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MACROSOLUTIONS
2019 MARKET OUTLOOK: PETER BROOKE
HEAD OF MACROSOLUTIONS
THE TIDE IS TURNING JANUARY 2019
Our investment process is shaped by theme (environment) and price (valuation). improve, the currency will strengthen and interest rates will fall. However, at
This is how we see the world, which feeds into how we build diversified this moment, there is no room for error. The good news in all this is that if we
exposure in our portfolios. Every six months we review our longer-term themes can navigate these issues, there is potential for a positive surprise. If, on the
and valuations to ensure we don’t get caught up in the day-to-day noise of other hand, we fail, there will be a short-term sell-off, but some support will
the markets. still come from valuations being cheap enough.
In developing our view for the different asset classes, there are two important Because of the risks mentioned above, we have very high real yields on our
themes that we see unfolding in the year ahead: a deterioration in the United South African assets. This means that the future income on all of our solutions
States and an in improvement in South Africa. This is a dramatic change in is now much higher, which increases the certainty of return. Share prices are
momentum. volatile but dividends and interest income are much more stable. The higher
level of income also means that if the market does sell off on bad news, there
AMERICA IS (NOT SO) GREAT is a valuation floor that appears quite quickly. It gives us a lot more confidence
Previously, we have viewed the US as the global winner, with its strong dollar, about the sustainability of these returns and therefore our ability to deliver to
a bull market, record profits and superb growth. A big change within our clients’ expectations.
themes this year is that we are now calling the top in the US. While the US
economy is still booming, US equities are expensive and we expect bad news Last year was a very tough year for investors with equities and property falling
– either in the form of interest rates going up or economic growth disappointing. sharply. This was despite the fact that earnings came through – meaning
Whichever happens, it is bad news for investors and we expect US equities valuations have got cheaper. Cheaper valuations and depressed historic returns
to underperform, while the rest of the world offers cheaper equity markets. mean higher future returns and we have upgraded our expected returns across
all asset classes. For instance, our expected real return from the Balanced
SA’S (TAIL) WINDS OF CHANGE Fund is now 4.5% a year over the next five years, up from 4% in mid-2018.
The outlook for South Africa, on the other hand, is a bit more positive. The This is a lot better than the 3.5% expected in 2015 – when markets were
situation in the country is currently so bad that it can only get better. Last year, most expensive and we were talking about the theme of a low return world.
markets were disappointed when “Ramaphoria” didn't materialise, but in reality
the long and hard grind of improving conditions is taking place. Once Within the different asset classes, our expectations are as follows:
confidence returns, businesses will start spending again and this will drive
SOUTH AFRICAN
growth.
SA EQUITIES
With the US as good as it gets and South Africa as close to as bad as it can We have increased our expected real return to 5.5% a year over the next five
get, we look for some rotation. This does not mean that South Africa’s growth years, up from 5% a year in mid-2018. We are seeing many more opportunities
will be higher than that of the US, but markets will look at the rate of change. to buy companies than before and our portfolios are on a forward price-
As such, now is not the time to be taking money overseas and we have actually earnings ratio of 10 times, which offers good value. 2018 showed the
bought money back from the US to buy SA assets. importance of share selection and we managed to avoid most of the land
mines that blew up some of our competitors’ portfolios.
The big risk for our markets and economy is essentially political. The outlook
for South Africa would be very bullish if it was not for some looming issues: SA LISTED PROPERTY
the Budget, Eskom and the elections. Because of the destruction of the Zuma Listed property was a disaster in 2018, rocked by governance issues in the
era and the perilous state of Eskom's financials (and those of the other state- Resilient stable. Even the better quality assets which we owned de-rated and
owned enterprises), South Africa’s rising debt burden is pushing us to the very are now offering a dividend yield of 9.5%. Tough trading conditions and bad
edge of being downgraded to junk status. If we make the right decisions, we capital allocation leave us neutral on listed property, despite the mouth-watering
will avoid a downgrade. This will lead to improved confidence, growth will valuations.SA BONDS GLOBAL BONDS
Bonds offer exceptional value in a global context, reflecting the high risk of a Global bonds are still expensive and we expect a negative real return from
“junk” rating. We are positive on bonds as a lot of bad news is already in this asset class. The exception to this is US bonds, which have started to offer
the price, whereas if we manage to avoid a downgrade, bonds will deliver better value for the first time in ages.
an excellent return. Our five-year real return outlook for local bonds has
increased to 4% a year.
GLOBAL CASH
The US Federal Reserve remains critical to the supply of global liquidity and
SA CASH we are optimistic that US rates will be on hold in the short term. However,
The hawkish stance from the South African Reserve Bank is good for fixed over the longer term, very low unemployment and rising wages will result in
income assets and bad for growth. We anticipate that interest rates may go higher interest rates – putting borrowers under pressure.
a little higher. We expect a long-term real return from cash of around 2% a
year.
INTERNATIONAL
GLOBAL EQUITY
Global markets have got cheaper. As a result, we have revised our five-year
real return outlook up from 4.5% to 5% a year. However, we are negative on
the US equity markets and favour an underweight position. We see more
attractive valuations in the rest of the world.
EXPECTED LONG-TERM REAL RETURNS (JANUARY 2019)
REAL RETURN VIEW COMMENT
SA + SA starting to improve
Equity 5.5% Neutral + Getting cheaper, more opportunities
Property 6.5% Neutral Value trap
Bonds 4.0% + Good real return
Cash 2.0% Neutral + Reasonable risk-adjusted return
Global* − Still maintain some diversification
Equity 5.0% Neutral − Risk increasing as liquidity shrinks
Bonds -0.5% − Global bonds expensive, US better
Cash -0.5% − Rate normalisation on the go
Note: These are long-term, real returns expected over the next five years, as at the end of January 2019.
* The international return expectations above are in US dollar terms; any rand depreciation will add to returns in rands.
THE SYMBOLS
Neutral: Real returns will be at or around the long-term historic average over the next five years; the weight in each of our portfolios is roughly
equivalent to that of their benchmark, where applicable.
Neutral +: Real returns will likely be at or around the long-term historic average over the next five years. However, as there may be some
opportunities available for us to capture some alpha, the weight in each of our portfolios may be slightly overweight to that of their benchmark,
where applicable.
+ (positive): Real returns will be above the long-term historic average over the next five years; our portfolios are overweight compared to their
benchmarks, where applicable.
Neutral −: Real returns will likely be at or around the long-term historic average over the next five years. However, due to prevailing negative
conditions, it is likely that our portfolios may be slightly underweight compared to their benchmarks, where applicable.
− (negative): Real returns will be below the long-term historic average over the next five years; our portfolios are underweight compared to their
benchmarks, where applicable.MARKET COMMENTARY
AS AT THE END OF DECEMBER 2018
OLD MUTUAL FLEXIBLE FUND
Investors experienced very low volatility in the years leading up to (Peter Brooke and Arthur Karas)
2018, but market action in 2018 has shaken them out of that comfort (Classification category: South African — Multi-Asset — Flexible)
zone. The year started off well enough, with global equities up nearly
2018 was a disappointing year for the fund, as it was for all funds with high equity
5% in US dollars in January 2018, but there was little to celebrate from
benchmarks. The fund performed in line with its peers, but lagged its performance
that point on as wave after wave battered risk assets. Global equities
objective. During 2018, the fund reduced exposure to global equity following good
ended the year 9% down in US dollars, while local equities were 11%
performance. The proceeds were repatriated back to South Africa and used to
lower in rand terms and the rand weakened 16% against the US dollar.
increase holdings of selected domestic equities, where we see some opportunities.
Many would fault rising trade tensions, Chinese growth slowing, country- The fund also added to South African bonds, which offer a high real yield.
specific crises (such as what we observed in Turkey and Argentina) and
stock-specific problems (such as the US Food and Drug Administration The fund’s holdings in local cash and bonds helped to shield against weak equity
(FDA) versus British American Tobacco, the unravelling of the Steinhoff markets. While global equities held up well during 2018, the last quarter was
debacle and MTN’s Nigeria woes) for this outcome. While each of particularly weak for international markets. Avoiding exposure to SA listed rand-
these likely weighed on investor sentiment, the underlying issue as we hedge property shares was a big positive for the fund, as this sector was badly
see it was the withdrawal of global liquidity, primarily through the US hit over the past 12 months.
Federal Reserve (the Fed) unwinding quantitative easing and raising
short-term interest rates. The reason for the Fed taking this action is This active asset allocation is a key tool to help us deliver better long-term returns
understandable – the US economy was growing rapidly, unemployment and certainly helped protect the fund from the worst of the fall. Looking forward,
was falling to very low levels and they needed to manage the risk of the news is getting better. We have recently upgraded our expected long-term,
their economy overheating, which, if left unchecked, would likely lead real returns on the back of cheaper valuations, which bodes well for future returns.
to a hard landing in the years ahead. With the benefit of hindsight, During 2019 you can expect us to start using the fund’s interest-bearing assets to
investors were ill-prepared for the change in liquidity conditions. In buy back into equity markets to take advantage of the sell-off. This will create the
addition, the valuation underpin for many assets has disappeared in potential for much better returns going forward.
recent years – it’s easier for expensive assets to fall when conditions
become less favourable. OLD MUTUAL BALANCED FUND
Locally, the initial bout of Ramaphoria fizzled out fairly early in the year (Graham Tucker and Warren van der Westhuizen)
as it dawned on the market that South Africa’s recovery was perhaps a (Classification category: South African – Multi-Asset – High Equity)
bit further out than expected. While Cyril Ramaphosa was able to move Investors are no doubt very disappointed that none of the 25 largest balanced
swiftly early in the year, it is near impossible to undo the damage of funds in the category delivered a positive return in 2018. These 25 funds averaged
the past decade in a few short months. This realisation, combined with a fall of 3.8%, with the hardest hit falling 8.6%. Relative to this, the Old Mutual
global concerns, tighter liquidity and stock-specific news, saw increased Balanced Fund delivered a reasonable outcome, as the fund fell approximately 3%
volatility in local assets. Many of the local equity market heavyweights over the year. While the negative result for the year is by no means pleasing, this
fell sharply in the year. For instance, Naspers was down 16%, Richemont relatively competitive result is largely attributable to the consistent implementation of
was 14% lower and British American Tobacco fell 40%. Property, a our investment philosophy – resulting in the fund avoiding many of the poor stock-
much-loved asset class in recent years, experienced poor performance, specific stories, such as Aspen and Resilient, and actively managing exposures,
even after adjusting for the Resilient fall-out. It wasn’t all bad news
such as strategically reducing Naspers early in the year, buying more Capitec in
though. Following the pullback caused by the Viceroy report, Pepkor
the Viceroy-assisted correction and buying local bonds at attractive yields. We
and Capitec were amongst the better performers. Local bonds held up
also reduced equity exposure ahead of the correction in the fourth quarter.
well despite uncertainty around land reform and, more recently, Eskom.
Although the fund has performed competitively, remaining top quartile over three
years with a 4-star overall Morningstar rating, and has experienced less volatility
OLD MUTUAL MAXIMUM RETURN FUND OF FUNDS than many of our peers, the absolute level of returns generated in recent years is
(Peter Brooke and Arthur Karas) disappointing. Markets have been turbulent and returns difficult to come by, the
(Classification category: Worldwide — Multi-Asset — Flexible) likelihood of which had been rising given the elevated returns achieved after the
The Old Mutual Maximum Return Fund of Funds has the highest return target in Global Financial Crisis. We are now seeing better value in select areas, meaning
our range of asset allocation funds and, as such, can have a very high exposure that we are more encouraged by the opportunities today than we were a year
to equity. It has a strategic benchmark of 95% in equity, which is a rule of thumb ago. That said, we are not out of the woods just yet.
for the average exposure in growth assets. Therefore, weak equity markets will We believe that South African assets look attractive from both a valuation and a
result in negative returns in the short term. However, as this is a multi-asset class macroeconomic perspective. Local bonds are offering very attractive real yields,
fund, it can protect investors by switching some of its equity into cash. We did while better economic growth should improve our fiscal stance. Within equities,
this during 2018, mainly through selling global equity, which had performed the fund has exposure to banks and smaller industrial companies with a large
well. We brought this money back to South Africa and bought small capitalisation local footprint. The rand is another means of expressing our positive view on
shares, which had already performed badly. We also bought South African bonds, South Africa. The fund has less rand-hedge exposure than what would be typical.
which offer a high real yield. The net result of these trades was that we were 15% Despite refreshed valuations, we have become increasingly more concerned about
underweight to growth assets (equity) at the end of the year. global equities, particularly the US, which makes up the vast majority of the global
market. As such, we’ve been reducing our global equity exposure and building
This active asset allocation is a key tool to help us deliver better long-term returns
up our global fixed income weight.
and certainly helped protect the fund from the worst of the fall. With the benefit
of hindsight, we should have done more selling. However, our job is to look We understand that this has been a difficult period for our clients. Given the
forward and the news is getting better. We have recently increased our expected circumstances, we believe that we have delivered good results in terms of relative
long-term, real returns. The upgrade has been driven by cheaper valuations. This performance and volatility experienced. Looking forward, in our view there are
bodes well for future returns. Over 2019 you can expect us to start using the better returns in the medium term and we are actively managing the portfolio to
fund’s interest-bearing assets to buy back into equity markets, to take advantage capture these returns. At times like these, we must remind ourselves to stay the
of the sell-off. This will create the potential for much better returns going forward. course rather than capturing the wrong side of volatility by de-risking.MARKET COMMENTARY CONTINUED
OLD MUTUAL MODERATE BALANCED FUND The fund’s local equity holdings detracted from absolute performance of the fund.
(John Orford and Alida Jordaan) After a good start at the beginning of 2018, the equity market disappointed,
(Classification category: South African — Multi-Asset — Medium Equity) posting double-digit negative returns. The equity building block performed more
In line with weaker financial markets, the fund delivered a disappointing return or less in line with the Capped SWIX equity benchmark. Overweight positions
for the year. However, performance relative to the medium prudential peer group in Old Mutual, Capitec, Pepkor and KAP Industrial Holdings contributed to
is very pleasing. During the year, the fund’s allocation to local government bonds performance, while avoiding shares like Aspen and Mediclinic, which showed
benefited performance. We used spikes in local bond yields to increase our significant declines, added to relative returns. Detractors varied from companies
holding, which, in our view, offer attractive long-term returns to investors. The that are more locally focused, like Omnia, Tongaat and PPC, to MTN (impacted
fund also has a considerable allocation to cash and corporate credit. The credit by Nigerian woes) and British American Tobacco, which has been held for its
portion of the portfolio is particularly attractive − consisting of a well-diversified diversification characteristics.
holding of high-quality corporate credit with very low interest rate risk. This offers
Looking ahead, the fund continues to favour local over global assets with local
yields above cash and inflation and delivers bond-like returns for much lower risk
fixed income assets offering an attractive yield and local equities starting to offer
than owning long-dated government bonds. Holding some cash also means that
much better value. We believe the fund is well positioned to benefit from the higher
the fund will be able to take advantage of opportunities that arise.
returns on offer in most South African assets. While the outlook for growth assets
The fund continues to hold a reasonable portion of its assets offshore. During and the rand is uncertain, the improved valuations in many South African assets
2018, as the risk posed to global equities from rising US interest rates increased, should deliver good inflation-beating returns to long-term investors.
we reduced our offshore equity holding significantly. This was mostly done prior
to the sharp sell-off in global equities in the final quarter of 2018. The proceeds OLD MUTUAL REAL INCOME FUND
(John Orford and Zain Wilson)
were allocated to offshore cash and selected offshore US dollar bonds. This offered
(Classification category: South African — Multi-Asset — Low Equity)
protection against falling equities and the weaker rand.
The combination of a rising global cost of capital and peaking growth resulted
The fund’s local equity holdings detracted from absolute performance of the fund. in a wider spread of negative real returns across major asset classes than those
After a good start at the beginning of 2018, the equity market disappointed, experienced in the Global Financial Crisis. This meant there were few places to
posting double-digit negative returns. The equity building block performed more hide outside of cash or low duration credit assets. This held true in South Africa,
or less in line with the Capped SWIX equity benchmark. Overweight positions with cash returning 7.3% over the year, and government bonds ending on a similar
in Old Mutual, Capitec, Pepkor and KAP Industrial Holdings contributed to 7.7%, albeit with significantly more volatility. Over this period, the Old Mutual
performance, while avoiding shares like Aspen and Mediclinic, which showed Real Income Fund delivered a return of 5.3%. Three-year returns ended at 6.9%,
significant declines, added to relative returns. Detractors of performance varied behind the fund’s target of CPI + 1-2% net of fees.
from companies that are more locally focused, like Omnia, Tongaat and PPC, to
While the fund started the year with lower than average growth asset exposure,
MTN (impacted by Nigerian woes) and British American Tobacco, which has
with the benefit of hindsight, we did not reduce our growth asset exposure enough.
been held for its diversification characteristics.
While our positions in domestic equity, and more so property, outperformed their
Looking ahead, the fund continues to favour local over global assets, with local respective benchmarks, they lagged behind cash for the year and were the primary
fixed income assets offering an attractive yield and local equities starting to offer drags on returns. However, as valuations have reset lower, expected future returns
much better value. We believe the fund is well positioned to benefit from the higher have improved. This is evident in the fund’s equity returns over the past quarter
returns on offer in most South African assets. While the outlook for growth assets moving into positive territory and exceeding the broader market by close to 10%.
and the rand is uncertain, the improved valuations in many South African assets
Looking ahead, inflation should drift higher from cyclical lows in 2019, but demand
should deliver good inflation-beating returns to long-term investors.
side pressures remain absent. While this doesn’t discount unforecastable risks from
OLD MUTUAL STABLE GROWTH FUND the volatile drivers of inflation, the absence of demand pressures reduces the risk
(John Orford and Alida Jordaan) of second-round effects. In such a benign inflation world, low duration, domestic
(Classification category: South African — Multi-Asset — Low Equity) fixed income assets are a high hurdle to beat, offering real yields in excess of
In line with weak financial markets, the fund delivered a disappointing return for 2.5%, with low risk. The fund thus maintains a higher weighting to good quality,
the year and has lagged its inflation target over the past five years. However, we domestic credit assets, with some duration added as domestic bond yields have
are pleased that the fund’s return was positive over the year and that it continues reset higher.
to perform ahead of its peer group.
Outside of an overweight tilt to domestic fixed income, we continue to favour income
During the year, the fund’s allocation to local government bonds benefited enhancement over growth and inflation protection across asset classes. Over the
performance. We have used spikes in local bond yields to increase our holding, last half of 2018, we added meaningful exposure to low duration offshore credit
which, in our view, offer attractive long-term returns to investors. The fund also has assets with attractive yields, further enhancing those yields by hedging the assets
a considerable allocation to cash and corporate credit. The credit portion of the back into rands. Within growth assets, the combined yield of 8% from domestic
portfolio is particularly attractive – consisting of a well-diversified holding of high equity and property in the fund is only marginally lower than what is available in
quality corporate credit with very low interest rate risk. This offers yields above domestic fixed income. With valuations resetting lower, the foundation for better
cash and inflation and delivers bond-like returns for much lower risk than owning future returns has been laid.
long-dated government bonds. Holding some cash also means that the fund will
be able to take advantage of opportunities that arise. Having navigated a tough year while meeting the fund’s capital preservation
mandate, we are confident that the fund is well positioned to deliver to its objective
The fund continues to hold a reasonable portion of its assets offshore. During of CPI + 1-2% returns net of fees for the year ahead.
2018, as the risk posed to global equities from rising US interest rates increased,
we reduced our offshore equity holding significantly. This was mostly done prior
to the sharp sell-off in global equities in the final quarter of 2018. The proceeds
were allocated to offshore cash and selected offshore US dollar bonds. This offered Sources: Fund returns and rankings are sourced from Morningstar Direct. All other data is sourced from
protection against falling equities and the weaker rand. Deutsche Bank Equity Research and FactSet.THREE-YEAR PERFORMANCE: (TO 31 DECEMBER 2018) ASSET ANALYSIS: (AS AT 31 DECEMBER 2018)
100%
8.0%
7.1% p.a.
7.0% 6.9% p.a.
75%
6.0% 5.6% p.a.
CPI 5.4% p.a.
5.0%
4.5% p.a.
50%
4.0%
3.5% p.a. 3.6% p.a.
3.4% p.a.
3.3% p.a.
3.0%
25%
2.0% 1.7% p.a.
1.0%
0%
0.0% Old Mutual Maximum Old Mutual Old Mutual Old Mutual Moderate Old Mutual Stable Old Mutual Real
Return Fund of Funds Flexible Fund Balanced Fund Balanced Fund Growth Fund Income Fund
Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Old Mutual Stable Old Mutual Real
Maximum Flexible Flexible Life Balanced Balanced Life Moderate Stable Stable Real Real Flexible Life Fund Balanced Life Fund Growth Life Fund Income Life Fund
Return Fund Fund Fund Fund Fund Balanced Growth Growth Income Income
of Funds Fund Fund Life Fund Fund Life Fund SA Equities Property Preference Shares Commodities Nominal Bonds
Convertible Bonds Inflation-linked Bonds Cash International Africa
Sources: Old Mutual Investment Group & Morningstar Sources: Old Mutual Investment Group & Morningstar
3 years 5 years
Performance 31 December 2018 1 year (p.a.) (p.a.) Highest2 Average2 Lowest2 Description TER1 TC1
Old Mutual Maximum Return Fund of Funds -4.2% 1.7% 6.3% 23.6% 8.9% -6.7% 1.91% 0.11%
Benchmark3 -4.2% 4.3% 8.1%
UT Peer Average -1.3% 0.6% 6.0% Worldwide - Multi-Asset - Flexible
Old Mutual Flexible Fund -5.5% 3.3% 6.1% 54.0% 14.0% -26.9% 1.65% 0.16%
Old Mutual Flexible Life Fund -5.3% 3.5% 6.4%
Target: CPI + 5% to 7% p.a. 10.2% 10.5% 10.4% CPI + 5% to 7% p.a. over rolling 3 years
UT Peer Average -4.3% 1.8% 4.2% South African - Multi-Asset - Flexible
Old Mutual Balanced Fund -3.3% 3.4% 5.4% 45.5% 13.1% -23.2% 1.65% 0.11%
Old Mutual Balanced Life Fund -3.1% 3.6% 5.6%
Target: CPI + 4% to 5% p.a. 9.2% 9.5% 9.4% CPI + 4% to 5% p.a. over rolling 3 years
UT Peer Average -3.6% 2.4% 4.8% South African - Multi-Asset - High Equity
Old Mutual Moderate Balanced Fund A -0.2% 4.5% 12.7% 5.6% -0.2% CPI + 3% to 4% p.a. over rolling 3 years 1.62% 0.20%
Target: CPI + 3% to 4% p.a. 8.2% 8.5%
UT Peer Average -1.8% 2.9% South African - Multi-Asset - Medium Equity
Old Mutual Stable Growth Fund 2.0% 5.4% 6.3% 18.6% 8.3% -5.3% 1.60% 0.06%
Old Mutual Stable Growth Life Fund 2.3% 5.6% 6.6%
Target: CPI + 2% to 3% p.a. 7.2% 7.5% 7.4% CPI + 2% to 3% p.a. over rolling 3 years
UT Peer Average 1.2% 4.4% 5.8% South African - Multi-Asset - Low Equity
Old Mutual Real Income Fund 5.3% 6.9% 6.8% 15.4% 8.7% -0.7% 1.41% 0.06%
Old Mutual Real Income Life Fund 5.5% 7.1% 7.0%
Target: CPI + 1% to 2% p.a. 6.2% 6.5% 6.4% CPI + 1% to 2% p.a. over rolling 3 years
UT Peer Average 1.2% 4.4% 5.8% South African - Multi-Asset - Low Equity
CPI4 5.2% 5.5% 5.4%
1
Total Expense Ratio is a historic measure and includes the annual service fee. A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER may not necessarily be an
accurate indication of future TERs. Transaction Cost (TC) is a necessary cost in administering the fund and impacts fund returns. It should not be considered in isolation as returns may be impacted by many other factors over
time including market returns, the type of fund, the investment decisions of the investment manager and the TER. TERs and TCs as at 30 September 2018.
2
Rolling 12-month returns (since inception).
3
Composite benchmark: 60% FTSE/JSE Capped Shareholder Weighted Index, 35% MSCI All Country World Index, 5% STeFI Composite Index.
4
The CPI figures are lagged by one month as the number was calculated before this month’s inflation rate was released. Sources: Morningstar and Old Mutual Wealth
FOR MORE INFORMATION, VISIT:
www.macrosolutions.co.za
Old Mutual Investment Group (Pty) Ltd
PO Box 878, Cape Town 8000
Tel: +27 21 509 5022 Fax: +27 21 509 4663
www.oldmutualinvest.com
Statutory information applicable to collective investment portfolios listed in table above:
• You should ideally see the funds as medium- to long-term investments. The fluctuations of particular investment strategies affect how a fund performs. Your fund value may go up or down. Therefore, we cannot guarantee the investment capital
or return of your investment. How a fund has performed in the past does not necessarily indicate how it will perform in the future.
• The fund fees and costs that we charge for managing your investment are disclosed in the relevant fund’s minimum disclosure document or table of fees and charges, both available on Old Mutual Unit Trusts' public website or from its contact centre.
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or our contact centre on 0860 234 234.
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• The Net Asset Value to Net Asset Value figures are used for the performance calculations. The performance quoted is for a lump sum investment. The performance calculation includes income distributions prior to the deduction of taxes and
distributions are reinvested on the ex-dividend date. Performances may differ as a result of actual initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. Annualised returns are the weighted average
compound growth rates over the performance period measured. Performances are in ZAR and as at 31 December 2018.
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Old Mutual Unit Trusts has the right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate.
MacroSolutions is a boutique within Old Mutual Investment Group (Pty) Ltd (Reg No 1993/003023/07), a licensed financial services provider, FSP 604, approved by the Financial Sector Conduct Authority (www.fsca.co.za) to provide
intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of 2002. Old Mutual Investment Group (Pty) Ltd is wholly owned by Old Mutual Investment Group Holdings (Pty) Ltd and is a member of the
Old Mutual Investment Group.
The investment portfolios may be market-linked or policy based. Investors’ rights and obligations are set out in the relevant contracts. Unlisted investments have short-term to long-term liquidity risks and there are no guarantees on the investment
capital nor on performance. It should be noted that investments within the fund may not be readily marketable. It may therefore be difficult for an investor to withdraw from the fund or to obtain reliable information about its value and the extent of
the risks to which it is exposed. The value of the investment may fluctuate as the value of the underlying investments change. In respect of pooled, life wrapped products, the underlying assets are owned by Old Mutual Life Assurance Company
(South Africa) Limited, who may elect to exercise any votes on these underlying assets independently of the Old Mutual Investment Group. In respect of these products, no fees or charges will be deducted if the policy is terminated within the first
30 days. Returns on these products depend on the performance of the underlying assets.
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