PENSION FUND PRESENTATION

Strategy & Evaluation

 THE QUESTION ISN'T AT WHAT AGE I WANT TO RETIRE, IT'S AT WHAT INCOME '

INVESTMENT POLICY
Objective
Our main objective is to make sure that we are able to pay our liabilities. Asset allocation decisions will therefore be based on the returns and risks relative to the liability essentially liability-driven investing (LDI)

Strategy
Strategic allocation of the Fund across the two broadly -defined financial asset classes will be the most significant determinant of long -term investment returns and asset value stability. These asset classes are equity (domestic and international), fixed income . The Committee expects that the equity asset class will be the highest returning asset class over the long-term investment horizon for which the Plan is anticipated to operate. The Committee therefore recognizes the need to commit a portion of assets to equity investments in pursuit of the Plans return objectives The investment vehicles used will be index funds, based on the investment basket we have Focused on managing funding level risk rather than just asset risk = tailoring our bond portfolio so that it matches the nature of the liabilities considering our Defined Benefit Plan.

Constraints
Liquidity Investment Basket Sterling Exposure (Liability) Portfolio risk should be below the composite benchmark risk

FIRST PERIOD ASSET ALLOCATION

Strategic Asset Allocation Tactical Asset Allocation
17% 47.5 52.5 16%

US U.K. Bonds Equities

17%

UK GR

SA
50%

Risk/Return Profile
Average Return (Annualized) Volatility (Annualized) Beta (Country Benchmark) Beta (World Benchmark)

MSCI World 4.82% 16.48% N/A 1.00

10yr UK Gilts 3.12% 7.46% -0.13 -0.12

RUSSELL 3000 5.03% 15.88% 1.00 0.93

FTSE AllShare 3.86% 14.85% 1.00 0.81

Xetra DAX 6.48% 22.37% 1.00 1.14

JSE AllShare 13.60% 17.37% 1.00 0.74

PERIOD 2 REBALANCING STRATEGY

ASSET ALLOCATION SECOND PERIOD

Asset Allocation Risk/Return Analysis

EVALUATION
Performance Evaluation
Period 1 Portfolio Risk Return Period 2 Portfolio Risk Return Benchmark Risk Return Benchmark Risk Return
0.122

7.80% 2.56%

12.20% -10.55%

-0.1055

Benchmark Portfolio
0.078

0.0256 0 0.1 Return 0.2

9.08% 4.86%

12.87% 3.84%

-0.2

-0.1 Risk

WE DID PERFORM WELL

PMVFHA

Benchmark*

Performance Evaluation
Period 1

Risk
Return Period 2 Risk Return

7.8%
-2.56%

< >

Risk

12.20%

Return

-10.55%

9.08% 4.86%

< >

Risk Return

12.87% 3.84%