2020 INTEGRATED REPORT

PROFESSIONAL PROVIDENT SOCIETY INVESTMENTS PROPRIETARY LIMITED (CONTINUED) In addition, if they hold other qualifying products from PPS’s subsidiary and affiliate companies, they will earn allocations from the PPS Profit-Share Cross- Holdings Booster. Our customised savings and investment solutions enable our members to save for specific goals (in some cases tax-free) and to create wealth through investment in our multi-manager portfolio of funds. We also offer a range of retirement solutions to ensure that members can enjoy a comfortable retirement after a lifetime of work. PERFORMANCE Despite the challenges presented by events in 2020, PPSI had an exceptional year, recording a 25% increase in profit. More specifically, gross inflows increased by 22% to R7.45 billion, while total assets under administration increased from R37.8 billion to R43.1 billion. The number of investors also increased by 13% to 52 230. More specifically, the PPS Multi-Manager portfolios delivered relatively strong returns in 2020, with the PPS Equity Fund outperforming its SWIX (capped) benchmark by more than 9%. The recently launched PPS Global Equity Fund also outperformed the MSCI AC World Index by more than 15% in its first year. While boosting shorter-term returns, medium- term returns against inflation remain challenging for several portfolios given the subdued performance of South African equities in particular. Portfolios with meaningful exposure to the South African resources sector and global technology shares nevertheless performed strongly in 2020. Both PPS and PPSI were fortunate to be invested with asset managers that had solid exposure in both these sectors. Other notable developments include being awarded a 4 star Morningstar rating for the PPS Equity Fund and the top decile performance of the PPS Managed Fund in both 2019 and 2020. All PPS funds with Morningstar ratings are now rated as either 3 star or 4 star. Multi-managed and partnership funds Morningstar rating PPS Global Balanced Fund of Funds **** PPS Moderate Fund of Funds **** PPS Conservative Fund of Funds **** PPS Enhanced Yield Fund **** PPS Equity Fund **** PPS Worldwide Flexible Fund of Funds *** PPS Balanced Fund of Funds *** PPS Flexible Income Fund *** PPS Balanced Index Tracker Fund *** PPS Global Equity Fund N/R PPS Managed Fund N/R PPS Stable Growth Fund N/R PPS Defensive Fund N/R Our positive performance was due to growth in the number of clients, new inflows, a decrease in operating costs and, not least, to sound investment decisions. Due to our longer-term focus, we remained invested throughout the periods of volatility during the year, which allowed our appointed asset managers to benefit from the market disruptions. At macroeconomic level, financial markets in general recovered significantly from the instability caused by the pandemic. This was boosted by unprecedented financial interventions and monetary stimulus from global authorities in the first half of the year, and by the announcement of promising developments with regards to a vaccine in the fourth quarter. On the home front, the two sovereign rating downgrades in the first half of the year had been widely anticipated and, while they did reflect the country’s deteriorated fiscal position, government buffered their impact by debt trading at higher yields. In our multi-managed portfolios, we were able to use ABOUT PPS INVESTMENTS PPS Investments (PPSI) provides customised savings, investment and retirement solutions for PPS members, who are assured of the very highest standards of investment management. Members who hold qualifying life products from PPS can earn additional Profit-Share when they take up PPSI products. 58 | PPS INTEGRATED REPORT 2020