Returns to Sectors & Style Does sector adjustment matter? China to end April 2011

Sector & Style Investing Sectors selection can add returns Style can add different returns Important to distinguish between both factors – Possible to collect returns from both Style returns can be more stable than sector returns

Approach Use Style Research’s Market Analyzer Benchmark = market – All stocks with market cap of USD 100 million Build Portfolio based on Sector or Style Rebalanced every 6 months – Repriced every month – Includes dividends

WHAT HAVE SECTORS DONE RECENTLY? Sector returns

Returns to Sectors – last 5 years

Health Care Value: - Growth: +/- Size: Small Momemtum : Low Debt: Low Sales: Domestic Quality: +/-

Consumer Goods Value: - Growth: +/- Size: Large Momemtum : - Debt: Low Sales: Domestic Quality: -

Basic Materials Value: - Growth: - Size: Small Momemtum : + Debt: Low Sales: Domestic Quality: -

Technology Value: - Growth: -/+ Size: Small Momemtum : + Debt: Low Sales: Foreign Quality: -/+

Consumer Services Value: - Growth: - Size: Small Momemtum : - Debt: b’mark Sales: b’mark Quality: -

Returns to Sectors – last 5 years

Industrial Value: - Growth: +/- Size: Small Momemtum : low Debt: low Sales: Foreign Quality: -

Financials Value: +/- Growth: +/- Size: Large Momemtum : + Debt: High Sales: Domestic Quality: +

Utilities Clean

Oil & Gas Value: + Growth: +/- Size: Large Momemtum : nil Debt: Low Sales: Foreign Quality: +

Telecom Value: + Growth: - Size: Large Momemtum : nil Debt: Low Sales: Quality: +

Sector Returns 1 Year XS Return - % pa5 year XS Return - % pa Health Care Consumer Goods Basic Materials Technology Consumer Services Industrials Financials Utilities Oil & Gas Telecommunications

WHAT HAS STYLE DONE RECENTLY? Style returns including and excluding sector returns

Value – last 5 years

Book to Price

Last 5 Years SECTOR ADJUSTED - Last 5 Years

Dividend Yield

Last 5 YearsLast 5 Years - SA

Earnings Yield

Last 5 YearsLast 5 Years - SA

Cashflow Yield

Last 5 YearsLast 5 Years - SA

Sales to Price

Last 5 YearsLast 5 Years - SA

EBITDA to Price

Last 5 YearsLast 5 Years - SA

Growth – last 5 years

Return on Equity Last 5 YearsLast 5 Years - SA

Growth in Earnings per Share Last 5 Years Last 5 Years - SA

Income to Sales Last 5 YearsLast 5 Years - SA

Sales Growth Last 5 YearsLast 5 Years - SA

Forecast Earnings Last 5 YearsLast 5 Years - SA

Forecast Earnings Revisions Last 5 YearsLast 5 Years - SA

Other – last 5 years

Market Cap Last 5 YearsLast 5 Years - SA

Beta Last 5 YearsLast 5 Years - SA

Price Momentum – 6 months Last 5 YearsLast 5 Years - SA

Price Momentum – 12 months Last 5 YearsLast 5 Years - SA

Quality – last 5 years

Low Accrual Last 5 YearsLast 5 Years - SA

Debt to Equity Last 5 YearsLast 5 Years - SA

Stability of Earnings Growth Last 5 YearsLast 5 Years - SA

Sustainable Growth Rate Last 5 YearsLast 5 Years - SA

Stability of Sales Growth Last 5 YearsLast 5 Years - SA

Stability of Forecast Earnings Last 5 YearsLast 5 Years - SA

Returns to Sector + Style – last 5 years SA, annualised

Returns to Style – last 5 years Last 5 YearsSECTOR ADJUSTED Last 5 Year SA, annualised

Returns to Sector & Style

Value Last 5 YearsLast 5 Year - SA

Growth Last 5 YearsLast 5 Year - SA

Other Last 5 YearsLast 5 Year - SA

Quality Last 5 Years5 Year - SA

Sector & Style Investing Sectors selection can add returns Style can add different returns Important to distinguish between both factors – Possible to collect returns from both Style returns can be more stable than sector returns