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2 July 2021

Dear client

I have noticed that one of our clients is busy moving one of his living annuities and voluntary contribution investments that is currently in our Kanaan BCI Balanced FoF on the AIMS platform of ABSA to Allan Grey, which is not a bad company, but I do not know how well-qualified the FA (Financial Advisor) is that is advising him to do so, because the timing is not good as we have strategically switched 25% of all our Kanaan BCI Balanced FoF portfolios, only a few months ago, to a few of the very best locally registered offshore funds, namely Old Mutual Global, MiPlan, Blue Alpha and Sygnia because of the tremendous potential of these funds as vaccinations are reaching its final stage in the first world countries where one of the US States, namely New York, does not prescribe masks anymore.

Your mandatory investment as a living annuity or a RA and/or your voluntary investments are not necessarily on the AIMS platform of ABSA. We have many clients whose investments in our Kanaan BCI Balanced FoF are also on the platforms of PSG and Momentum, but the underlying funds are the same.

Below you will see that all of them have CARs (Cumulative average rate of returns) of more than 16%, which Sygnia of a fantastic 26.66% and all of them have grown right in the face of COVID-19 during 2020, with more than 20% except for Old Mutual Global that has grown 19.24%.

Above you will notice that all of them, including Blue Alpha which has a CAR of 17.16%, and has grown 25.14% during COVID-19 in 2020, has taken a knock in May. Blue Alpha with-5.2%, MiPlan came down with -4.08%, Sygnia even worse with -7.57%. It is therefore very unwise and unprofessional of a financial advisor to advise you to make the withdrawal now. All of them are busy making a comeback as you can see. For June Blue Alpha has grown with 7.52%, YTD end June now 11.73%. MiPlan has grown with 5.27% for the month of June and Sygnia with 7%, and YTD 11.54% to the end of June. Therefore your living annuities in our Kanaan BCI Balanced FoF has grown for June, net of all fees, with 1.82%. Note that it is not the average of the above-mentioned four funds for June as they represent only 25% of our Kanaan BCI Balanced FoF. The balance of 75% is not allowed to be invested in locally registered offshore funds according to regulation 28 of the Pension Fund Act and therefore the 75% is invested in Stable funds like BCI Income, Old Mutual Income and Fairtree Flexible of which their CARs (cumulative average rate of return since inception) are more than 9% except for Old Mutual Income with a good CAR of 7.8%. All of them do have STDs (standard deviation or mathematical measurement of volatility) of less than 1.8% with all of them YTD (year to date), more than 3.5%, except for Old Mutual Income which is now at 1.38%.

Friendly greetings,

Andries van Tonder

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