Dear Client
1. See below
your updated investment summary report.

2. We
mentioned previously that the administrator SANNE we make use of for our South
African Hedge Fund of Fund, is not permitted to buy offshore hedge funds which
are performing much better, and as we are allowed to switch to another
administrator via whom we are permitted to buy offshore hedge funds, we have in
fact already given SANNE notice accordingly.
Please take note of the important reasons why we are switching over from
SANNE to International Assurance LTD, if you do not have enough time read at
least par 17 to 19.
3. Your
investments in Moriah Global Fund of Hedge Fund have grown in USD for the month
of August with 3.82%% and YTD (Year to Date), 19.05%. In ZAR it was 9.97% and
YTD was 26.05%. The CAR (Compound Annual Return net of fees) in ZAR is now
14.48%, which is lower than the growth rate over the past 12 months.
4. The
reason for this is that we have become more experienced with quality,
successful hedge funds and because of this confidence, we have increased our
exposure to these funds over the past 12 months, to more than 70% and we trust
that the growth we have been seeing over the past 12 months is an indication of
future long term growth, we estimate it to be between 12% and 16% p/a.
5. As
mentioned previously, the fund managers of the underlying hedge funds of Moriah
Global have been proving to us over the years that they know what to do during
global market crashes and corrections.
6. Below you
will see that the KG Investment Fund with a CAR of 17.92%, has grown 17.92%
during the 2008 share market crash and 27.8% during 2009 (the year thereafter).
Global Sigma did not yet exist during the 1998 Far East Pacific Crash, but
Haidar Jupiter below, grew by 19.28% the year thereafter, and when world
markets crashed more than 30% during the IT Bubble Crash of 2000, you will
notice that this fund grew 45.98%.

7. Above
you will notice that in the case of Haidar Jupiter, under the YTD column that
the fund had in fact, a drawdown of -6% during the 2008 Credit Crunch Crash,
but the American market came down with more than 60% during that year, as was
the case with most other markets worldwide.
8. Above you
will notice that Haidar has grown 18.09% for the month of August alone, and is
now YTD standing at 46.5%. The KG Investment Fund has grown YTD with 22.06%.
Global Sigma has a YTD of much less, namely 5.9%, but it is still very good in
ZAR terms, for those who are drawing their ZAR pension from Moriah Global, or
intend to draw their income from Moriah Global. However, we are happy with
Global Sigma, because where KG has a STD (Standard Deviation or mathematical
equation of volatility) of 13%, Haidar has a STD of 16.02% and Global Sigma, a
very low STD of 5.31%. As you can see above, Global Sigma has grown with 15.3%
for 2018, when KG Investment Fund only grew with 3.3% and Haidar only 9.9%,
which gives good diversification.
9. To
compare the three best Hedge Funds in South Africa with the three best offshore
hedge funds as above, we have calculated on a spreadsheet the performance of
36One Hedge Fund, Fairtree Wild Fig Fund, and Peregrine Capital Growth, as you
can see below.

10. Above you
will notice the CAR (Cummulative Average Net of Cost Return since inception) of
36One, is 8.71%. The CAR of Fairtree only 8.56% and the CAR of Peregrine only
11.12% compared to the offshore Funds, KG Investments above with a CAR of
17.92%, Global Sigma with a CAR of 14.7% and Haidar Jupiter with a CAR of
19.36% in USD per annum.
Outside the jurisdiction of South Africa, it is much easier
for us to get long term growth, in hedge funds as well as growth funds/unit
trust funds.
11. As South
Africa is becoming more socialistic and less productive, regulations are
increasing in the financial services industry where our hedge fund of fund is
not allowed to buy offshore hedge fund of funds and is only allowed to buy 30%
of locally registered growth funds, which do not compete at all with the very
best offshore. Therefore, no fund of fund or hedge fund of fund registered in
South Africa, will be able to compete with a well-managed fund of fund outside
the jurisdiction of South Africa, for instance in Mauritius where we are making
use of the administrator, International Insurance LTD. In Mauritius where there
is much less regulation, we are allowed to buy any registered hedge fund in the
world, but also any registered growth fund as well as shares, because of which
we had the opportunity to buy some of the listed shares of the well-known
Warren Buffet.
12. According
to our research, the best locally registered offshore fund over the past few
years, has been Blue Alpha which has grown with 18.66% in USD after fees, up to
the second week of September (see below).

13. Above you
will notice that the best growth fund worldwide, according to our research,
which we have purchased for Moriah Global, is JP Morgan, which has grown YTD up
to the end of September 2019 with 43% after fees! More than two times better
than the best in South Africa, namely Blue Alpha above, with YTD only 18.66%.
14. As the
socio-political problems in South Africa are increasing, more and more clients
are transferring their voluntary contribution investments to our Moriah Global
FoF or to a combination of funds there that suites their risk profiles and
circumstances. See attached hereto the latest news concerning Zimbabwe
according to which their inflation rate of 67% a few months ago has now
increased to 300% p/a. ZAR/USD further
depreciated now to more than 15 ZAR/USD.
15. Another advantage of Mauritius, is that a client is
allowed to have his wife as a joint owner or whoever he prefers, because of
which the investments do not become part of a frozen estate (which can takes
years to unwind in South Africa these days) when he passes away. The further
benefit is that once the client starts to draw income at retirement, the growth
portion of the capital withdrawals will be seen as capital gains, of which only
35% will have to be declared, of which the client can distribute 50% to the
joint owner, which will cause both of them to get into a much lower tax
bracket.
16. I have
noticed that you have not made your son or daughter joint owner as yet and for
your convenience I have attached the necessary documents for both of you to
sign and email back to us if you would like to do this. You will stay in
control and can always change it in the future.
17. You may
recall that in South Africa we do not need permission to move from one
administrator to another administrator, if we feel that we can get a better
service from the next administrator. You may recall that we moved from Oak
Advisory Services to SANNE a few years ago in the case of our Hedge Fund of
Fund. As SANNE is limited to South African Funds, we have already given SANNE
notice of our intention to move to International Insurance LTD, because of
which we are now switching all the underlying South African Hedge Funds to cash
so as to be able to convert that to USD.
18. As you are
not allowed to purchase USD denominated hedge funds with ZAR, you must first
open a USD account at your bank so as to be able to convert your ZAR to USD,
but we advise against that as the local banks (according to our experience over
the years), without exception, will charge you a margin, which is the
difference between the bid and the offer price of the available USD of up to 5%
and even up to 7%, although they say they do not charge anything. However, you
will only be able to see that they have charged you if you have a forex trading
program on your laptop, which shows the price movement every second. We
therefore decided years ago, to enter into a contract with an agent of Investec
Bank concerning the margin the bank charges, but lately we prefer the agent
Exchange for Free of RMB, which charges 0.6% and for amounts over R1 million, only
0,4%.
19. Please
send us your proof of address not older than 6 months and TAX nr so that we can
send you the required documents to open an Exchange4free USD account with
Mercantile Bank.
Friendly Greetings
Andre