Global Leaders portfolio strategy

The GLP will comprise of 30-50 high conviction holdings. Stocks are selected using a “bottom-up” approach where the individual long-term attractiveness of an investment will be prioritised over geographic domicile.

The GLP is based on ideas generated by W&I’s in-house research department, which is focused on developed world equity markets. This gives access to the majority of leading global business franchises, while also offering the protection of developed world-standard corporate governance.

Within certain approved ranges, sector and regional allocation will be influenced by W&I’s global economic strategy.

Additionally, a common-sense safety net analysis will be applied to avoid over-concentration in any one sector or theme.

As noted, it is envisaged that the turnover of the GLP will be low, which is consistent with the long-term investment horizon of the service (five years or more).

The GLP is managed by the GLP Investment Committee, whose membership is comprised of our most experienced international investment managers and research analysts from W&I based in the UK and SA.

The GLP process prioritises stock selection, sizing investments with primary reference to global sector exposure. Geographical exposure is monitored as an additional, but subsidiary risk check.

Under normal market conditions the GLP is fully invested (excluding a residual cash balance to cover fees). The GLP Investment Committee can raise the cash weighting under volatile market conditions.

Having first screened approximately 1,000 developed market companies, each with a market capitalisation of more than $10 billion, looking for investments that satisfy our quality, growth and value criteria, the GLP Investment Committee chooses its investments from the universe of approximately 300 stocks actively monitored by W&I’s in-house equity analyst team.

The analysts follow a fundamental research process, where a thorough understanding of the business and its drivers is a pre-requisite to recommending investment. In pursuit of this understanding, they meet with the management teams of target companies whenever possible and also with research experts from our stock-broking counterparties. They also use a wide range of quantitative analytical tools and systems to identify the value and sustainability of value that our target investments have generated. As a result, the team produces a preferred list of approximately 100 equity investments.

The GLP Investment Committee then decides, from the preferred list of investments, which ones qualify as Global Leaders and constructs a portfolio from the most attractive amongst them.

The reference currency of the GLP is US dollars. Our strategic policy is to not hedge any foreign currency exposure from stocks not quoted in US dollars.

The GLP strategy exclusively invests in equities that are among the highest risk assets, carrying a high degree of volatility even when held in a diversified portfolio. Associated with this is a greater risk of capital loss, especially if you unexpectedly need to sell at a time when the markets or the economic cycle are performing poorly. On the up-side, equities have the potential to yield the highest investment returns over time. Unlike fixed income, equities are also likely to offer some protection of purchasing power in the event that inflation accelerates.

The right investment strategy balances your circumstances with the potential risks and returns.Whatever your investment objective, subject to your capacity to withstand losses, the greater the return you seek, the more risk you must be prepared to take.

Your portfolio is a discretionary managed segregated portfolio of stocks tightly aligned to the GLP. The day-to-day management and activity of your portfolio is undertaken by a dedicated implementation team, with feedback provided to you by your investment manager. The dedicated team will continually align your portfolio to the GLP as agreed by the GLP Investment Committee.If you wish to invest on a bespoke basis, please contact your investment manager to discuss alternative services offered by W&I.

At the inception of your portfolio, the dedicated team will begin investing on a discretionary management basis to bring your portfolio in line with the GLP. The timeframe for us investing new client monies into the GLP will be based upon prevailing market conditions and W&I’s investment outlook at the time.

Once your portfolio is fully invested, any changes to the GLP will be implemented by the dedicated team under the guidance issued by the GLP Investment Committee for implementation.

Your investment manager’s role is to review your personal circumstances and financial objectives, at least annually, to make sure that this strategy remains suitable for your overall investment strategy. Please advise your investment manager of any change in your circumstances as soon as possible.

Your investment manager is also responsible for providing you with regular updates on the performance of the portfolio and the stocks within. Your investment manager is available for consultation at any time.

An annual ‘all-inclusive’ fee charged for this strategy is calculated on the value of your portfolio as follows:

• 1.50% on the first $1 million
• 1.25% thereafter

(Subject to a minimum annual fee of $3,000)

The fee is subject to South African Value Added Tax (VAT) of 14%, which will be included in the total fee at the time of calculating the fee amount.

This annual fee covers the discretionary management, dealing, custody and reporting services. Fees will be calculated and charged quarterly in arrears at the end of February, May, August and November, and will be charged pro rata for any part period of the quarter.

This service is being offered through Investec Wealth & Investment, a division of Investec Securities (Proprietary) Limited (1972/008905/07).

An authorised financial services provider, No. 15886.A registered credit provider registration number NCRCP262.Registered Office: 100 Grayston Drive, Sandown, Sandton, 2196, South Africa.

Although information has been obtained from sources believed to be reliable, Investec Securities (Proprietary) Limited or its affiliates and/or subsidiaries (collectively “ISL”) does not warrant its completeness or accuracy, as it may not have been independently verified and no guarantees, representations or warranties are made as to its accuracy, completeness or suitability for any purpose. Opinions and estimates represent ISL’s view at the time of distributing this document and are subject to change without notice. Past performance is not indicative of future returns. Target returns are not guaranteed. The information contained herein is for information purposes only and readers should not rely on such information as advice in relation to a specific issue without taking financial, banking, investment or other professional advice. ISL and/or its employees may hold a position in any securities or financial instruments mentioned herein. ISL accepts no liability for any loss or damage of whatsoever nature including, but not limited to, loss of profits, goodwill or any type of financial or other pecuniary or direct or special indirect or consequential loss howsoever arising whether in negligence or for breach of contract or other duty as a result of use of or reliance on the information contained in this document, whether authorized or not. The value of investments and any income from the investment is not guaranteed and may go down as well as up; you may get less than the amount invested. Higher volatility investments are subject to sudden and large falls in value and could result in experiencing difficulty in realizing the investment or in obtaining reliable information on the value or associated risks. Changes in rates of exchange may have an adverse effect on the value, price or income of investments denominated in various currencies. Any references to the impact of taxation are made in the context of current legislation and may not be valid should levels/ and or bases of taxation change. ISL does not provide tax advice and nothing herein should be construed as such. Accordingly, you should seek advice based on your particular circumstances from an independent tax advisor. This material is for the use of intended recipients only and is not directed at you if ISL is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. In particular, this document and the investments referred to in this document are not available to investors who are US persons, as defined per US tax legislation. This document may not be reproduced in whole or in part or copies circulated without the prior written consent of ISL.