Harmony portfolios review & market update Glyn Owen September 2012

1. Harmony portfolios update

Introduction to Harmony portfolios Risk profiled core solutions: Balanced and Growth Multi-asset, multi-manager, multi-currency Diversified between local and global investments, asset class, currency, manager and style Dynamic tactical asset allocation Available in five currency / regional bases: USD, GBP, EUR, AUD and Asian The Harmony range uses no derivatives, structured products or CDOs Managed by Momentum Global Investment Management in London

Harmony Balanced Fund strategic allocation Source: MGIM, September 2012

Harmony Growth Fund strategic allocation Source: MGIM, September 2012

Summary performance August 2012 Source: MGIM, Lipper Hindsight, September 2012. Past performance is not indicative of future returns.

Harmony US Dollar Balanced asset allocation Source: MGIM, September 2012

Harmony US Dollar Balanced currency allocation Source: MGIM, September 2012

Harmony US Dollar Balanced peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony US Dollar Balanced manager performance Source: MGIM, Bloomberg , September 2012

Harmony US Dollar Growth asset allocation Source: MGIM, September 2012

Harmony US Dollar Growth currency allocation Source: MGIM, September 2012

Harmony US Dollar Growth peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony US Dollar Growth manager performance Source: MGIM, Bloomberg September 2012.

Harmony performance vs. cash, bonds and equities Source: MGIM, Lipper, September 2012. Past performance is not indicative of future returns..

Harmony Sterling Balanced asset allocation Source: MGIM, September 2012

Harmony Sterling Balanced asset allocation Source: MGIM, September 2012

Harmony Sterling Balanced peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony Sterling Balanced manager performance Source: MGIM, Bloomberg September 2012.

Harmony Sterling Growth asset allocation Source: MGIM, September 2012

Harmony Sterling Growth currency allocation Source: MGIM, September 2012

Harmony Sterling Growth peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony Sterling Growth manager performance Source: MGIM, Bloomberg September 2012.

Harmony performance vs. cash, bonds and equities Source: MGIM , Lipper, September 2012. Past performance is not indicative of future returns..

Harmony Asian Balanced asset allocation Source: MGIM, September 2012

Harmony Asian Balanced currency allocation Source: MGIM, September 2012

Harmony Asian Balanced peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony Asian Balanced manager performance Source: MGIM, Bloomberg September 2012.

Harmony Asian Growth asset allocation Source: MGIM, September 2012

Harmony Asian Growth currency allocation Source: MGIM, September 2012

Harmony Asian Growth peer group analysis September 2012. Past performance is not indicative of future returns. . *30/11/2006 to 30/12/2005

Harmony Asian Growth manager performance Source: MGIM, Bloomberg September 2012.

Harmony performance vs. cash, bonds and equities Source: MGIM, Lipper, September 2012. Past performance is not indicative of future returns..

Harmony Euro Balanced asset allocation Source: MGIM, September 2012

Harmony Euro Balanced currency allocation Source: MGIM, September 2012

Harmony Euro Balanced peer group analysis September 2012. Past performance is not indicative of future returns. . *30/09/2005 to 30/12/2005

Harmony Euro Balanced manager performance Source: MGIM, Bloomberg September 2012.

Harmony performance vs. cash, bonds and equities Source: MGIM, Lipper, September 2012. Past performance is not indicative of future returns..

Harmony AUD Growth asset allocation Source: MGIM, September 2012

Harmony AUD Growth currency allocation Source: MGIM, September 2012

Harmony AUD Growth peer group analysis September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

Harmony AUD Growth manager performance Source: MGIM, Bloomberg September 2012.

Harmony performance vs. cash, bonds and equities Source: MGIM , Lipper, September 2012. Past performance is not indicative of future returns..

2. Market review

This century has been bad for equity investing…… +15.0% Source: Bloomberg, September 2012

……but not for government bonds +122.5% Source: Bloomberg, September 2012

Asset class returns YTD 2012, USD terms Source: Bloomberg, Returns to 11/09/2012, September 2012

MSCI World since January 2008 Source: Bloomberg, September 2012

10 year government bond yield since January 2008 Source: Bloomberg, September 2012

Map of the markets YTD Source: Bloomberg, Returns from 30/12/2011-06/09/2012, September 2012

Asset class returns 2012 YTD Source: Lipper, Returns to 06/09/2012, September 2012

Asset class returns 2012 YTD Source: Lipper, Returns to 06/09/2012, September 2012

Asset class returns 2012 YTD Source: Lipper, Returns to 06/09/2012, September 2012

10 year government bond spreads vs. Germany Source: Bloomberg, September 2012

German vs. Spanish 10 yr government bond yields January 2000 to date Source: Bloomberg, September 2012

Performance of Chinese stock market vs. S&P500 Source: Bloomberg, September 2012

Performance of Gold, Copper and Oil Source: Bloomberg, September 2012

Currencies vs. USD Source: Bloomberg, September 2012

Performance of currencies vs. USD YTD 2012 Source: Bloomberg, Returns to 12/09/2012, September 2012

3. Market outlook

Critical issues Sustainability of growth in the US Structural slowdown in China – or hard landing? European imbalances Central bank pump pricing vs. global deleveraging

Clear slowdown in global growth Source: JPMorgan, September 2012

Economy has slowed: US leading economic indicators Source: Bloomberg, September 2012

US consumer confidence Source: Bloomberg, September 2012

US economic momentum is reasonable – but unemployment remains high US labour market Source: Bloomberg, September 2012

US construction: the only way is up? Source: Bloomberg, September 2012

US housing starts over the last 12 months Source: Bloomberg, September 2012

Fiscal cliff: will need to be tackled after November US budget deficits Source: Bloomberg, September 2012

US fiscal deficit as % of GDP 1791 -2011 Source : Deutsche bank, GFD. September 2012.

Budget deficits larger in the US than in peripheral Europe Budget deficit as a % of GDP % Greece, Ireland, Italy, Portugal and Spain: GDP- weighted fiscal balance US Source: Deutsche bank. September 2012.

China is landing GDP and industrial production Source: Bloomberg, September 2012

Major macro indicators continue to disappoint Chinese money supply (% yoy) Chinese PMI: new orders Level Source: Bloomberg, September 2012.

Export sector flatlining Chinese global exports (Real $) Source: Bloomberg, September 2012

Imports slowing Chinese global imports (Real $) Source: SocGen April 2012

China’s slowing growth: structural or cyclical? China Real GDP y/y % change % Source: Factset. September 2012.

The European crisis is not simply debt 1.0% -8.5% -1.7% -8.0% Current account balance 5.2% -0.8% Budget deficit to GDP -1.9% -4.6% -7.4% -7.2% -4.2% -4.5% -2.1% -6.0% -2.2% -2.4% Source: IMF, 2012 estimates.

Unit labour costs since the launch of the euro Source: Bloomberg, September 2012

Currencies vs. the Deutschemark Source: Bloomberg, September 2012

German Labour reform accelerated growth- can Italy? Source: Bloomberg, September 2012

The European stress / intervention cycle Don’t underestimate the political will to preserve the Eurozone Inflate, stagnate or default Austerity / growth European bail out of banks Issue of Eurobonds ECB – LTRO / OMT / rate cut Fiscal union

Central government debt burden 1900 to 2011 - advanced and emerging economies % Source: Reinhart (2010), Reinhart and Rogoff (2009 and 2011), sources cited therein and the authors

Total debt to GDP for developed economies 1990 - 2012 Source: Deutsche Bank, Haver. September 2012.

Debt composition varies widely Source: Bloomberg, September 2012.

Short term interest rates over past 10 years US, UK, Japan and Europe % Source: MGIM, Bloomberg. September 2012

The world is not normal: UK base rate 1694 to today Source: Deutsche Bank, GFD. September 2012.

The world is not normal: Swiss government bond yields Source: Bloomberg, MGIM. September 2012.

The world is not normal: 10 year government bond yields Source: Bloomberg, MGIM. September 2012.

The world is not normal: US 10 year yield since 1790 Source: Deutsche Bank, GFD, Bloomberg Finance LLp. September 2012.

Quantitative easing: Bank of England balance sheet as a % of GDP Source: Deutsche bank. September 2012.,

The UK recovery is weaker than in the great depression % Source: Deutsche Bank. September 2012.

Tail risk of extreme events are not insignificant US fiscal cliff Chinese ‘recession’ Eurozone disintegration Journey into the unknown – monetary easing

Equity market valuations *current year estimate Source: Bloomberg, Statistics to 06/09/2012. September 2012

MSCI World P/E ratio since 1995 Source: Bloomberg, September 2012

MSCI World price to book since 1995 Source: Bloomberg, September 2012

Tail wind of EM re-valuation now behind us MSCI World PB vs. MSCI GEM PB Source: Bloomberg, September 2012

Investment conclusion ‘New normal’ is now the consensus Deleveraging and rebalancing set to continue for years US – growth risk in 2013 China – structural slowdown underway Europe – stress / intervention cycle to continue Policy risks are high Further monetary loosening is certain Crisis presents an extraordinary valuation opportunity

Implications for portfolio construction Subdued growth low return expectations Continued deleveraging and tight credit financial strength is critical High tail risks high volatility Cyclical move down in commodities has further to run Deflation protection in safe haven bonds Income generating assets important safe dividend equities corporate bonds emerging market bonds Focus on: Diversification by asset class Quality defensive equities Inflation not today’s problem – but might be the end game Exploit tactical opportunities

4. Appendix: Momentum Global Investment Management

Who we are and why we are different Business & heritage Boutique focus and mindset Strong corporate backing: top 40 JSE listed company Group AuM: USD41 billion, London AuM: USD4.7 billion* Investment process Highly experienced and stable team Disciplined valuation driven investment process Capital preservation mindset Investment manager partnerships Genuinely bespoke solutions – highly attuned to client needs True dynamic asset allocation Use of external specialists Diversification across a wide range of asset classes Deal exclusively with institutions and intermediaries Source Momentum Global Investment Management, *As at July 2012.

Investment philosophy – core beliefs Markets are inefficient Inefficiencies create valuation extremes and offer opportunities Dynamic asset allocation will add value over time Increasing the investable universe will increase the opportunity set Effective use of broad range of asset classes generates better risk:return profile Blending uncorrelated assets enables true diversification Valuation is paramount Reversion to the mean works in the long run Wait for the ‘fat pitch’ No single manager / investment house is good at everything Dynamic manager selection is essential Focus on employing specialists to maximise opportunities

Risk management Asset class selection True risk is the possibility of permanent loss of capital Best defence is buying a diverse portfolio of undervalued a sets Valuation is key: Scenario testing used to stress test our valuations Manager selection Extensive operational due diligence process Onsite visits by our DD team as necessary Transparency required to guard against style drift Position sizing Target benchmark volatility Risk analysed at individual contribution and total portfolio level Position sizes adjusted to keep within target and ensure a prudent level of diversification Liquidity stress testing

Investment process Asset allocation Manager selection Momentum Funds identify most attractive strategies appoint external specialists for each asset class Manager selection Momentum Funds Portfolio construction construct optimal portfolio including risk management overlay risk management / due diligence on all positions & review Ongoing monitoring

Asset class research Where active management works Percentage of fund managers who underperform various performance hurdles Index +1% +2% +4% 84 Efficient Domestic Bonds* 66 77 Global Bonds 67 77 UK Equities 65 71 75 US Equities Semi-efficient 69 75 81 Global Equities European Equities 53 66 75 59 67 73 EM Equity 48 57 65 Japanese Equity 75 Inefficient 49 54 59 Small Cap* 67 January 2012. (Illustrative purposes only)

Manager research and selection Assets under management Investment style High alpha Returns based style analysis Risk/attribution analysis Check consistency through time Philosophy Process People Evidence Re-evaluation of existing managers Ongoing monitoring Asset class screening / initial research Quant analysis Due diligence Selection

Manager research process Buy discipline Sell discipline Appoint Manager Sell Manager What we’re looking for: Sound philosophy Disciplined process Proven team/implementation Robust capacity management Alignment of interests Business stability Sell indicators Upgrade decision Key individual/ team leaves Poor capacity management Inconsistent behaviour Negative corporate change Operational issues Manager Re-evaluation Manager Evaluation Continuous monitoring Idea Generation Re-evaluate Universe

Using the best talent from around the world Polar Morgan Stanley iShares Old Mutual Henderson M&G RWC Schroders Threadneedle Jupiter London Chicago: Driehaus Timpani Paris: Comgest Tokyo: Tiburon San Francisco: Artisan Connecticut: Lapides AXA IM BlackRock Wilmington: Marvin & Palmer New York: American Century Pzena Muzinich Cohen & Steers Arizona: ING Austin Yacktman Singapore: Firth Pictet Sydney: Aberdeen UBS

Disclaimer Momentum Global Investment Management is the trading name for Momentum Global Investment Management Limited. This document does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this document, and should be satisfied in doing so that there is no breach of local legislation or regulation. The information is intended solely for use by our clients or prospective clients, and should not be reproduced or distributed except via original recipients acting as professional intermediaries. This document is not for distribution in the United States. Prospective investors should inform themselves and if need be take appropriate advice regarding applicable legal, taxation and exchange control regulations in countries of their citizenship, residence or domicile which may be relevant to the acquisition, holding, transfer, redemption or disposal of any investments herein solicited. Any opinions expressed herein are those at the date this material is issued. Data, models and other statistics are sourced from our own records, unless otherwise stated herein. We believe that the information contained is from reliable sources, but we do not guarantee the relevance, accuracy or completeness thereof. Unless otherwise provided under UK law, Momentum Global Investment Management does not accept liability for irrelevant, inaccurate or incomplete information contained, or for the correctness of opinions expressed. We caution that the value of investments in discretionary accounts, and the income derived, may fluctuate and it is possible that an investor may incur losses, including a loss of the principal invested. Past performance is not generally indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments. Our investment mandates in alternative strategies and hedge funds permit us to invest in unregulated funds that may be highly volatile. Although alternative strategies funds will seek to follow a wide diversification policy, these funds may be subject to sudden and/or large falls in value. The illiquid nature of the underlying funds is such that alternative strategies funds deal infrequently and require longer notice periods for redemptions. These Investments are therefore not readily realisable. If an alternative strategies fund fails to perform, it may not be possible to realise the investment without further loss in value. These unregulated funds may engage in the short selling of securities or may use a greater degree of gearing than is permitted for regulated funds (including the ability to borrow for a leverage strategy). A relatively small price movement may result in a disproportionately large movement in the investment value. The purpose of gearing is to achieve higher returns associated with larger investment exposures, but has concomitant exposure to loss if positive performance is not achieved. Reliable information about the value of an investment in an alternative strategies fund may not be available (other than at the fund’s infrequent valuation points). Under our multi-management arrangements, we selectively appoint underlying sub-investment managers and funds to actively manage underlying asset holdings in the pursuit of achieving mandated performance objectives. Annual investment management fees are payable both to the multimanager and the manager of the underlying assets at rates contained in the offering documents of the relevant portfolios (and may involve performance fees where expressly indicated therein). Momentum Global Investment Management Limited (Company Registration No. 3733094) registered office at 20 Gracechurch Street, London EC3V 0BG. Momentum Global Investment Management Limited is authorised and regulated by the Financial Services Authority in the United Kingdom, and is an authorised Financial Services Provider pursuant to the Financial Advisory and Intermediary Services Act 37 of 2002 in South Africa. © Momentum Global Investment Management Limited 2012

Contact: Lucy Richardson Marketing Manager Momentum Global Investment Management Lucy.richardson@momentumGIM.com T: +44 207 939 1725 www.momentumgim.com