

12

Mar

12

Apr

12

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

GOVI

Capital protection returns

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%O

ct 1

1

Nov

11

Dec

11

Jan

12

Feb

12

Mar

12

Apr

12

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

MM MOM CAP+

Summary

• Provide exposure the appropriate asset classes given term to retirement

• Low fees do not erode real returns

• No hidden cost, i.e. No negative active returns

Long term expected returns per asset class

Assumptions

• Risk premiums on various asset classes in relation to ILB remain constant

over time

• Yield on ILB’s with 10 year duration used as proxy for long term expected

returns from it

• Yield on ILB’s were 2.8% and 1.7% in 2007 and 2012 respectively

Long term expected real returns

30-Sep-07 30-Sep-12SA Cash -0.75% 2.1% 0.9%SA ILBs 0.00% 2.8% 1.7%SA Bonds 0.75% 3.6% 2.4%SA Property 3.75% 6.6% 5.4%SA Equity 5.25% 8.1% 6.9%Commodities -0.25% 2.6% 1.4%Global Equity 4.25% 7.1% 5.9%Global Bonds -0.25% 2.6% 1.4%

Long term expected real return per asset classeAsset Class

Asset Class Risk Premium in

relation to ILB

Disclaimer• This presentation  should not be  regarded  as  advice.  Whilst all reasonable 

care  has   been  taken  in  the  preparation  thereof, MMI Holdings Limited, its

subsidiaries, including Momentum Group Limited and Metropolitan Life Limited,

and its employees shall not be liable  for any loss, damage (whether direct or

consequential) or expense of any nature which may be suffered as a result of or

which may be attributable , directly or indirectly , to the use of or reliance upon it.

• We suggest that you consult your financial advisor  before taking any decision

based on this presentation.

Index Linked Life Stage PortfoliosCompliance

Fund ComplianceClause Description (Comments)

3.4 Momentum will allocate Linked Units to the Fund in accordance with the investment instructions of the Fund, subject to provisions of Annexure “A” as may be amended from time to time by written agreement.

3.6 Contributions made in accordance with 3.1, shall be allocated to Linked Units –

3.6.1 on the Business day the Contribution is made, at the price ruling at the end of the immediate preceding Business day on which the investment instruction

was received by the Company, provided such investment instruction was received prior to 14:00, subject to the conditions set out in clause 3.7;

3.6.2 on the Business day immediately following the date upon which the Contribution was made at the price ruling at the end of the Business day on which the investment instruction was received by the Company, should such instruction be received after 14:00, subject to the conditions set out in clause 3.7

3.7 In the case of a Contribution which is, in opinion of the Company, sufficiently large so as to potentially affect (materially or adversely) the participation valuation of the Linked Units, that Contribution shall, at the discretion of the Company, be invested over a period not exceeding 30 (thirty) days of receipt thereof. In the interim, the Contribution will be held in an interest bearing account and interest earned on the Contribution during this period, will accrue in favour of the Fund. The Company undertakes to notify the Fund in writing on the first business day immediately following the date of receipt of investment instruction from the Fund, if the provisions of this sub clause are to be applied. Never been applied

Fund Compliance (Continue)Clause Description (Comments)

4.3 In case of Withdrawals, the value of Withdrawals from the Fund received and notified in writing to the Company shall be calculated:

4.3.1 With reference to the value of the Linked Units referred to in clause 4.1 at the price ruling at the end of the immediate preceding Business day, provided the Withdrawal instruction was received before 14:00, subject to the contributions set out in clause 4.3.3

4.3.2 With reference to the value of the Linked Units referred to in clause 4.1 at the price ruling at the end of the same Business day, subject to the conditions set out in clause 4.3.3

4.3.3 In the case of a Withdrawal, which is, in opinion of the Company, sufficiently large so as to potentially affect (materially or adversely) the participation valuation of the Linked Units, that Withdrawal shall, at the discretion of the Company, be disinvested over a period not exceeding 30 (thirty) days of the receipt thereof. In this case 4.3.1 and 4.3.2 shall not apply and the Linked Units shall be liquidated at the actual price at the which the underlying assets are realised and the Company shall not be entitled to any further fees or remuneration other than as set out in clause 7 hereof Never been applied

6.1 The company shall provide the following reports to the Fund – 6.1.1 A monthly accounting report containing such information as required in

according with the Pension Funds Acto of 1956; and

Fund Compliance (Continue)Clause Description (Comments)

6.1 6.1.2 A quarterly investment report detailing the performance of the Linked Units during the period and such further information as may reasonably be expected to be contained in a report of this nature

6.1.3 A yearly audit certificate6.1.4 To the extent that a certificate contemplated by regulation 28 (2) (a) (ii) (bb) of

the Pension Funds Act of 1956 might become a requirement in respect of the Policy, such certificate. (the Company records for clarity that it is not its intention to issue the Policy as a linked policy in terms of the Long-term Insurance Act, 52 of 1998 or for any other purpose) Requirements to be discussed presentation

6.1.5 A Retirement Fund Tax certificate, if applicable, on a half yearly basis contained information about the taxable income earned for a given period. Not applicable

6.1.6 Capital Gains Tax (CGT): The CGT, if any, will be calculated by the Company. The CGT information will be reported to the administrators of the Fund for reporting or payment by the Fund as applicable. Not applicable

6.1.7 Exchange control information (Excon): The Company will from time to time provide the Fund with exchange control information in the prescribed format which the Fund must report to the South African Reserve Bank. Included in the quarterly reports

6.3 In addition, the Company shall arrange for regular presentations to the made to the Fund.