(PLGLOBAL) GLOBAL BALANCED

Transcription

1 Investment Accounting Report for the period 01 April 2015 to 30 June 2015 Prudential Life Global Balanced Fund (PLGLOBAL) GLOBAL BALANCED Prudential Life Global Balanced Fund (PLGLOBAL) Global Balanced Quarterly Report for the period ending 30 June 2015

2 TABLE OF CONTENTS FUND SUMMARY PERFORMANCE REVIEW PERFORMANCE REVIEW COMMENTARY PORTFOLIO MANAGER COMMENTS ASSET ALLOCATION SA EQUITY AND PROPERTY SA FIXED INCOME INTERNATIONAL ASSETS INTERNATIONAL ASSETS ANNEXURE A:HOLDINGS AS AT QUARTER-END Prudential Life Global Balanced Fund (PLGLOBAL) 1

3 FUND SUMMARY The portfolio is invested into units in the Prudential Life Global Balanced Fund. It is an actively managed pooled fund with investments selected from all the traditional asset classes, including offshore assets, which represents Prudential's best investment view for managing a global balanced mandate of this nature. It complies with Regulation 28 of the Pension Funds Act. FUND DETAILS Portfolio name: Prudential Life Global Balanced Fund Investment vehicle: via units in the Prudential Life Investment portfolio Mandate type: Global Balanced Performance objective: To outperform the median return of Alexander Forbes Global Manager Watch (Large) participants Portfolio inception date: 01 July 2009 Portfolio value: R 5,254,222,689 Unit price*: R Portfolio managers: Michael Moyle, David Knee and Marc Beckenstrater * The Portfolio valuation and unit price are based on the gross investment, before costs. The valuation is based on the unit price of the first day after quarter-end, which reflects market valuation as at close of business at quarter-end. This is to allow for comparable performance measurement. Note: Figures in the report may not add up due to rounding of decimals. Prudential Life Global Balanced Fund (PLGLOBAL) 2

4 PERFORMANCE REVIEW The Fund's performance is measured against the median fund return of Alexander Forbes Global Manager Watch (Large) participants. To quarter end Fund Benchmark Relative* 3 months 0.2% 0.1% 0.1% 1 year 8.3% 7.9% 0.4% 3 years (annualised) 18.2% 17.1% 1.1% 5 years (annualised) 17.4% 16.4% 1.0% Since inception: 01/07/2009 (annualised) 17.6% 16.6% 1.0% * There may be differences in relative return due to rounding of decimals. PERFORMANCE PER ASSET CLASS OVER THE QUARTER Asset class Fund Return Index returns** SA Equity (excl SA Property) 0.0% -0.1% SA Property -5.6% -6.2% SA Corporate Bonds (excl Inflation Linked Bonds) -1.2% -1.4% SA Inflation Linked Bonds 1.8% 1.4% SA Cash 1.6% 1.4% International Equity 0.5% 0.6% International Tactical Asset Allocation 2.3% 0.3% International High Yield Bond 0.8% -1.0% **Index returns - SA Equity: FTSE/JSE Shareholders Weighted Index - SA Property: FTSE/JSE SA Listed Property Index - SA Bonds: BEASSA All Bond Index - SA Inflation Linked Bonds: IGOV - SA Cash: STeFI Call Deposit Index - International Equity: MSCI AC Index - International Bonds: Barclays Capital Global Aggregate Bond Index - International Cash: LIBOR - International High Yield Bond: Barclays Capital Global Aggregate Bond Index - International Tactical Asset Allocation: USD LIBOR Prudential Life Global Balanced Fund (PLGLOBAL) 3

5 PERFORMANCE REVIEW COMMENTARY The main contributor to the Fund s performance over the quarter was its domestic cash holding, which was the strongest performing asset class following international cash. The rand weakened against developed market currencies over the quarter: 0.3% against the US dollar, 5.8% and 2.9% respectively against the pound sterling and euro. However, International Equity and International Bonds still delivered positive returns in rand terms, contributing approximately 20 basis points to the quarter s return. This gains was however negated by the losses from Domestic Equity, Domestic Bonds and in particular Domestic Property. The main contributor to the Fund s performance relative to the market, was its credit selection within the Fixed Income asset classes, both domestically and internationally. Global markets started the second quarter of 2015 reflecting the disappointment of the Q1 contraction in the US economy, but by June sentiment had improved despite mounting worries over Greece. In the US, the Federal Reserve did further moderate its outlook for interest rates in the face of slower-than-expected growth and low inflation. In Europe, good news on the improving economy was overwhelmed towards the end of the quarter by the growing likelihood of a Greek default. Emerging markets generally remained in the doldrums, experiencing further currency weakness and lower commodity prices (with the notable exception of oil), while China slowed further amid more efforts by the authorities to boost economic activity. And after a strong start to the year during which many financial markets reached very expensive levels, equities broadly tracked sideways and fixed income assets came under pressure from concerns over anticipated higher US interest rates, a reduction in deflationary fears in Europe and worse-than-expected developments in Greece, among other factors. With investors now believing in the robustness of the US recovery, combined with a sell-off in the European bond market as deflationary fears abated during the quarter, US Treasuries sold off fairly sharply and the yield curve steepened. Investment-grade and high-yield bond spreads widened versus USTs. On the equity front, the strong rally of Q1 continued only for the first two weeks of Q2, followed largely by range-trading and later losses on the back of uncertainty over Greece in June. The US S & P 500 returned 0.3% for the quarter. US corporate 12-month earnings expectations were revised upward on generally improved growth in the US and Europe. Tokyo s Nikkei recorded a respectable 3.5% for the quarter, while European equity markets all lost ground for the quarter in euro terms. The local economic environment remained weak, dominated by the threat of rising inflation in the wake of a weaker rand and higher oil and electricity prices. The FTSE/JSE All Share Index was basically flat for the second quarter, returning -0.2% in volatile trading amid investor fears over US interest rate rises, elevated valuations and a general risk-off environment. The Basic Materials sector caused the biggest drag, reflecting the ongoing poor conditions in the mining industry in the face of the continued deterioration in Chinese growth. The top contributors to relative performance was the Fund s big overweight positions to strong performing British American Tobacco plc, Investec plc and Pick n Pay. The Fund s overweight positions in Sappi Ltd, Sun International and Netcare were some of the biggest detractors as these stocks suffered losses. SA bonds experienced more selling in Q2. The yield on the 10-year SA government bond rose to much more attractive levels, with the yield curve steepening. The All Bond Index produced a total return of -1.4% for the quarter, with the longest-dated bonds being the weakest performers and the shortest-dated paper the strongest. Inflation-linked bonds posted a total return of 1.6% for the quarter. This equalled cash, making these two asset classes the strongest performers for the quarter. The inflation break-even rate (as measured by 10-year ILB yields versus conventional bonds) rose to 6.5% at quarter-end, a level we consider relatively high compared to our own longer-term inflation framework. Listed property was the poorest performer among local asset classes for the quarter, losing 6.2%, after having posted exceptionally strong returns for the past year. After having reached very expensive levels compared to its own history and relative to long-dated bonds, property was vulnerable to worsening inflation and interest rate expectations. Prudential Life Global Balanced Fund (PLGLOBAL) 4

6 PORTFOLIO MANAGER COMMENTS At the end of Q2 2015, our preference remains for global equities over local equities in our global portfolios. We have maintained the slight underweight position to local equities. Locally we are underweight listed property despite recent weakness in that asset class. After having reduced our overweight allocation to bonds to neutral in Q1, we have bought back some bonds so that we are slightly overweight in multi-asset portfolios, reflecting the improved value on offer. Global equities: Our global asset allocation continues to favour equities over bonds or cash, and global equities over local SA equities, as global equities remain more attractively valued than SA equities on measures like Price-Earnings (P/E) and Price-Book value ratios. In our higher return-targeting multi-asset funds we are very near our maximum permitted 25% weighting in this asset class. We continue to favour European markets, which we believe still appear to be fairly valued, particularly after the Greece-related downturn, and remain underweight commodity producers like Australia and Canada, as well as the US. We remain concerned over the lack of delivery of global equity earnings. From a historic valuation perspective, developed market equities (such as Germany) still appear to be fairly valued to somewhat cheap, while emerging markets continue to be risky. After largely trading sideways during Q2, many market P/Es remain elevated, so in the absence of improving earnings, markets may be vulnerable to disappointment. Global fixed income: We remain underweight duration and continue to hold floating-rate notes (FRNs) in order to minimize interest rate risk, a position that paid off during Q2 given the sharp bond sell-off (especially in Europe). We remain positive on spread products in both investment-grade and high-yield corporate bond markets, given that we don t see an environment developing in which they would perform poorly (namely, an aggressive interest rate-hiking cycle or a recession that causes default rates to rise sharply). For domestic portfolios, we continue to expect local equities to offer reasonable real returns over the medium-term, despite looking somewhat expensive against fixed income assets. We continue to favour certain financial stocks over expensive industrials, a position which has benefited our portfolios over the quarter. Our top overweight positions include Old Mutual, Investec, Barclays Africa and Netcare, while our top underweights comprise MTN, Remgro and Sanlam. SA listed property: Despite improved valuations in listed property during the quarter, we remain slightly underweight. The sector is expensive relative to longer-dated bonds and compared to its own history, but remains supported by low real cash rates and is expected to deliver double-digit returns over the medium-term thanks to strong distribution growth and higher leverage. SA nominal bonds: After having reduced our overweight and long-duration positions in nominal bonds in Q1, the notable weakness in bonds in Q2, particularly in the shorter end of the curve, again brought bonds to more attractive levels, prompting us to buy more bonds so that we are now again overweight in our multi-asset portfolios. We retain an overweight exposure to corporate bonds, which offer attractive yields over their government counterparts. During the quarter we bought a new 20-year government-guaranteed bond issue from Eskom, offering a very attractive yield of nearly 10%. Inflation-linked bonds: In the wake of the strong rally in ILBs during the quarter on the back of rising inflation fears, ILBs now look somewhat expensive versus their conventional counterparts, after having been relatively cheap to fairly valued in Q1. We are therefore somewhat underweight in these assets in our multi-asset portfolios. Break-even inflation is now being priced in at approximately 6.5% (at 10 years), up from 5.9% at the end of March, a level we consider elevated. As such we see ILBs as expensively priced compared to their conventional counterparts. SA equity: Despite recent weakness, we believe South African equities continue to be somewhat expensive, and so remain slightly underweight to neutral on this asset class. South Africa continues to be one of the most expensive markets on a relative basis, yet actual earnings growth has been largely flat since mid Prudential Life Global Balanced Fund (PLGLOBAL) 5

7 ASSET ALLOCATION The Fund's performance objective is to deliver a high real return over the long term by investing in a range of all the traditional asset classes. We expect the performance to be ahead of that of the average asset manager's similar product solution. In this sense, the Fund is benchmarked to an internal benchmark (as displayed in the graph below) that Prudential believes to be appropriate for peer-relative mandates of this type. FUND STRUCTURE This Quarter Previous Quarter Benchmark % of Fund SA Equities (excl SA property) SA Property SA Bonds (excl ILB) SA Inflation Linked Bonds SA Cash (incl FRN) International Equity International Bonds International Property International Cash International Tactical Asset Allocation Prudential Life Global Balanced Fund (PLGLOBAL) 6

8 SA EQUITY AND PROPERTY The equity holdings below are measured against the FTSE/JSE Shareholders Weighted Index. It excludes holdings in SA listed real estate stocks as they are treated as a separate asset class. It however includes internationally listed real estate stocks as we view them as equity and not as property. EQUITY STRUCTURE AS PER THE FTSE/JSE INDUSTRY GROUPING Fund Benchmark % of Equity Basic Materials Industrials Consumer Goods Health Care Consumer Services Telecommunications Financials Technology TOP 10 HOLDINGS Weight as % of total equity holdings %. STANDARD BANK GRP 10.8% BRITISH AMERICAN TOBACCO 8.4% OLD MUTUAL PLC 7.6% SASOL 6.3% NASPERS 5.1% FIRSTRAND 4.7% BARCLAYS AFRICA GROUP LIMITED 4.5% BHP BILLITON PLC 4.1% ANGLO AMERICAN PLC 4.1% NETCARE 3.9% Total 59.5% Prudential Life Global Balanced Fund (PLGLOBAL) 7

9 SA EQUITY AND PROPERTY TOP OVER AND UNDERWEIGHT EQUITY POSITIONS Top overweight positions STANDARD BANK GRP OLD MUTUAL PLC BRITISH AMERICAN TOBACCO / REINET INVESTMENTS SCA BARCLAYS AFRICA GROUP LIMITED NETCARE Top underweight positions NASPERS MTN GRP SANLAM ASPEN PHARMACARE HLDG WOOLWORTHS HLDG TOP 5 PROPERTY HOLDINGS Weight as % of SA listed property holdings %. PRU PROPERTY FUND CLASS B 100.0% Total 100.0% Prudential Life Global Balanced Fund (PLGLOBAL) 8

10 SA FIXED INCOME BOND STRUCTURE BY ISSUER TYPE This quarter Previous quarter % of Bonds Corporate Bonds SA Government Bonds SA Government Guaranteed Bonds SA Inflation Linked Bonds TOP 5 HOLDINGS BY ISSUER* Weigh as % of total fixed income holdings (excluding cash) Issuer name % Firstrand Bank Ltd 1.7% Ekurhuleni Metro Municipality 1.6% Absa Bank Ltd 1.5% Airports Company South Africa Ltd 1.2% Development Bank of Southern Africa 1.2% Total 7.2% * Corporate Bonds only Prudential Life Global Balanced Fund (PLGLOBAL) 9

11 INTERNATIONAL ASSETS The Fund's exposure to international assets are via unit holdings in pooled funds. INTERNATIONAL EQUITY FUND HOLDINGS International Equity 20 % of International Equity Spdr S&P 500 ETF First Eagle Amundi International Fund M&G North American Value Fund M&G Global Dividend Fund Vulcan Value Equity Fund M&G Asian Fund Ishares Core MSCI World ETF Johcm Continental European Fund M&G Japan Fund M&G Recovery Fund Digital Funds Stars Europe Ex UK Sanlam Global Financial Fund Ishares MSCI Europe Ex-Uk ETF Ishares MSCI Korea ETF Ishares Core DAX ETF Ishares Ftse Mib ETF Ishares MSCI India ETF Ishares MSCI South Korea Capped ETF INTERNATIONAL BOND FUND HOLDINGS International Bonds % of International Bonds Sparinvest High Yield Value Bond 09/17 Fund Eur Powershares Senior Loan Portfolio ETF Prudential Life Global Balanced Fund (PLGLOBAL) 10

12 INTERNATIONAL ASSETS The Fund's exposure to international assets are via unit holdings in pooled funds. INTERNATIONAL TACTICAL ASSET ALLOCATION FUND HOLDINGS International TAA % of International TAA M&G Episode Inc Fund M&G Episode Macro Fund Prudential Life Global Balanced Fund (PLGLOBAL) 11

13 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) EQUITIES 44.7 BASIC MATERIALS 9.5 CHEMICALS 3.3 CHEMICALS 3.3 OMN OMNIA HLDG 0.5 SOL SASOL 2.8 BASIC RESOURCES 6.2 FORESTRY & PAPER 1.5 MND MONDI 0.1 MNP MONDI PLC 0.4 SAP SAPPI 0.9 MINING 4.7 AGL ANGLO AMERICAN PLC 1.8 BIL BHP BILLITON PLC 1.8 GLN GLENCORE XSTRATA PLC 0.6 LON LONMIN PLC 0.5 INDUSTRIALS 3.0 CONSTRUCTION & MATERIALS 0.4 CONSTRUCTION & MATERIALS 0.4 GRF GROUP FIVE 0.1 PPC PPC LIMITED 0.1 RBX RAUBEX GRP 0.2 INDUSTRIAL GOODS & SERVICES 2.6 GENERAL INDUSTRIALS 0.8 MPT MONDI PACKAGING SOUTH AFRICA 0.4 REM REMGRO 0.3 INDUSTRIAL ENGINEERING 0.2 HDC HUDACO INDUSTRIES 0.2 INDUSTRIAL TRANSPORTATION 0.3 SPG SUPER GROUP 0.2 TRE TRENCOR 0.2 SUPPORT SERVICES 1.3 BVT THE BIDVEST GRP 1.3 CONSUMER GOODS 9.5 FOOD & BEVERAGE 3.2 BEVERAGES 1.2 SAB SABMILLER PLC 1.2 FOOD PRODUCERS 2.0 Prudential Life Global Balanced Fund (PLGLOBAL) 12

14 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) ARL ASTRAL FOODS 0.3 AVI AVI LIMITED 1.2 RCL RCL FOODS LIMITED 0.4 SOV SOVEREIGN FOOD INVESTMENTS 0.0 TBS TIGER BRANDS 0.1 PERSONAL & HOUSEHOLD 6.3 HOUSEHOLD GOODS 1.7 SHF STEINHOFF INTERNATIONAL HLDG 1.7 PERSONAL GOODS 0.8 CFR COMPAGNIE FINANCIERE RICHEMONT SA DEPOSITORY 0.8 TOBACCO 3.8 BTI BRITISH AMERICAN TOBACCO 3.8 HEALTH CARE 1.8 HEALTH CARE 1.8 HEALTH CARE EQUIPMENT & 1.8 NTC NETCARE 1.8 CONSUMER SERVICES 5.4 RETAIL 1.1 FOOD & DRUG RETAILERS 0.5 PIK PICK N PAY STORES 0.5 GENERAL RETAILERS 0.6 TFG THE FOSCHINI GROUP 0.6 MEDIA 2.3 MEDIA 2.3 NPN NASPERS 2.3 TRAVEL & LEISURE 2.0 TRAVEL & LEISURE 2.0 SUI SUN INTERNATIONAL 1.2 TSH TSOGO SUN HOLDINGS LTD 0.8 TELECOMMUNICATIONS 1.0 TELECOMMUNICATIONS 1.0 MOBILE TELECOMMUNICATIONS 1.0 MTN MTN GRP 1.0 FINANCIALS 14.1 BANKS 9.0 BANKS 9.0 BGA BARCLAYS AFRICA GROUP LIMITED 2.0 FSR FIRSTRAND 2.1 Prudential Life Global Balanced Fund (PLGLOBAL) 13

15 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) NED NEDBANK GRP 0.1 SBK STANDARD BANK GRP 4.8 INSURANCE 3.4 LIFE INSURANCE 3.4 OML OLD MUTUAL PLC 3.4 FINANCIAL SERVICES 1.7 GENERAL FINANCIAL 1.7 INL INVESTEC 0.0 INP INVESTEC PLC 1.2 JSE JSE 0.4 TECHNOLOGY 0.5 TECHNOLOGY 0.5 SOFTWARE & COMPUTER 0.5 DTC DATATEC 0.5 REAL ESTATE 2.8 FINANCIALS 2.8 FINANCIAL SERVICES 2.8 REAL ESTATE 2.8 PEPB PRU PROPERTY FUND CLASS B 2.8 FIXED INTEREST 9.6 FIXED INTEREST BONDS DOMESTIC 9.6 GOVERNMENT YRS 0.2 R203 REPUBLIC OF SOUTH AFRICA BOND 8.25% 15/09/ YRS 1.0 R204 REPUBLIC OF SOUTH AFRICA BOND 8.00% 21/12/ R208 REPUBLIC OF SOUTH AFRICA BOND 6.75% 31/03/ YRS 1.8 R186 REPUBLIC OF SOUTH AFRICA BOND 10.50% 21/12/ R2023 REPUBLIC OF SOUTH AFRICA BOND 7.75% 28/02/ YRS 3.4 R2030 REPUBLIC OF SOUTH AFRICA BOND 8.00% 31/01/ R2032 REPUBLIC OF SOUTH AFRICA BOND 8.25% 31/03/ R2037 REPUBLIC OF SOUTH AFRICA BOND 8.50% 31/01/ R2044 REPUBLIC OF SA BOND 8.75% (R2044) 0.2 R2048 REPUBLIC OF SOUTH AFRICA BOND 8.75% 28/02/ R209 REPUBLIC OF SOUTH AFRICA BOND 6.25% 31/03/ R213 REPUBLIC OF SOUTH AFRICA BOND 7.00% 28/02/ R214 REPUBLIC OF SOUTH AFRICA BOND 6.50% 28/02/ Prudential Life Global Balanced Fund (PLGLOBAL) 14

16 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) GOVERNMENT GUARANTEE YRS 0.1 DENG44 DENEL PTY LTD BOND 6.86% 29/09/ YRS 0.7 ES33 ESKOM HOLDINGS LTD BOND 7.50% 15/09/ CORPORATES YRS 0.5 ABL10A AFRICAN BANK LTD BOND 11.50% 15/03/ ABLS2A AFRICAN BANK LTD BOND 15.50% 13/07/ BAW2 BARLOWORLD LTD BOND 11.67% 02/10/ BAW8 BARLOWORLD LTD BOND 9.94% 02/10/ BAYA26 BAYPORT SECURITISATION PTY BOND % 30/09/ BEER02 SABSA HOLDINGS LTD BOND 7.125% 28/03/ CBL16 CAPITEC BANK LTD BOND 9.44% 18/05/ CGR11 CALGRO M3 DEVELOPMENT PTY LTD BOND 0.0 EQS02 EQSTRA HOLDINGS LTD BOND 12.92% 01/07/ EQS07 EQSTRA HOLDINGS LTD BOND 8.655% 09/04/ GFC04 GROUP FIVE CONSTRUCTION PTY LTD BOND 0.0 IPL6 IMPERIAL BANK LTD BOND 9.78% 28/09/ MTN04 MTN HOLDINGS PTY LTD BOND 10.13% 13/07/ NBK2A NEDBANK LTD BOND 10.55% 15/09/ NED11 NEDBANK LTD BOND 10.54% 17/09/ SNT01 SANTAM LTD BOND 8.25% 15/09/ SSA01 SAPPI MANUFACTURING PTY LTD BOND 9.63% 28/06/ YRS 0.7 AA05 ANGLO AMERICAN SA FINANCE LTD BOND 0.0 BAW11 BARLOWORLD LTD BOND 9.8% 01/10/ CBL22 CAPITEC BANK LTD BOND 8.50% 06/05/ DV22 DEVELOPMENT BANK OF SA BOND 9.45% 07/02/ EMM01 EKURHULENI METRO MUNI BOND 10.56% 28/07/ EMM02 EKURHULENI METRO MUNI BOND 10.72% 11/03/ FRB05 FIRSTRAND BANK LTD BOND 8.50% 21/12/ FRBC21 FIRSTRAND BANK LTD BOND 12.00% 21/12/ FRX19 FIRSTRAND BANK BOND 9.00% IBL46 INVESTEC BANK LTD BOND 7.25% 15/01/ MBSA01 MERCEDES-BENZ SA PTY LTD BOND 9.035% 16/04/ MBSA02 MERCEDES-BENZ SA PTY LTD BOND 8.905% 15/04/ NBK11A NEDBANK LTD BOND 8.92% 28/11/ NBK3A NEDBANK LTD BOND 11.39% 09/09/ OML03 OLD MUTUAL LIFE ASSURANCE COMPANY SA LTD BOND 0.0 RW21 RAND WATER BOARD BOND 9.97% 21/04/ SBS19 STANDARD BANK OF SOUTH AFRICA LTD BOND 0.0 SBS4 STANDARD BANK OF SOUTH AFRICA LTD BOND 0.0 SLI3 SANLAM LIFE INSURANCE LTD BOND 8.70% 15/08/ TN20 TRANSNET LTD BOND 10.50% 17/09/ UG21 UMGENI WATER BOND 10.70% 02/03/ YRS 0.5 Prudential Life Global Balanced Fund (PLGLOBAL) 15

17 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) 2CCT02 CITY OF CAPE TOWN BOND % 12/06/ CCT03 CITY OF CAPE TOWN BOND 11.16% 15/03/ ABS7 ABSA BANK LTD BOND 8.80% 11/09/ AIR02 AIRPORTS COMPANY SA LTD BOND 11.68% 30/04/ DV23 DEVELOPMENT BANK OF SA BOND 10.00% 27/02/ FRX24 FIRSTRAND BANK LTD BOND 10.75% 10/12/ NAM01 NAMIBIAN GOVERNMENT BOND 8.26% 19/11/ OML07 OLD MUTUAL LIFE ASSURANCE COMPANY SA LTD BOND YRS 0.2 AIR05 AIRPORTS COMPANY SA LTD BOND 10.0% 29/05/ CPV01 CPV POWER PLANT NO.1 BOND 11.00% 30/06/ DV29 DEVELOPMENT BANK OF SA BOND 10.10% 18/02/ EMM05 EKURHULENI MUNICIPALITY BOND 10.67% 17/04/ NRA028 SA NATIONAL ROADS AGENCY BOND 12.25% 30/11/ RW28 RAND WATER BOARD BOND % 10/12/ TN27 TRANSNET LTD BOND 8.90% 14/11/ INFLATION LINKED BONDS YRS 0.0 ABLI03 AFRICAN BANK LTD INFLATION LINKED BOND 0.0 ABLI05 AFRICAN BANK LTD INFLATION LINKED BOND 3.2% 0.0 R211 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND YRS 0.0 R212 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 WS05 TRANSCALEDON TUNNEL AUTHORITY INFLATION LINKED YRS 0.1 ABSI2 ABSA BANK LTD INFLATION LINKED BOND 0.0 FRBI23 FIRSTRAND BANK LTD INFLATION LINKED BOND 0.0 I2025 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 R197 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 SBSI11 STANDARD BANK OF SOUTH AFRICA LTD INFLATION YRS 0.3 AIRL01 AIRPORTS COMPANY SA LTD INFLATION LINKED BOND 0.0 I2038 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 I2046 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 I2050 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.0 R202 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.1 R210 REPUBLIC OF SOUTH AFRICA INFLATION LINKED BOND 0.1 FIXED INTEREST FIXED INTEREST DERIVATIVES FIXED INTEREST DERIVATIVES FIXED INTEREST DERIVATIVES R197Q5 R197 ILB FUTURE 06/08/ R202Q5 R202 ILB FUTURE 06/08/ CASH DERIVATIVES CONTRA-CASH BACKING -0.0 Prudential Life Global Balanced Fund (PLGLOBAL) 16

18 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) CASH 18.6 MONEY MARKET 17.9 CALL 17.9 INTEREST ACCRUED 17.9 PRMMCALL PRUDENTIAL MONEY MARKET-B CLASS 17.9 SFX001 SFX INITIAL MARGIN ZAR CALL 0.0 CASH 0.6 CASH 0.6 CASH 0.6 CASH - ACCRUALS 0.3 CASH CASH 0.3 FUT FUTURES SETTLEMENT 0.0 FLOATING RATE SECURITIES 0.2 FLOATING RATE SECURITIES 0.2 FLOATING RATE SECURITIES 0.2 ABLS3 AFRICAN BANK LTD FRN J3+4.00% 31/03/ ABLS5 AFRICAN BANK LTD FRN J3+4.99% 29/06/ BAW10 BARLOWORLD LTD FRN J3+1.55% 01/10/ BAYA19 BAYPORT SECURITISATION PTY FRN J3+4.45% 31/12/ BG22A2 BLUE GRANITE INVESTMENTS NO.2 PTY LTD FRN J3+1.45% 0.0 BG32A3 BLUE GRANITE INVESTMENTS NO.3 PTY LTD FRN J3+1.65% 0.0 BG42A2 BLUE GRANITE INVESTMENTS NO.4 PTY LTD FRN J3+1.70% 0.0 BLG1A6 BLUE GRANITE INVESTMENTS NO.1 PTY LTD FRN J3+1.60% 0.0 BWZJ18 BANK WINDHOEK FRN J3+1.80% 19/11/ CBL17 CAPITEC BANK LTD FRN J3+4.49% 23/08/ CPL003 CAPITAL PROPERTY FUND FRN J3+1.75% 28/02/ EQS05 EQSTRA HOLDINGS LTD FRN J3+2.70% 25/04/ EQS06 EQSTRA HOLDINGS LTD FRN J3+2.52% 09/04/ ERSA12 SA SECURITISATION PROGRAMME PTY LTD FRN J3+1.50% 0.0 FTG1 FIRST STRUT PTY LTD FRN J3+5.50% 05/09/2016 GRH1A3 GREENHOUSE FUNDING PTY LTD FRN J3+1.54% 25/10/ GRT02 GROWTHPOINT PROPERTIES LTD FRN J3+1.34% 13/05/ GRT03 GROWTHPOINT PROPERTIES LTD FRN J3+1.45% 15/10/ IPF03 INVESTEC BANK LTD FRN J3+1.65% 13/04/ NYT101 NYATI SECURITISATION FRN J3+2.70% 28/05/ RCSB03 RCS INVESTMENT HOLDINGS FRN J3+3.70% 15/07/ SBS18 STANDARD BANK OF SOUTH AFRICA LTD FRN J3+1.75% 0.0 SPDA4 SUPERDRIVE INVESTMENTS PTY LTD FRN J3+1.45% 0.0 TPDA05 COMMISSIONER STREET NO.7 RF LTD FRN J3+1.25% 0.0 VKE03 VUKILE PROPERTY FUND LTD FRN J3+1.55% 08/05/ UNCLASSIFIED -0.0 UNCLASSIFIED UNCLASSIFIED UNCLASSIFIED Prudential Life Global Balanced Fund (PLGLOBAL) 17

19 ANNEXURE A:HOLDINGS AS AT QUARTER-END Security Code Security Name % of Total Value (Cum) CCTGBP_GBP 0.1 CCTGBP_ZAR -0.1 CCTUSD_USD 0.1 CCTUSD_ZAR -0.1 FOREIGN SECURITIES 22.3 UNIT TRUSTS 22.3 UNIT TRUST 22.3 INTERNATIONAL EQUITY 19.1 AMINXUC FIRST EAGLE AMUNDI INTERNATIONAL FUND 2.9 CMIB.LN ISHARES FTSE MIB ETF 0.2 DAXEX.GY ISHARES CORE DAX ETF 0.3 DFXUKIA DIGITAL FUNDS STARS EUROPE EX UK 0.6 EWY.US ISHARES MSCI SOUTH KOREA CAPPED ETF 0.0 FAREA M&G ASIAN FUND 1.3 GLODIA M&G GLOBAL DIVIDEND FUND 1.9 IEUX.LN ISHARES MSCI EUROPE EX-UK ETF 0.4 IKOR.LN ISHARES MSCI KOREA ETF 0.3 INDA.US ISHARES MSCI INDIA ETF 0.2 JAPANACC M&G JAPAN FUND 0.9 JOHCEYE JOHCM CONTINENTAL EUROPEAN FUND 1.0 NAVFA M&G NORTH AMERICAN VALUE FUND 1.9 RECA M&G RECOVERY FUND 0.8 SANGLFU SANLAM GLOBAL FINANCIAL FUND 0.5 SPY.US SPDR S&P 500 ETF 3.0 SWDA.LN ISHARES CORE MSCI WORLD ETF 1.0 VULEU2A VULCAN VALUE EQUITY FUND 1.9 INTERNATIONAL BONDS 1.9 BKLN.US POWERSHARES SENIOR LOAN PORTFOLIO ETF 0.9 HYVBEUI SPARINVEST HIGH YIELD VALUE BOND 09/17 FUND EUR 1.0 GLOBAL TACTICAL ASSET 1.3 EPISODA M&G EPISODE INC FUND 1.0 EPISODU M&G EPISODE MACRO FUND 0.4 FOREIGN CASH 2.0 CASH 2.0 CASH 2.0 CASH 2.0 EU1 EUROPEAN EURO 0.0 GBP UK POUND STERLING 0.0 USD US DOLLAR 2.0 TOTAL Prudential Life Global Balanced Fund (PLGLOBAL) 18

20 Head of Institutional Business: Valdon Theron Tel: Fax: Cape Town Physical Address: 7th Floor, Protea Place 40 Dreyer Street, Claremont, 7708 Postal Address: PO Box 44813, Claremont, 7735 Johannesburg Physical Address: The Zone2, Loft Offices East, 2nd Floor, 31 Tyrwhitt Avenue, Rosebank, 2196 Postal Address: PO Box 963, Saxonwold, 2132 This document is for information purposes only and is not an offer to or solicitation for investors to invest in any of capabilities or products offered by Prudential Investment Managers (South Africa) (Pty) Ltd [PIMSA] (Registration no. 2013/051515/07) or any of its associates, being Prudential Portfolio Managers (South Africa) Life (Pty) Ltd (Registration no 2008/013338/06) and Prudential Portfolio Managers Unit Trusts Ltd (Registration no 1999/05242/06). PIMSA is an authorised discretionary financial services provider. Segregated investment portfolios are market-linked and no guarantees are given. The life policy product portfolios are managed by Prudential Investment Managers (South Africa) (Pty) Ltd. Investments are via a pooled market linked policy of insurance issued by Prudential Portfolio Managers (South Africa) Life (Pty) Ltd, which is a registered Long Term Insurer (linked policies only). The terms and conditions of investment and fees and costs are described in the relevant product documents and policy contracts. No guarantees are given. Market fluctuations, changes in rates of exchange or taxation and market trading costs may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. Fund performances for segregated clients are calculated by Asset Arena Performance (Xamin) and for life clients by CompleteLink. Each capability or product has specific terms and conditions for investment as well as differing fees and disclosure requirements. General market performance data may have been provided for illustrative and explanatory purposes. Information in this report has been obtained from, or based upon, sources believed to be accurate but Prudential makes no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. This information is not intended to constitute the basis for any specific investment decision. Investors are advised to familiarize themselves with the unique risks pertaining to their investment choices and should seek the advice of a properly qualified financial consultant / advisor before investing.