Global Dividend Aristocrats Accessing Global Cash Cows

February 2018

Introduction

▪ CoreShares is a leading passive investment management business in South Africa with a particular focus on Smart Beta

▪ An approved manager of Collective Investment Schemes and an authorised Financial Services provider (Cat I & II)

▪ Full service set across ETFs, unit trusts and segregated mandates

▪ Products are utilised by multiple investor types from “self directed” individuals through to institutional clients. CoreShares has over 16 000 retail clients

▪ Committed to low cost products, innovation, transparent portfolio construction and accurate tracking

An Introduction to CoreShares

3

Shareholding

5

25% 25% 50%

GFS Holdings & Management

Yellowwoods

Going global Key drivers for going global

Investors’ key drivers for going global

6

• Maintain global purchasing power by owning global growth assets that are robust enough to survive through downturns

Protect & Grow Wealth

• Investing in SA only significantly limits your opportunity set

Access to Global Leaders

• Due to structural and behavioural factors most investors are heavily overweight South AfricaDiversify

Diversify: Overexposure to SA?

• Home bias is the behavioural trend where investors tend to hold the majority of their portfolio in local investments, ignoring the benefits of diversifying into global investments

• Overexposure is also structural in nature eg. Reg 28, Home ownership, Business ownership

7

USA 9%

Australia 2.5%

Japan 0%

Germany 3.5%UK 5%

France 2%

China 0%

Hong Kong 0%

South Africa 78%

Example: This is what home bias looks like

8

Diversify: SA in context of global opportunity set

USA 50.6%

Australia 2.3%

Japan 7.6%

Germany 3.2%UK 5.2%

France 3.4%

China 4.01%

Hong Kong 0.73%

South Africa 0.79%

Source: MSCI and iShares

South Africa < 1% of the Global Markets

SA returns in the context of Global Equity Returns

Protect And Grow: Maintain global purchasing power

9

0

50

100

150

200

250

300

Dec

01

, 20

07

Mar

01

, 20

08

Jun

01

, 20

08

Sep

01

, 20

08

Dec

01

, 20

08

Mar

01

, 20

09

Jun

01

, 20

09

Sep

01

, 20

09

Dec

01

, 20

09

Mar

01

, 20

10

Jun

01

, 20

10

Sep

01

, 20

10

Dec

01

, 20

10

Mar

01

, 20

11

Jun

01

, 20

11

Sep

01

, 20

11

Dec

01

, 20

11

Mar

01

, 20

12

Jun

01

, 20

12

Sep

01

, 20

12

Dec

01

, 20

12

Mar

01

, 20

13

Jun

01

, 20

13

Sep

01

, 20

13

Dec

01

, 20

13

Mar

01

, 20

14

Jun

01

, 20

14

Sep

01

, 20

14

Dec

01

, 20

14

Mar

01

, 20

15

Jun

01

, 20

15

Sep

01

, 20

15

Dec

01

, 20

15

Mar

01

, 20

16

Jun

01

, 20

16

Sep

01

, 20

16

Dec

01

, 20

16

Mar

01

, 20

17

Jun

01

, 20

17

Sep

01

, 20

17

Dec

01

, 20

17

S&P South Africa (USD) MSCI World (USD) S&P South Africa (ZAR)

Source: S&P, Bloomberg, CoreShares

Access to Global Leaders: Global Opportunity Set (1)

10

0

500

1000

1500

2000

2500

3000

Global Opportunity Set South African Opportunity Set

1. Comparison of the number of MSCI ACWI Index Constituents (2499) and the S&P South Africa 50 Index Constituents (50)

Source: MSCI, S&P

Going GlobalAddressing the key drivers

Smart Beta: Creating the solution

12

Market return

Active management

Passive Smart Beta Active

• Low Cost • Transparent • Rules based

• Outcomes orientated

• Deeper diversification

• Better risk adjusted returns

Best of both worlds

▪ Smart Beta allows us to target a specific investor need and maintain the low cost, rules based and transparency of passive investing

13

Addressing diversification

USA 50.6%

Australia 2.3%

Japan 7.6%

Germany 3.2%UK 5.2%

France 3.4%

China 4.01%

Hong Kong 0.73%

South Africa 0.79%

Source: MSCI and iShares

Keep a country neutral approach

▪ An investment in a Dividend Aristocrats® strategy is a way of accessing quality companies

▪ Dividend Aristocrats® is an S&P Dow Jones Index series that selects companies based on their ability maintain to grow dividends annually without falter

▪ Only best in class companies qualify for the Dividend Aristocrats® Index Series

▪ CoreShares is no stranger to Dividend Aristocrats, the local DIVTRX ETF has been running since April 2014 (265mn)

▪ As an Index series it has raised over ZAR 300bn, the success is based on the intuitive and timeless investing strategy

Addressing Protect & Grow and Access to global leaders

14

Designing S&P Global Dividend

Aristocrats®

A globally diversified index of indices

16

S&P Global Dividend Aristocrats Blend index

(Custom)

S&P 500 Dividend Aristocrats

S&P Europe 350 Dividend

Aristocrats

S&P/TSX Canadian Dividend

Aristocrats

S&P Pan Asia Dividend

Aristocrats

Region USA (50.1%) Europe (24.4%) Canada (3.3%) Pan Asia (22.2%)

Number of countries

1 12 1 10

Number of constituents

50 40 87 98

Qualification years

25 10 5 7

Weightingmethodology

Equal Equal Yield Yield

Source: S&P, CoreShares

Global Dividend Aristocrats® Strategy: The key benefits

17

.

• 275 constituents

• Effective share exposure of 145

• 24 countriesGlobal Diversification

• Equity returns with lower standard deviation (risk)

• Captures more upside (95%) than downside (80%)

Growth assets with defensive quality

• Robust Earnings and cash generative “cash cows”

• Financial strength and low debt levels

• Disciplined management more selective on growth projects

Global Quality Companies

S&P Global Dividend Aristocrats®

Blend index (Custom)

Historical track record (1)

19

R100

R200

R300

R400

R500

R600

R700

R800

R900

01

-De

c-0

4

01

-May

-05

01

-Oct

-05

01

-Mar

-06

01

-Au

g-0

6

01

-Jan

-07

01

-Ju

n-0

7

01

-No

v-0

7

01

-Ap

r-0

8

01

-Se

p-0

8

01

-Fe

b-0

9

01

-Ju

l-0

9

01

-De

c-0

9

01

-May

-10

01

-Oct

-10

01

-Mar

-11

01

-Au

g-1

1

01

-Jan

-12

01

-Ju

n-1

2

01

-No

v-1

2

01

-Ap

r-1

3

01

-Se

p-1

3

01

-Fe

b-1

4

01

-Ju

l-1

4

01

-De

c-1

4

01

-May

-15

01

-Oct

-15

01

-Mar

-16

01

-Au

g-1

6

01

-Jan

-17

01

-Ju

n-1

7

01

-No

v-1

7

Historical return - ZAR

S&P GloDiv Blend TR MSCI World TR

1. Returns until 31 December 2017, inception date 01 February 2005

Source: S&P, Bloomberg, CoreShares

Global Dividend Aristocrats vs. MSCI World (1)

20

Interest

Capital Gains

1. Annualised Total Returns in ZAR until 31 December 2017, inception date Feb 2005

01 Feb 2005 to 31 December 2017

S&P Global Dividend Aristocrats Blend index

(Custom)MSCI World

Return 16.5% 13.5%

Volatility 13.3% 13.8%

Sharpe ratio 1.13 0.88

Number of constituents 275 1678

Source: S&P, Bloomberg, CoreShares

Cumulative Returns vs. MSCI World

21

11.30%

12.50%

20.90%

15.90%16.50%

10.30%

11.80%

20.50%

11.40%

13.50%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

1 year 3 year 5 year 10 year Since Inc

S&P GloDiv Blend (ZAR) MSCI World (ZAR)

1. Annualised returns until 31 December 2017, inception date 01 February 2005

Source: S&P, Bloomberg, CoreShares

An equity strategy with downside protection

22

45.97

51.85

40.00

50.00

60.00

70.00

80.00

90.00

100.00

01

-Oct

-07

01

-No

v-0

7

01

-Dec

-07

01

-Jan

-08

01

-Fe

b-0

8

01

-Mar

-08

01

-Ap

r-0

8

01

-May

-08

01

-Ju

n-0

8

01

-Ju

l-0

8

01

-Au

g-0

8

01

-Se

p-0

8

01

-Oct

-08

01

-No

v-0

8

01

-Dec

-08

01

-Jan

-09

01

-Fe

b-0

9

MSCI World GloDiv Blend

-73%

92%

Capture ratios

Although still an equity strategy, it provides more protection on the downside relative to a global market cap weighed alternative

Global Financial Crisis

10.62% protection

Source: S&P, Bloomberg, CoreShares

23

Globally diversified country weighting

USA 53 %

Australia 4 %

Japan 7 %

UK 11 %

Europe 11 %

China 2 %

Pan Asia (1) 9 %

South Africa 0 %

1. Pan Asia = Pan Asia ex Japan, China and Australia

Source: S&P Dow Jones Indices

Canada 3 %

Weighting to less cyclical sectors

24Source: S&P, CoreShares

Weighting to less cyclical sectors

Source: S&P, CoreShares

▪ Consumer staples are essential products, such as food, beverages, tobacco and household items people are unable or unwilling to cut out of their budgets regardless of their financial situations

25

The “Cash Cows”

▪ Boston Consulting Group introduces the “cash cow” concept in 1970 as part of their growth share matrix

▪ A business which has a large market share in a mature market

The “Cash Cow” Concept

Star ?

Cash Cows Dogs

Relative Market SharesHigh (cash generation) Low

Mar

ket

Gro

wth

Rat

e Lo

w

(

cash

usa

ge)

H

igh

The Cream of the Crop (50 Years +)

Business Founding date

Market Cap (USD) Bln

Consecutive Annual Dividend

Increases

Sector

1837 219 61 years Consumer Staples

1902 149 59 Years Industrials

1885 189 55 years Consumer Staples

1806 65 54 Years Consumer Staples

1886 382 55 Years Health Care

Holdings: Regional split

29

USA Europe Pan Asia Canada

The S&P Global Dividend Aristocrats® Blend Index has 275 underlying companies. These companies are typically well regarded, quality brands with above-average global competitiveness.

Source: S&P, Bloomberg, CoreShares

Brief idea of security stretch

30

Salient details

31

Name CoreShares Global Dividend Aristocrats ETF [ZAE000254249]

Benchmark S&P Global Dividend Aristocrats Blend Index (Custom)

ASISA Category (ASISA) Global EQ General

Vehicle/Structure Exchange Traded Fund

Income treatment Distributing (semi-annual: June and December)

Replication method Physical replication

ITEM DATE

SENS announcement of approval of listing [Monday, 22 January]

Opening date of the initial offer at 09:00 on: [Tuesday, 23 January]

Closing date of the initial offer at 12:00 on: [Thursday, 15 February]

LAs issued: [Friday, 16 February]

Settlement of LA’s: [Friday, 16 February]

Ramp-up period in respect of cash subscriptions commences: [Friday, 16 February]

Ramp-up period in respect of cash subscriptions ends on or before 12:00 on: [Tuesday, 20 February]

Announcement of results, securities in issue and conversion ratio in respect of IPO before 11:00: [Wednesday, 21 February]

Listing of CoreShares Global DivTrax securities‡ from commencement of trading at 09:00 on: [Thursday, 22 February]

32

Gareth StobieManaging Director Telephone: +27 (0)11 459 1866Cell: 083 626 2268 Email: gareths@coreshares.co.za

General info@coreshares.co.zawww.coreshares.co.za

Chris RuleHead: Product and Client Solutions Telephone: +27 (0)11 459 1846Cell: 072 419 5176Email: chrisr@coreshares.co.za

Contacts

Appendix

34

Index Constituent selection

Market cap minimums Liquidity requirements Diversification

S&P 500 Dividend Aristocrats

>=25 yearsFloat-adjusted market cap of at least $3 billion

ADVT >= $5 million for the three months prior to rebalancing date per constituent

Minimum number of constituents: 40 (with additional sector diversification)

S&P Europe 350 Dividend Aristocrats

>=10 yearsFloat-adjusted market cap of at least $3 billion

ADVT >= $5 million for the six months prior to rebalancing date per constituent

Minimum number of constituents: 40

S&P/TSX Canadian Dividend Aristocrats

>=5 yearsFloat-adjusted market cap of at least 300 million CAD

Basket liquidity maximum weights applied at constituent level (weight determined by dividing 3-month ADVT by a basket limit amount of 100 million CAD)

Weight per constituent capped at 8%

S&P Pan Asia Dividend Aristocrats

>=7 yearsFloat-adjusted market cap of at least $1 billion

ADVT >= $3 million for the three months prior to rebalancing date per constituent

Weight per constituent capped at 5% Country, sector weights capped at 30%

The underlying indices: explained

Source: S&P, Bloomberg, CoreShares

Yield, P/E and fees

35

Index Yield

S&P 500 Dividend Aristocrats 2.42%

S&P Europe 350 Dividend Aristocrats 2.68%

S&P/TSX Canadian Dividend Aristocrats 4.71%

S&P Pan Asia Dividend Aristocrats 3.06%

S&P Global DivArist (Custom) 2.70%

S&P Global LargeMidCap 2.25%

MSCI World 2.29%

MSCI ACWI 2.28%

Fee type Fee

Asset management fee 0.350%

VAT on AM fee 0.049%

Other charges (audit, trustee and custody) 0.050%

Underlying TERs 0.144%

TOTAL EXPENSE RATIO 0.593%

Global Index PE (trailing)

MSCI World 21.59

S&P LargeMidCap 20.43

S&P Global DivArist 24.97

Universes of the underlying indices 21.09

S&P Global DivArist Blend* 20.47

Source: S&P, Bloomberg, CoreShares

Applying a Core-Satellite approach

36

S&P GloDiv Blend MSCI World Core-Satellite

Number of negative periods 0.0% 17.5% 1.0%

Number of positive periods 100% 82.5% 99.0%

Number of total periods 100% 100% 100%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

01

-Dec-0

9

01

-Jun

-10

01

-Dec-1

0

01

-Jun

-11

01

-Dec-1

1

01

-Jun

-12

01

-Dec-1

2

01

-Jun

-13

01

-Dec-1

3

01

-Jun

-14

01

-Dec-1

4

01

-Jun

-15

01

-Dec-1

5

01

-Jun

-16

01

-Dec-1

6

01

-Jun

-17

01

-Dec-1

7

Custom GloDIv MSCI World TR Core-Satellite

Source: S&P, Bloomberg, CoreShares

Applying a Core-Satellite approach: Sector Breakdown

37

When combining with a global market cap weighted strategy, the resultant sector weighting compliments reduce total sector concentration

Source: S&P, Bloomberg, CoreShares

Sector S&P GloDiv Blend MSCI World Core-Satellite

Consumer Discretionary 13.8% 12.2% 13.0%

Consumer Staples 21.2% 9.0% 15.1%

Energy 3.3% 6.3% 4.8%

Financials 9.3% 18.0% 13.7%

Health Care 13.6% 11.7% 12.7%

Industrials 16.3% 11.6% 13.9%

Information Technology 5.1% 16.7% 10.9%

Materials 6.2% 5.2% 5.7%

Real Estate 5.7% 3.1% 4.4%

Telecommunications 1.7% 3.1% 2.4%

Utilities 3.8% 3.0% 3.4%

38

Disclaimer

CoreShares Index Tracker Managers (RF) (Pty) Ltd (“the Manager”), Registration number 2006/006498/07, is a company incorporated inSouth Africa acting as a manager of collective investments schemes in securities in terms of Section 42 of the Collective InvestmentsSchemes Control Act and is supervised by the Financial Services Board. The Manager entered into a Representative Agreement with theIssuer (CoreShares Global Investments PCC) the terms of which in accordance of Section 65 of CISCA and makes the Manager responsiblefor, amongst other matters, the marketing and distribution of the Foreign Collective Investment scheme to South African Investors. TheManager therefore may be used as the primary contact point for the ETFs. The registered address of the Manager is 5 Arundel Close,Kingsmead Office Park, Durban, 4001. The Trustee and Custodian is Société Générale Johannesburg Branch. This document and any otherinformation supplied in connection with CoreShares is not “advice” as defined and/or contemplated in terms of the Financial Advisory andIntermediary Services Act and, therefore, investors are encouraged to obtain their own independent advice prior to buying participatoryinterests in CIS portfolios issued by the Manager. Collective Investment Schemes in Securities (CIS) are generally medium to long terminvestments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future.CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges is available on request fromthe company. Commission and incentives may be paid and if so, would be included in the overall costs. The portfolios track theperformance of a particular index and so outperformance of the index is not the objective and, therefore, there are no performance fees atall. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. Unlike traditional unittrusts, Exchange Traded Funds (ETFs) are Collective Investment Schemes in Securities (CIS) that trade on stock exchanges. Trading in ETFswill incur the normal costs associated with listed securities, including brokerage, settlement costs, Uncertified Securities Tax (UST), otherstatutory costs and administrative costs. The price at which ETFs trade on an Exchange may differ from the Net Asset Value pricepublished at the close of the trading day, because of intra-day price movements in the value of the constituent basket of securities. Theportfolio is valued on every business day at 17h00. The current price means the net asset value, which is the total market value of allassets in the portfolio including any income accruals and less any quantifiable and non-quantifiable deductions from the portfolio dividedby the number of participatory interests in issue. The Manager shall, wherever possible, avoid situations causing a conflict of interest.Where it is not possible to avoid such conflict, The Manager shall advise you of such conflict in writing at the earliest reasonableopportunity and shall mitigate the conflict of interest in accordance with its conflict of interest Management Policy. You may send a blankemail with a subject “conflict of interest” to the compliance officer, should you need a copy of this policy. Complaints should be directed tothe Compliance Officer. The Complaints Resolution Policy is available on request. The Compliance Officer’s email address iscompliance@coreshares.co.za.