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February 2013

Sector Allocation

Equally Weighted Top40 Exchange Traded Fund


Bringing balance to your portfolio in one easy step
The Nedbank BettaBeta Equally Weighted Top40 Exchange Traded Fund (BBEWT40 ETF) tracks the BettaBeta Equally Weighted Top40 Index, calculated independently by the FTSE/JSE. This index is comprised of the same companies as the FTSE/JSE Top40 index (the large cap equity index of the JSE Securities Exchange), but they are held in equal proportions of 2.5% each (as at the quarterly rebalancing date). The index is rebalanced in line with the quarterly review of the FTSE/JSE Africa Index Series and underlying constituents mirror the changes in the FTSE/JSE Top40 Index. Institutional investors looking for liquidity and diversification compared to the domestic equity market (Botswana) can invest in this ETF as it has Local Asset Status, and Individual Investors wanting a balanced lower risk equity investment will find this equally suitable. Note: all performance data in this fact sheet is in Pula (BWP) terms, unless specified otherwise.

Market commentary
Inner circle: Market cap weighted Outer circle: Equally weighted Key Information Share code BBET40 (JSE) BettaBeta (BSE) Sector Exchange Traded Funds Benchmark FTSE/JSE Africa Equally Weighted Top40 Index Risk L LM Medium to high (MH) M MH H

The strong start to the year in developed market equities continued in February as several markets toyed with life-time highs. The Nikkei continued to lead the pack with another 3.8% gain for the month. But performance intra-month was quite volatile as investors try to pre-empt the end of QE. Emerging markets by contrast, stumbled somewhat as the CRB index declined by 3.6%. The spot price of Gold lost 4.6%, the biggest decline in more than a year. Politics was relatively high on the agenda in Europe, where investors are looking at election results as a gauge of the (lack of) acceptance of austerity. Despite a plethora of negative news stories about South Africa, foreign investors were net buyers of the domestic equity market to the tune of R8.1bn, the biggest monthly number since Nov-2010! It was further supported by another R3.8bn inflow into the domestic bond market. The inflows were supportive of the Rand it strengthened by an estimated 1.3% on a tradeweighted basis. But this strength would have not have been noted by those that only monitor the R/$ rate, as the greenback strengthened significantly against both the Pound (by 4.4%) and the Euro (by 3.8%). Both the FTSE/JSE Top40 index and the Equally weighted Top40 (ETOP) index declined by 2.4% in February. It is not surprising to see both the best and worst performing Top40 share list dominated by stock-specific, results-related stories, as February is reporting season on the JSE. On the upside: Bidvest (BVT, 11.3%), Growthpoint (GRT, 8.6%), Mondi (MNP, 7.8%; MND, 7.4%), Imperial (IPL, 6.2%) and Remgro (REM, 4.1%) and on the downside, Assore (ASR, 24.2%), Implats (IMP, -14.4%), Goldfields (GFI, -13.8%), Anglogold-Ashanti (ANG, -11.5%) and Intu Property (ITU, -10.8%) formerly known as Capital Shops (CSO).

Management fees Maximum 0.30% (incl. in TER) Total expense ratio (TER) 0.39% p.a. Income distribution Quarterly in March, June, September and December Liquidity Daily

Historical performance indexed to 1000 at 31-Dec-02

Contact us Lyn Brooks LynBrooks@NedbankCapital.co.za +27 11 294 4747 Nerina Visser NVisser@NedbankCapital.co.za +27 11 294 3217 Nedgroup Beta Solutions BetaSolutions@nedbank.co.za www.bettabeta.co.za

10 largest companies in TOPI by free float market capitalisation comparative weights of different indices (%)

Company BIL BHP Billiton SAB SABMiller CFR Richemont AGL Anglo American MTN MTN Group SOL Sasol NPN Naspers SBK Standard Bank Group FSR Firstrand Limited OML Old Mutual

BBEWT40 (ETOP) 2.5 2.8 2.7 2.5 2.4 2.6 2.7 2.4 2.6 2.6

Top40 (TOPI) 13.5 11.3 7.9 7.8 6.8 5.1 4.9 3.8 2.8 2.7

CAPI40 (CTOP) 10.0 10.7 8.4 8.2 7.1 5.4 5.1 4.0 2.9 2.8

SWIX40 (DTOP) 6.3 3.5 3.7 4.9 10.6 6.0 5.7 6.0 4.4 2.1

Return and risk metrics for different Top40-based indices since Dec-02 (p.a.) BBEWT40 Top40 CAPI40 SWIX40 Total return (%) 23.3 22.5 23.3 22.9 Risk (%) 22.3 25.6 24.3 24.6 Risk-adjusted return 1.05 0.88 0.96 0.93 The role of investment banks as ETF issuers
Capitalising on the major trend of the separation of alpha and beta fund management, investment banks, due to their superior structuring and trading skills, are successfully entering passive fund management, including ETFs. The major cost advantage of ETFs over competing products also makes this one of the most attractive growth areas over the next decade in the investment industry. In addition, the development of the ETF industry internationally offers an excellent template of the dynamics and opportunity set for the domestic market. The research, structuring and trading skill set of investment banks, combined with their ability to develop value-adding trading/derivative products on the back of ETFs, places them at a significant advantage to traditional fund managers to develop beta fund management profitably.

About Bettaeta Bettaeta is a range of beta building


block portfolios and funds offered by Beta Solutions in the Nedbank Capital Global Markets division. Our close affiliation to the Nedbank Group enhances our end-to-end operational abilities and allows us to leverage off the group synergies and reputation. We distinguish ourselves from our peers by the utilisation of a combination of existing and customised beta building blocks to derive lasting solutions for our clients. As a result we have a transparent and rules based passive fund management style. A combination of allocation to these products together with true alpha strategies allows for a significant level of tactical asset allocation possibilities for our clients.

Sector allocation

Pricing structure of portfolio


The Manager is entitled to charge certain fees calculated as a percentage of the assets under management. The manager is permitted to charge both an upfront fee in connection with the expenditure incurred and administration performed by it in respect of the creation, issue and sale of securities, as well as an exit fee in connection with the expenditure incurred and administration performed by it in respect of the repurchase of securities. Such fees will be expressed as a percentage of the consideration received from an investor and charged on a sliding scale dependent on the size of the investment. The upfront fee will not exceed 50 bps and the exit fee will not exceed 100 bps. The Manager may choose at any stage to waive some or all of the upfront fees, exit fees and/or management fees charged in respect of an investment in the BettaBeta Collective Investment Scheme. As with all ETFs, all taxes, duties, administration, transaction and custody charges and brokerage fees will be for the investors account. These on-going costs are expected to result in a total expense ratio of not more than 50 bps p.a. (currently 39 bps).

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