Investec Emerging Markets Digital Plus

Presentation

February 2018

What is the Investec Emerging Markets Digital Plus Equity Structured Product (“ESP”)?

100% downside protected atmaturity in ZAR provided theETF does not close downmore than 30%.

The Digital Plus ESP is acredit linked ESP where theinvestor takes credit risk onboth Investec Bank Limited(“IBL”) and FirstRand Limited(“FSR”).

IBL is the product supplier,liquidity provider, issuer andmarket maker.

The ESP is a listed instrumenton the JSE and can bepurchased via a stockbrokingaccount using rand. Minimuminvestment amount is fromR50 000 cash and incrementsof R10 000.

A 3.5-year equity investment linked to theperformance of the iShare MSCI EmergingMarkets ETF (EEM US Equity). The returnwill be paid to the investor in randtherefore no currency risk.

Earn a minimum 35% digital return in ZARif the basket of ETFs go up by as little as0.1% at maturity, plus unlimited upsideabove 35%

Reference ETF: iShares MSCI Emerging Markets ETF (EMM US Equity)

Current ETF price: 31 January 2018 = 50.96

JSE code: SPIB22

Daily liquidity in normalmarket conditions. Investecmakes an active daily marketin the investment on the JSEwith a bid to mid-spread of 1%

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What is the pay-off profile at expiry in rand?

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

180%

60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180%

Return

iShare MSCI Emerging Markets

Emerging Markets Digital Plus

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What returns can investors expect?

* Theoretical returns for illustrative purposes

ETF Basket returns at maturity*

Initial Rand amount invested

Digital Plus ESP investment value at maturity

75% R100 000 R175 000

27% R100 000 R135 000

12% R100 000 R135 000

-21% R100 000 R100 000

-32% R100 000 R68 000

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Emerging Market commentary

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• Growth for both EMs and DMs is running at 3.6% yoy, We expect global growth of 4% for 2018• Global growth above 3.5% typically sees strong commodity price growth; we expect at least

10% over the next year• From 1996 EM equities have never underperformed DM equities over a calendar year that has

seen a rise in commodity prices• EM earnings growth has averaged 19% in years when global growth has been above 3.5% vs

0% in years when global growth has been below 3.5%. In addition EMs frequently rerate onlarge earnings growth

• The improving global backdrop has been reflected in record low EM CDS spreads. However,the 12m forward P/E that DMs trade at relative to EMs is near the highest since 2004. Westruggle to reconcile this and remain overweight EM equities vs DM

• This disconnect is particularly exaggerated in SA and we remain overweight EM nominalbonds and SA nominal bonds in particular, this should also provide some level of support forRand

• The improving global backdrop coupled with increased political stability will see growth tick upin SA even though business confidence currently remains near record lows

Source: Investec Bank Limited – Chris Holdsworth

iShare ETF return 2003 (inception) to 2018

6Data source: Bloomberg

iShare ETF country exposure as of January 12, 2018

Geographic exposure relates principally to the domicile of the issuers of the securities held in the product, added together and then expressed as a percentage of the product’s total holdings. However, in some instances it can reflect the country where the issuer of the securities carries out much of their business.

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Country% of Market Value

China 30.39%

Korea (South) 14.84%

Taiwan 11.06%

India 8.46%

Brazil 6.97%

South Africa 6.59%

Russian Federation 3.47%

Mexico 2.87%

Thailand 2.30%Malaysia 2.23%

Indonesia 2.18%

Poland 1.32%

Data source: iShares by BlackRock®

iShare ETF Top 10 companies

Data source: iShares by BlackRock® 8

Ticker Name Sector Country Weight (%)

700 TENCENT HOLDINGS LTD Information Technology China 5.70

005930 SAMSUNG ELECTRONICS LTD Information Technology Korea (South) 3.89

2330 TAIWAN SEMICONDUCTOR MANUFACTURING

Information Technology Taiwan 3.70

BABA ALIBABA GROUP HOLDING ADR REPRESEN

Information Technology China 3.66

NPN NASPERS LIMITED N LTD Consumer Discretionary South Africa 2.30

939 CHINA CONSTRUCTION BANK CORP H

Financials China 1.58

BIDU BAIDU ADR REPTG INC CLASS A Information Technology China 1.21

1398 INDUSTRIAL AND COMMERCIAL BANK OF

Financials China 1.17

941 CHINA MOBILE LTD Telecommunication Services

China 1.09

2318 PING AN INSURANCE (GROUP) CO OF CH

Financials China 1.08

iShare ETF industry sector weightings

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1.12

2.19

2.32

2.89

4.53

5.10

6.20

7.30

7.35

10.05

23.26

26.4

Computers - Software

Utilities

Health Care

Real Estate

Telecommunication Services

Industrials

Consumer Staples

Energy

Materials

Consumer Discretionary

Financials

Information Technology

Data source: iShares by BlackRock®

How would the Digital Plus have performed in the past?3,855 rolling 3.5 year periods from 2003 to date have been tested

• The product return is uncapped from 35%

• Positive product returns achieved 70.6% of the time

• Average product returns achieved 42.50% of the time

• Capital returned 29% of the time, no capital losses would have been incurred

• Maximum return 226.01% (2003 – 2007)

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29.31%26.28%

30.87%

2.33% 2.52%5.78%

2.75%0.16%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0% 35% 35% - 70% 70% - 105% 105% - 140% 140% - 175% 175% - 210% 210% - 245%

Normal Distribution of Returns

Data source: iShares by BlackRock®

• Product protected capital in negative periods of growth

• Return is uncapped during positive periods of growth

ETF

(xiS

hare

s M

SCI E

mer

ging

Mar

kets

ETF

(E

MM

US

Equi

ty) 3

.5 y

ear r

ollin

g re

turn

s

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iShare ETF performance vs. Product performance3,855 rolling 3.5 year periods from 2003 to date have been tested

-50.00%-25.00%

0.00%25.00%50.00%75.00%

100.00%125.00%150.00%175.00%200.00%225.00%250.00%

Index Growth Digital Payoff Barrier Level

Data source: Bloomberg Jan 25, 2018

What dividends am I forfeiting by investing in this product as opposed to the Index?

• As the Satrix MSCI Emerging Markets ETF does not have a dividend yield history as yet, we haveused the iShares MSCI Emerging Markets ETF as a proxy in this example for the Dividend Yield

• Net dividend forfeiture is 5.17% in USD over the 3.5 years• ETF trackers provide no capital protection, unlike the ESP

iShare ETF trackers in USD

Current 12m Dividend Yield 2.73%

Less Annual Management Fee 0.73%

Net 2.00%

Less 20% tax 0.55%

Net Dividend 1.45%

Compounded for 3.5 years 5.17%

12Data source: Bloomberg

What tax will investors pay?

• The information provided in this brochure is general information and should not be construedas tax advice. Taxation legislation and its interpretation may change. For as long as aninvestor is the holder of an ESP, they will be the owner of ETFs. Section 9C of the Act deemsreceipts and accruals arising from the disposal of ETFs to be of a capital nature if thetaxpayer was the owner of the equity share for a continuous period of at least 3 yearsimmediately prior to the sale.

• The tax consequences for investors who elect to sell their ETFs before a period of 3 yearshas elapsed will be dependent upon individual circumstances and any profit realised from thesale may be subject to Income Tax/CGT.

• It is recommended that prospective investors seek independent professional legal, tax andaccounting advice and consider the investment in the light of the Investor’s particularcircumstances. No responsibility is accepted by IBL for the treatment of any court of law, tax,banking or other authority in any jurisdiction of the investment and no undertaking, warrantyor representation is given with regard to the outcome of any such investment.

• All opinions, statements and analysis expressed are based on information, which was currentat the time of writing and from sources, which ISP believes to be authentic and reliable.

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What fees will investors pay?

A distribution fee of 1.25% (inclusive of VAT) will be paid in year 1 and 0.75% in years 2 and 3will be paid annually in advance to the Financial/Investment Professional.

Note: All fees, including JSE listing costs and licensing costs, have been priced into the productand will not affect the investor’s return.

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Closing date Trade date Listing date Maturity date

23 March 2018 28 March 2018 13 April 2018 28 September 2021

Important dates

Financial Services Board (“FSB”) licence categories

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FSB Category 1 (“CAT1”) and Category 2 (“CAT2”) license holders qualifying criteria to write structured products:

• Listed products are exempt under the Financial Advisory and Intermediary Services Act(“FAIS”), however financial advisors/stockbrokers/wealth managers should be aware of their FAIScompliance responsibilities under the Johannesburg Stock Exchange(“JSE”) rules for listedproducts;

• Where advice is being given, financial advisors/stockbrokers/wealth managers should ensure thatthey understand the underlying instruments and are able to provide advice on a "look through"basis; and

• The onus is on the financial advisor/stockbroker/wealth manager to ensure that they have theappropriate license to advise on structured products – e.g. Investec Emerging Markets Digital PlusESP

CAT1 license holders

1.8 Securities and Instruments: Shares1.11 Securities and instruments: warrants,

certificates and other instruments acknowledging, conferring or creating rights to subscribe to acquire, dispose of or convert securities and instruments referred to in subcategories 1.8, 1.9 and 1.10

1.13 Securities and instruments: Derivative instruments excluding warrants

1.14 Participatory interests in CIS’s (Collective Investment Schemes)

CAT2 license holders

2.5 Securities and instruments: Shares2.8 Securities and instruments: warrants,

certificates and other instruments acknowledging, conferring or creating rights to subscribe to acquire, dispose of or convert securities and instruments referred to in subcategories 2.5, 2.6 and 2.7 above

2.10 Securities and instruments: Derivative instruments excluding warrants

2.11 Participatory interests in CIS’s (Collective Investment Schemes)

Contact us

Please contact one of our product specialists for further information

Brian McMillan +27 11 291 3180 brian.mcmillan@investec.co.za

Kate Langlois +27 11 286 9450 kate.langlois@investec.co.za

Japie Lubbe +27 21 416 3307 japie.lubbe@investec.co.za

Carlo Accolla +27 21 416 3316 carlo.accolla@investec.co.za

Lynn Bell +27 21 416 3328 lynn.bell@investec.co.za

Recent accolades

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Disclaimer

The information contained in this communication is for informative purposes and is not intended to constitute advice in any form, including butnot limited to investment, accounting, tax, legal or regulatory advice. As product supplier, Investec is not in a position to have regard to thespecific investment objectives, financial situation or particular needs of any specific recipient. The material is based upon information that weconsider to be reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Investors should seektheir own independent professional advise regarding the suitability of this ESP for their own particular investment purposes

All illustrations, forecasts or hypothetical data are for illustrative purposes only and are not guaranteed. The sender accepts no liabilitywhatsoever for any loss or damage of any kind arising out of the use of all or any part of this communication. Investec does not makerepresentation that the information provided is appropriate for use in all jurisdictions or by all investors or other potential investors. Parties aretherefore responsible for compliance with applicable local laws and regulations. Prospective investors should be fully aware of the risksinvolved in trading investment related products. Profits and benefits are dependent on the performance of underlying assets and other variablemarket factors and are not guaranteed.

This product is not sponsored, endorsed, sold, or promoted by the ETF or indices, as specified herein, or the relevant ETF sponsor, being thecorporation or other entity that (a) is responsible for setting and reviewing the rules and procedures and the methods of calculation andadjustments, if any, related to the relevant ETF and (b) announces (directly or through an agent) the level of the relevant ETF on a regularbasis. No ETF sponsor makes any representation whatsoever, whether express or implied, either as to the results to be obtained from the useof the ETF and/or the levels at which the ETF stands at any particular time on any particular date or otherwise. No ETF or ETF sponsor shallbe liable (whether in negligence or otherwise) to any person for any error in the ETF and the ETF Sponsor is under no obligation to advise anyperson of any error therein. No ETF sponsor is making any representation whatsoever, whether express or implied, as to the advisability ofpurchasing or assuming any risk in connection with entering into any transaction in respect of this product. Neither Investec nor the investorshall have any liability to the other for any act or failure to act by the ETF sponsor in connection with the calculation, adjustment ormaintenance of the ETF. Investec has no affiliation with or control over the ETF or ETF sponsor or any control over the computation,composition or dissemination of the indices. Although Investec will obtain information concerning the indices from publicly available sources itbelieves reliable, it will not independently verify this information. Accordingly, no representation, warranty or undertaking (express or implied) ismade and no responsibility is accepted by Investec as to the accuracy, completeness and timeliness of information concerning the indices.

Corporate and Institutional Banking, a division of Investec Bank Limited. Reg. No. 1969/004763/06. An Authorised Financial Services Provider(FSP 11750) and registered Credit Provider (NCRCP9). A member of the Investec Group.

Investec EM Digital Plus 06.02.2018

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