Africa Frontiers Strategy

INSTITUTIONAL

INVESTMENT OBJECTIVE:

The Coronation African Frontiers Strategy aims to maximise the long-term risk-adjusted returns available from investments on the continent through capital growth of the underlying stocks selected. It is a flexible portfolio primarily invested in listed African equities or stocks listed on developed and emerging market exchanges where a substantial part of their earnings are derived from the African continent. The Strategy may hold cash and interest bearing assets where appropriate.


Coronation is a long-term, valuation-driven investment house, focused on bottom-up stock picking. Our aim is to identify mispriced assets trading at discounts to their long-term business value (fair value) through extensive proprietary research. In calculating fair values, through our fundamental research, we focus on through-the-cycle normalised earnings and/or free cash flows using a long-term time horizon. The Portfolio is constructed on a cleanslate basis based on the relative risk-adjusted upside to fair value of each underlying security. The Portfolio is constructed with no reference to a benchmark. We do not equate risk with tracking error, or divergence from a benchmark, but rather with a permanent loss of capital.

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The above graph is provided for illustrative purposes only. It reflects composite performance of the strategy and is gross of fees.

CUMULATIVE PERFORMANCE
1 MONTH 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
Strategy (2.7)% (15.8)% (0.7)% (4.5)% 7.3%
Benchmark* 0.2% 2.6% 5.8% 1.3% 0.9%
Difference (2.8)% (18.4)% (6.5)% (5.8)% 6.4%
CALENDAR YEAR PERFORMANCE
YEAR TO DATE 2018 2017 2016 2015
Strategy (12.0)% (0.1)% 36.9% (4.9)% (24.6)%
Benchmark* 1.5% 2.4% 1.3% 0.8% 0.3%
Difference (13.5)% (2.5)% 35.6% (5.6)% (24.9)%

* ICE LIBOR USD 3 Month (US0003M Index)

The performance shown is gross of fees. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. The volatility of the ICE LIBOR USD 3 Month (US0003M Index) represented above may be materially different from that of the Africa Frontiers Strategy. In addition, the holdings in the accounts comprising the Strategy may differ significantly from the securities or components that comprise the ICE LIBOR USD 3 Month (US0003M Index). The ICE LIBOR USD 3 Month (US0003M Index) has not been selected to represent an appropriate benchmark to compare the Africa Frontiers Strategy's performance, but rather is disclosed to allow for comparison of the Strategy's performance to that of a well-known and widely recognized index.

CUMULATIVE PERFORMANCE
1 MONTH 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
Strategy - - - - -
Benchmark* 0.2% 2.6% 5.8% 1.3% 0.9%
Difference - - - - -
CALENDAR YEAR PERFORMANCE
YEAR TO DATE 2018 2017 2016 2015
Strategy (12.0)% (1.6)% 34.9% (6.3)% (26.0)%
Benchmark* 1.5% 2.4% 1.3% 0.8% 0.3%
Difference (14.3)% (4.0)% 33.6% (7.1)% (26.3)%

* ICE LIBOR USD 3 Month (US0003M Index)

The performance shown is net of fees. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. The volatility of the ICE LIBOR USD 3 Month (US0003M Index) represented above may be materially different from that of the Africa Frontiers Strategy. In addition, the holdings in the accounts comprising the Strategy may differ significantly from the securities or components that comprise the ICE LIBOR USD 3 Month (US0003M Index). The ICE LIBOR USD 3 Month (US0003M Index) has not been selected to represent an appropriate benchmark to compare the Africa Frontiers Strategy's performance, but rather is disclosed to allow for comparison of the Strategy's performance to that of a well-known and widely recognized index.