Investec Euro Stoxx50 Digital Plus

Presentation

October 2018

Investec Euro Stoxx50 Digital Plus

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100% downside protected at

maturity in ZAR provided the Index

does not end down more than 40%.

The Digital Plus ESP is a credit

linked ESP where the investor takes

credit risk on both Investec Bank

Limited (“IBL”) and Standard Bank

of SA (“SBK”).

IBL is the product supplier, liquidity

provider, issuer and market maker.

The ESP is a listed instrument on

the JSE and can be purchased via a

stockbroking account using Rand.

Minimum investment amount is from

R50 000 cash and increments of

R10 000.

Daily liquidity in normal market

conditions. Investec makes an

active daily market in the investment

on the JSE with a bid to mid-spread

of 1%.

A 3.5-year equity investment linked to the

performance of the Euro Stoxx50 Index.

The return will be paid to the investor in

Rand therefore no currency risk.

Earn a minimum 70% digital return in

ZAR if the Index is flat or positive at

maturity, plus unlimited upside above

70%.

Reference Index: Euro Stoxx50 (SX5E

Index).

JSE code: SPIB29.

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

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40%

50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

160%

170%

180%

190%

200%

40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 190% 200%

Return

EuroStoxx50 Index

70% Digital Return

Uncapped

What returns can investors expect?

Index returns at maturity* Initial Rand amount invested Digital Plus ESP investment value at maturity

78% R100 000 R178 000

27% R100 000 R170 000

12% R100 000 R170 000

-21% R100 000 R100 000

-42% R100 000 R58 000

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* Theoretical returns for illustrative purposes

Euro Stoxx50 commentary

• The Euro Area is the second largest economy in the

world.

• Of the 19 member states it includes, the biggest are:

Germany (29% of GDP, France (20%), Italy (15%)

and Spain (10%).

• On the expenditure side, household consumption is

the main component of GDP and accounts for 54%

of its total use, followed by gross fixed capital

formation (21%) and government expenditure (20%).

• Exports of goods and services account for 47

percent of GDP while imports account for 43 percent,

adding 4 percent of total GDP.

• The European Central Bank has called an end to its

quantitative easing programme by the end of 2018,

showing confidence in the Eurozone economy

• Per the Graph below the GDP annual growth rate

has recovered to over 2% per annum after the dual

shock of both the financial and Greek crisis.

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Source: Tradingeconomics.com | Eurostat

2008 2010 2012 2014 2016 2018

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2

0

-2

-4

-6

EU GDP annual growth rate

Euro Stoxx50 returns 2000-2018

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Data source: Bloomberg

Euro Stoxx50 country exposure

Country Weights %

France 38,05%

Germany 31,85%

Netherlands 8,92%

Spain 8,68%

Italy 4,51%

United Kingdom 3,2%

Belgium 2,6%

Finland 1,16%

Ireland 1,03%

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As of 4 Sep 2018 (%)

Data source: Stoxx

Euro Stoxx50 Top 10 companies

As of 4 Sep 2018 (%)

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Data source: Bloomberg

Name ISIN Weight

TOTAL ORD FR0000120271 6.15%

SAP SE ORD DE0007164600 4.78%

SIEMENS ORD DE0007236101 4.04%

SANOFI-AVENTIS ORD FR0000120578 3.60%

LVMH MOET HENNESSY LOUIS VUITT FR0000121014 3.48%

ALLIANZ SE ORD DE0008404005 3.47%

ASML HOLDING ORD NL0010273215 3.27%

UNILEVER NV NL0000009355 3.20%

BAYER AG DE000BAY0017 3.20%

BASF SE ORD DE000BASF111 3.12%

Euro Stoxx50 industry sector weightings

Sector Weights %

Financials 18,90%

Industrials 14,12%

Consumer discretionary 11,66%

Consumer staples 10,94%

Healthcare 10,65%

Information technology 9,2%

Energy 7,9%

Materials 6,15%

Utilities 4,88%

Other 5,60%

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As of 4 Sep 2018 (%)

Data source: Stoxx

How would the Digital Plus have performed

in the past?

3,603 rolling 3.5 year periods for the past

14 years

• Digital would have triggered 59.12% historically

• Investors would have received 70% return in

50.03% of the time

• Investors would have received more than 70%

return in 9.09% of the time

• Capital returned 38.93% of the time

• Capital losses would have been incurred in

1.89% of the time and only in the 2008 Financial

crisis

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Data source: Bloomberg

1.89%

38.93%

50.03%

9.09%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Negative returns Returned Capital 70% Digital Greater than 70%

Distribution of Returns

Euro Stoxx50 performance vs. Digital Plus

performance

3063 rolling 3.5 year periods from 2004 to date have been tested

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-100.00%

-50.00%

0.00%

50.00%

100.00%

150.00%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

3.5yr rolling returns

Eurostoxx50 Digital Returns Data source: Bloomberg

What dividends am I forfeiting by investing in

this product as opposed to the Index?

• Dividend yield of the Sygnia Euro

• Net dividend forfeiture is 7.23% over the 3.5 years

• ETF trackers provide no capital protection,

• Where the the Digital Plus, offers geared upside and capital protection

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Data source: Bloomberg

Sygnia Euro Stoxx50 tracker

Current 12m Dividend Yield 2.18%

Less 20% tax 0.55%

Net Dividend 1.74%

Compounded for 3.5 years 7.23%

What tax will investors pay?

• The information provided in this brochure is general information and should not be construed as tax advice.

Taxation legislation and its interpretation may change. For as long as an investor is the holder of an ESP, they will

be the owner of ETFs. Section 9C of the Act deems receipts and accruals arising from the disposal of ETFs to be

of a capital nature if the taxpayer was the owner of the equity share for a continuous period of at least 3 years

immediately prior to the sale.

• The tax consequences for investors who elect to sell their ETFs before a period of 3 years has elapsed will be

dependent upon individual circumstances and any profit realised from the sale may be subject to Income Tax/CGT.

• It is recommended that prospective investors seek independent professional legal, tax and accounting advice and

consider the investment in the light of the Investor’s particular circumstances. 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, warranty or representation is given with regard to the outcome of any such investment.

• All opinions, statements and analysis expressed are based on information, which was current at the time of writing

and from sources, which ISP believes to be authentic and reliable.

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What fees are included?

• All distribution fees, including JSE listing costs and licensing costs, have been priced into the product and will not

affect the investor’s return.

• That is, investors will receive back R170 for each R100 they invest should the index be flat or slightly positive.

• A distribution fee of 1.00% (inclusive of VAT) will be paid in year 1, 2 and 3 annually in advance to the

Financial/Investment Professional.

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Important dates

Closing date Trade date Listing date Maturity date

19 November 2018 29 November 2018 14 December 2018 31 May 2022

Financial Services Board (“FSB”) licence categories

FSB Category 1 (“CAT1”) and Category 2 (“CAT2”) licence 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 FAIS compliance responsibilities under the

Johannesburg Stock Exchange(“JSE”) rules for listed products;

• Where advice is being given, financial advisors/stockbrokers/wealth managers should ensure that they 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 the appropriate license to

advise on the Digital Plus

CAT1 license holders

1.8 Securities and Instruments: Shares

1.11 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: Shares

2.8 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)

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Contact us

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Please contact one of our product specialists for further information

Brian McMillan +27 11 291 3180 brian.mcmillan@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

Andri Joubert +27 21 416 3679 andri.joubert@investec.co.za

Africa Structured Products & Derivatives Awards 2017

Best performance in South Africa 2016 & 2017

Best distributor in South Africa 2016 & 2017

Best House Africa 2017

Deal of the Year 2017

Recent accolades

Disclaimer

The information contained in this communication is for informative purposes and is not intended to constitute advice in any form, including but notlimited to investment, accounting, tax, legal or regulatory advice. As product supplier, Investec is not in a position to have regard to the specificinvestment objectives, financial situation or particular needs of any specific recipient. The material is based upon information that we consider tobe reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Investors should seek their ownindependent 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 risks involvedin trading investment related products. Profits and benefits are dependent on the performance of underlying assets and other variable marketfactors 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 regular basis.No ETF sponsor makes any representation whatsoever, whether express or implied, either as to the results to be obtained from the use of theETF and/or the levels at which the ETF stands at any particular time on any particular date or otherwise. No ETF or ETF sponsor shall be 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 any person ofany error therein. No ETF sponsor is making any representation whatsoever, whether express or implied, as to the advisability of purchasing orassuming any risk in connection with entering into any transaction in respect of this product. Neither Investec nor the investor shall have anyliability to the other for any act or failure to act by the ETF sponsor in connection with the calculation, adjustment or maintenance 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 theindices. Although Investec will obtain information concerning the indices from publicly available sources it believes reliable, it will notindependently verify this information. Accordingly, no representation, warranty or undertaking (express or implied) is made and no responsibilityis 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