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Abridged Audited Results for the Year Ended 30 June 2016 - ASHMID
Ashburton MidCap Exchange Traded Fund
(Formerly RMB MidCap Exchange Traded Fund)
A portfolio in the Ashburton Collective Investment Scheme (the portfolio) registered in terms of the Collective
Investment Schemes Control Act, 45 of 2002
(Incorporated in the Republic of South Africa)
(Date of incorporation: 26 June 2012)
Share Code: ASHMID
ISIN: ZAE000164521
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2016
The Ashburton Collective Investment Scheme (the Scheme) was established in accordance with the provisions of
the Collective Investment Schemes Control Act (CISCA) with effect from 12 April 2008. The Ashburton MidCap
Exchange Traded Fund (the fund) was established as a portfolio of the Scheme in accordance with paragraph A
of the Deed of the Scheme on 26 June 2012.
The investment objective of the fund is to track the price and performance yield of the FTSE/JSE Mid Cap Index
(the index) on the JSE Limited.
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
Rand 2016 2015
ASSETS
Investments designated at fair value through profit or loss 134 492 983 124 436 944
Trade and other receivables 160 983 120 724
Cash and cash equivalents 552 926 278 957
Total assets 135 206 892 124 836 625
LIABILITIES
Net assets attributable to participatory interest holders 134 977 452 124 569 591
Trade and other payables 229 440 267 034
Total equity and liabilities 135 206 892 124 836 625
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016
Restated
Rand 2016 2015
Interest income 25 226 30 276
Fair value gains 13 775 149 13 242 063
Investment income 13 800 375 13 272 339
Other income 160 265 165 440
Operating expenses (1 030 979) (1 010 455)
Profit before tax 12 929 661 12 427 324
Taxation - -
Profit before amounts attributable to participatory interest holders 12 929 661 12 427 324
Increase in net assets attributable to participatory interest holders (12 929 661) (12 427 324)
Total comprehensive income for the year - -
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016
Restated
Rand 2016 2015
Cash flows from operating activities
Cash utilised by operations (908 308) (1 335 702)
Interest received 26 854 30 276
Dividends received 3 342 342 3 931 121
Sale of investments designated at fair value through profit or loss 46 055 673 54 125 246
Purchase of investments designated at fair value through profit or loss (45 720 792) (54 475 817)
Net cash inflow from operating activities 2 795 769 2 275 124
Cash flows from financing activities
Distributions paid to participatory interest holders (2 521 800) (2 835 000)
Net cash outflow from financing activities (2 521 800) (2 835 000)
Net increase/(decrease) in cash and cash equivalents 273 969 (559 876)
Cash and cash equivalents at the beginning of the year 278 957 838 833
Cash and cash equivalents at the end of the year 552 926 278 957
SUMMARISED ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2016
The preparation of the audited financial results for the year ended 30 June 2016 was supervised by Richard
Pampel CA (SA), chief financial officer of FirstRand Investment Management Holdings Limited.
Basis of presentation
The annual financial statements have been prepared in accordance with IFRS issued by the International
Accounting Standards Board (IASB), and in accordance with the requirements of the trust deed of the fund (the
Trust Deed), the JSE Listing Requirements for Exchange Traded Funds and the Collective Investment Schemes
Control Act No 45 of 2002. There were no changes in accounting policies for recognition and measurement
during the current year, however there has been a change in presentation of the financial statements. There were
no new or revised IFRS which have been adopted in the current year.
In the prior year interest income was presented separately from fair value gains or losses for instruments
designated at fair value through profit and loss in the statement of comprehensive income. This presentation
format has been re-evaluated and it has been deemed more appropriate to change the presentation policy to
present these transactions on one line in the statement of comprehensive income under fair value gains or
losses.
Also in the prior year, distributions declared to participatory interest holders were shown on the face of the
statement of comprehensive income. This presentation format has been re-evaluated and it has been deemed
more appropriate to change the presentation policy to present the distributions declared and paid in the note to
the net assets attributable to participatory interest holders.
Cash flows regarding interest income and distributions paid to participatory interest holders are shown in the
statement of cash flows.
The restatements had no effect on the statement of financial position and profit before taxation.
The fund prepares its annual financial statements in accordance with the going concern principle using the
historical cost basis, except for the following financial instruments:
- Investment in securities.
The preparation of annual financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the annual financial statements are outlined in the accounting policy
below.
All monetary information and figures are stated in South African rands (R), which is the functional and
presentation currency of the fund.
Financial instruments
Initial recognition and measurement
Financial instruments are recognised when the fund becomes a party to the contractual provisions of the
instrument.
The manager determines the classification of financial instruments at initial recognition.
All financial instruments not carried at fair value through profit or loss are initially measured at fair value plus
transaction costs.
Financial instruments carried at fair value through profit or loss are initially measured at fair value with
transactions costs expensed directly in profit or loss.
Subsequent measurement
Financial instruments, other than those designated at fair value through profit or loss, are measured at amortised
cost, using the effective interest method.
Investments
Investments are designated at fair value through profit or loss at inception as these are managed on a fair value
basis.
Derivatives
Derivative financial instruments are classified as held for trading and are measured at fair value through profit or
loss.
Trade and other receivables
Trade and other receivables are measured at amortised cost using the effective interest method, when the impact
of discounting is material.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash
and cash equivalents are measured at amortised cost.
All balances included in cash and cash equivalents have a maturity date of less than three months.
Financial liabilities
Financial liabilities, other than those held at the fair value through profit and loss are measured at amortised cost
using the effective interest rate method.
Trade and other payables
Trade and other payables are measured at amortised cost using the effective interest method, when the impact
of discounting is material.
Creation and redemptions
Creation and redemptions are recorded on the trade date, being the previous day’s closing index price, using the
proceeds less any transaction costs.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial
position when there is currently an enforceable legal right to offset i.e. when the right is not contingent on a future
event and is legally enforceable for all counterparties in the normal course of business, as well as in the event of
default, insolvency and bankruptcy, and when the fund has the intention and ability either to settle on a net basis,
or to realise the asset and settle the liability simultaneously.
Derecognition of financial instruments
The fund derecognises financial assets when:
- the contractual rights to the financial assets expire; or
- where there is a transfer of the contractual rights to receive the cash flows of the financial asset and
substantially all of the risks and rewards related to the ownership of the financial assets; or
- Where the fund retains the contractual rights of the assets but assumes a corresponding liability to transfer
these contractual rights to another party and consequently transfers substantially all the risks and rewards
associated with the financial asset.
A financial liability is derecognised when the liability is extinguished. This is, when the obligation specified in the
contract is discharged, cancelled or has expired
Impairment of financial assets
A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount.
At each reporting date the fund assesses all financial assets, other than those at fair value through profit or loss,
to determine whether there is objective evidence that a financial asset or group of financial assets has been
impaired.
For amounts due to the fund, significant financial difficulties of the debtor, probability that the debtor will enter
bankruptcy and default on payments are all considered indicators of impairment.
Impairment losses are calculated as the difference between the financial assets carrying amount and the present
value of estimated future cash flows discounted at the financial assets original effective interest rate. Impairment
losses are recognised in profit or loss.
Impairment losses are reversed when an increase in the financial assets recoverable amount can be related
objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying
amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying
amount would have been had the impairment not been recognised.
Participatory interests
The fund issues one class of participatory interest which is redeemable at the holder's option. Participatory
interests can be put back to the fund at any dealing date for cash equal to a proportionate share of the fund's net
asset value attributable to the participatory interest class.
The participatory interests are measured at the redemption amount that is payable at the reporting date if the
holder exercises the right to put the participatory interests back to the fund.
The participatory interests are issued and redeemed at the holder's option at prices based on the fund's net asset
value per participatory interest at the time of issue or redemption. The fund's net asset value per participatory
interest is calculated by dividing the net assets attributable to the holders of the participatory interest by the total
number of outstanding participatory interests, in accordance with the provisions of the fund's trust deed.
Net assets attributable to participatory interest holders evidences a residual interest in the assets of an entity
after deducting all of its liabilities.
The value of the net assets attributable to participatory interest holders will vary with the changes in the
underlying value of the investments net of receivables and payables. The total movement in the statement of
comprehensive income is transferred to the net assets attributable to participatory interest holders.
Creations and redemptions are recorded on trade date using the previous day's closing price.
In accordance with the fund’s Trust Deed, the fund distributes its distributable income and any other amounts
determined by the manager of the fund to participatory interest holders in cash.
Therefore such participatory interests are classified as financial liabilities at amortised cost.
The carrying value of the net assets attributable to participatory interest holders approximates its fair value.
Securities lending
The fund is authorised to engage in securities lending activities up to 50% of the assets under management.
Collateral is held by the relevant lending units.
Investment income
Dividend income
Dividend income in respect of listed investments is recognised when the right to receive payment is established.
This is on the “last-day-to-trade” for listed investments and on the “date-of-declaration” for unlisted investments.
Dividend income is recognised in the statement of comprehensive income as part of fair value gains and losses.
Fair value gains and losses
Gains and losses arising from a change in the fair value of investments, including any foreign exchange gains
and losses are included in the statement of comprehensive income in the year in which the change arises.
Interest income
Interest income on investments is recognised in the statement of comprehensive income as part of fair value
gains and losses. Interest income on cash and cash equivalents is recognised in the statement of comprehensive
income as part of investment income using the effective interest method.
Interest expense
Interest expense is recognised in the statement of comprehensive income for financial liabilities measured at
amortised cost, using the effective interest method, as set out above.
Other income
Other income comprises income from securities lending activities.
Securities lending fee income
The fees earned for the administration of securities lending activities are accounted for on an accrual basis in the
year in which the services are rendered.
Tax
The fund has no current or deferred tax liability as all realised gains and losses are considered to be of a capital
nature and disregarded in the tax calculation of this collective investment scheme portfolio in accordance with
paragraph 61 of the Eighth schedule to the Income Tax Act No 58 of 1962. All investment income is distributed
within the time frames specified by section 25BA of the Income Tax Act and is therefore taxed in the hands of the
participatory interest holders.
Critical accounting estimates and judgements in applying accounting policies
In preparing the financial statements, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities. Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Unless stated otherwise the judgements applied by management in applying the accounting
policies are consistent with the prior year.
No significant accounting estimates and judgements have been applied in the annual financial statements of the
fund.
SUMMARISED NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
Investments designated at fair value through profit or loss
The following principal methods and assumptions are used to determine the fair value of financial instruments:
Listed securities - equity instruments
The fair value of listed equities is determined using unadjusted quoted closing prices. The fund therefore
classifies the fair value measurement of the listed equities in the level 1 category.
30 June 2016
Carrying
Rand amount Level 1 Level 2 Level 3
Equity instruments - local 134 492 983 134 492 983 - -
Total financial assets measured at fair value 134 492 983 134 492 983 - -
30 June 2015
Carrying
Rand amount Level 1 Level 2 Level 3
Equity instruments - local 124 436 944 124 436 944 - -
Total financial assets measured at fair value 124 436 944 124 436 944 - -
Trade and other receivables, cash and cash equivalents and trade and other payables
No hierarchy disclosure is made for financial assets and liabilities measured at amortised cost where their
carrying value approximates fair value.
Net assets attributable to participatory interest holders
Restated
Rand 2016 2015
Balance at the beginning of the year 124 569 591 114 977 267
Increase in net assets attributable to participatory interest holders 12 929 661 12 427 324
Distributions paid (2 521 800) (2 835 000)
Balance at the end of the year 134 977 452 124 569 591
Management and administration expenses
The manager is entitled to a management fee for the management of the Scheme, as determined by the
manager from time to time, based on the market value of the investments of the fund. A management fee of 50
(fifty) basis points of the market value of the investments of the fund has been applied.
Distributions
The fund effects quarterly distributions out of income received by the fund.
Number of Distribution Number of Distribution
paticipatory paticipatory
interests interests
Rand 2016 2016 2015 2015
Declared 25 September 2015 and paid 01 October 2015
(Declared 26 September 2014 and paid 01 October 2014)
3.27 cents per participatory interest (2015: 2.59 cents per
participatory interest) 18 000 000 588 600 18 000 000 466 200
Declared 24 December 2015 and paid 05 January 2016
(Declared 24 December 2014 and paid 30 December
2014)
6.00 cents per participatory interest (2015: 4.36 cents per
participatory interest) 18 000 000 1 080 000 18 000 000 784 800
Declared 08 April 2016 and paid 11 April 2016
(Declared 30 March 2015 and paid 01 April 2015)
4.74 cents per participatory interest (2015: 4.27 cents per
participatory interest) 18 000 000 853 200 18 000 000 768 600
Declared 30 June 2016 and paid 11 July 2016
(Declared 26 June 2015 and paid 30 June 2015)
2.75 cents per participatory interest (2015: 4.53 cents per
participatory interest) 18 000 000 495 000 18 000 000 815 400
3 016 800 2 835 000
Included in the liability to participatory interest holders is the distribution payable as at 30 June.
Taxation
Any taxable income realised during the period has been distributed to the holders of the fund's participatory
interests. As a result, both income and capital gains are taxed in the hands of the participatory interest holders.
Risk management
Exposure to investment, credit, market and operational risks arise in the normal course of investment activities.
The fund’s acceptance of risk is directly attributable to the risks associated with any investment in securities.
The objectives for managing the risks associated with financial instruments held for investment purposes, as well
as a brief description of the relevant risks and methods adopted to mitigate these risks are outlined in more detail
below. The fund is regulated in terms of the Collective Investment Schemes Control Act (CISCA). In terms of the
CISCA, the manager must appoint a trustee. The assets of the portfolio are held under the control of the trustee.
Management monitors compliance in terms of the CISCA requirements and reports are submitted to the Financial
Services Board (FSB) on a quarterly basis.
Daily pricing of the fund is publicly available.
The manager’s investment committee oversees management’s compliance with the fund’s risk management
framework in relation to the risks faced by the portfolio.
The investment policy of the fund is to track the FTSE/JSE Mid Cap Index (the index) as closely as possible, by
buying only FTSE/JSE Mid Cap securities in the weighting in which they are included in the index, and selling
only securities which are excluded from the index from time to time as a result of quarterly index reviews or
corporate actions, or which are required to be sold to ensure that the portfolio holds FTSE/JSE Mid Cap
securities in the same weighting as they are included in the index. However, the fund is also entitled, at its
discretion and only on a temporary basis; to employ such other investment techniques and instruments as will
most effectively give effect to the object or the investment policies of the fund. The fund’s portfolio will not be
managed according to traditional methods of active management, which involve buying and selling of securities
based on economic, financial and market analysis and investing judgement. The fund will not buy or sell
securities for trading purposes or for any purpose other than to track the index as closely as possible. As a further
objective, the securities held by the fund will be managed to generate income for the benefit of investors, for
instance, income is generated from scrip lending, which is applied to reduce expenses and the related tracking
error.
The fund’s portfolio will be adjusted as determined by the stipulations of the JSE’s index calculation methodology
to conform to changes in the basket of securities comprising the fund’s portfolio so as to substantially reflect the
composition and weighting of the securities comprising the index at all times.
It is recorded that the fund’s ability to replicate the price and yield performance of the index will be affected by the
costs and expenses incurred by the fund. Costs and expenses may result in the index not being replicated
perfectly by the fund’s portfolio.
The fund is exposed to the following risks from its use of financial instruments:
- Liquidity risk;
- Interest rate risk;
- Credit risk;
- Operational risk;
- Market risk;
- Investment risk;
- Index risk;
- Trading risk; and
- Secondary trading risk.
The above mentioned risks are addressed below in more detail.
Liquidity risk
Liquidity risk is the risk that the fund will not be able to meet its financial obligations towards participatory interest
holders when they fall due. Net assets attributable to participatory interest holders are payable on demand.
The approach to managing liquidity risk is to ensure that the fund would be able to pay suitable distributions to
participatory interest holders on a quarterly basis. All distributions are calculated and approved by the Managers.
Liquidity risk may arise upon realisation or rebalancing of the fund, in line with the index, where one or more
securities within the index does not trade in sufficient volume.
The fund participatory interests are listed instruments; that are bought and sold on the JSE through a JSE
member. The participatory interest holder may exchange participatory interests for the underlying assets which
the participatory interests represent. The participatory interest holder may sell their participatory interests on the
JSE.
Market makers will attempt to maintain a high degree of liquidity through continuously offering to buy and sell the
fund participatory interests at prices around NAV of the fund securities, thereby ensuring tight buy and sell
spreads. Under normal circumstances and conditions, the participatory interest holder will be able to buy or sell
the fund participatory interests from market makers.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest
rates.
Interest rate risk is managed by diversifying the portfolio.
Credit risk
Credit risk is the risk of loss due to non-performance of a counterparty in respect of any financial or performance
obligation. For fair value portfolios the definition of credit risk is expanded to include the risk of losses through fair
value changes arising from changes in credit spreads.
In terms of CISCA, the manager may, subject to the requirements of section 95 of the CISCA, lend or offer to
lend assets included in the fund’s portfolio within the limits or on the conditions determined by the trust deed. The
trustee of the fund gives authority to the manager to lend or offer to lend securities with a value not exceeding
50% of the market value of all securities included in the fund’s portfolio. The manager engaged in securities
lending activities, in respect of the securities held by the fund, during the reporting period.
- In terms of the Trust Deed, the manager may engage in securities lending under section 85 of the
CISCA, subject to the following limits and conditions:
- The securities lending must be beneficial to all participatory interest holders;
- The manager may lend or offer to lend securities with a value not exceeding 50 per cent of the market
value of all securities included in the fund’s portfolio;
- The securities that may be lent to one borrower are limited in accordance with the limits determined by
the Registrar for the inclusion of the money market instruments in a portfolio;
- Collateral security for the securities loaned must have an aggregate value that exceeds the market
value of the securities loaned by not less than five per cent at all times and may only consist of –
- Cash; or
- Other securities; or
- A combination of cash and other securities.
- Securities may not be lent for a period longer than 12 months; and
- Securities may not be lent unless subject to a right of recall.
In terms of the securities lending agreements, it is the duty of the agent to take delivery of the collateral assets,
any appropriate instruments of transfer or instrument of title in respect of a service level agreement. Collateral
assets and instruments of transfer of title are held on behalf of, and for the benefit of, the principal as represented
by the fund.
The portfolio could be exposed to credit risk to the extent that inadequate collateral is held on the underlying
assets. If a borrower fails to perform its obligations, the fund may be unable to recover the loaned investment.
However, the manager only engages in securities lending with A-rated financial institutions.
Credit risk is only applicable to the financial assets of the fund. The credit risk is considered to be low. The
carrying amounts of financial assets represent the maximum credit exposure. None of the fund’s financial assets
are considered past due or impaired.
Credit risk arising on cash on call, money market instruments and cash deposits is mitigated by depositing funds
with reputable banks with acceptable credit ratings. Credit risk arising on debt instruments is mitigated by
investing in highly rated investments or instruments issued by highly rated counterparties and, where this is not
possible, all investments are analysed and due diligence is applied by the fund’s credit committee to ensure that
investments are of a good enough quality to counter risk exposure.
The fund’s exposure to credit risk could be as a result of a counterparty failing to meet its contractual obligations.
This could arise primarily from the fund’s investment activities.
The maximum exposure to credit risk at the reporting date was as follows:
The funds exposure to credit risk due to securities out on loan is R24 662 766 (2015: R10 741 461), and the
collateral held to mitigate the credit risk is R25 950 000 (2015: R13 208 535).
Rand 2016 2015
Trade and other receivables 160 983 120 724
Cash and cash equivalents - local 552 926 278 957
Credit risk exposure 713 909 399 681
Operational risk
If shares in the underlying companies are suspended or cease trading for any reason, the suspended shares will
not be delivered to a holder exercising its right to take delivery of the underlying shares until the suspension on
the trading in respect of those shares is lifted.
If the computer facilities or other facilities of the JSE malfunction, calculation and trading in the fund securities
may be suspended for a period of time.
Operational risk arises in rebalancing the underlying portfolio of securities in the fund to the underlying securities
constituting the index, thereby impacting the value of the fund's securities and in the determination of the
distributions around distribution dates in order to minimise tracking error.
The manager purely executes and administers trades. Daily participatory interest reconciliations are prepared.
Weekly reconciliations are prepared between the fund administrators and the custodian. The manager reviews all
the reconciliations performed with necessary follow ups. A reconciliation is prepared and reviewed monthly by the
manager and is considered the most appropriate control for internal risk management. Assets are held in custody
at The Standard Chartered Bank. Trades are all in listed equity instruments.
Market risk
Market risk exists where significant changes in security prices will affect the value of the fund’s financial
Instruments. The investment mandates indicate that the fund’s portfolio is passively managed and as a result the
management of the market risk is not possible.
There is no guarantee that the fund’s portfolio will achieve its investment objective of perfectly tracking the index.
The value of fund securities and distributions payable by the fund’s portfolio will rise and fall as the capital values
of the underlying securities housed in the fund and the income flowing there-from fluctuates. Prospective
participatory interest holders should be prepared for the possibility that they may sustain a loss.
The fund’s portfolio may not be able to perfectly replicate the performance of the index because -
The fund is liable for certain costs and expenses not taken into account in the calculation of the index; or
- Certain index constituents may become temporarily unavailable; or
- Other extraordinary circumstances may result in a deviation from precise index weightings
Investment risk
There can be no assurance that the fund will achieve its investment objectives.
The following factors could impact negatively on the investment performance of the portfolio:
- Certain costs and expenses incurred by the fund could cause the underlying portfolio to mis-track
against the index;
- Temporary unavailability of securities in the secondary market or other extraordinary circumstances
could cause deviations from the exact weightings of the index;
- In circumstances where securities comprising the index are suspended from trading or other market
disruptions occur, it may be impossible to rebalance the portfolio of securities held by the fund and this
may lead to a tracking error; and
- Misinterpretation of information on the calculation of the index could result in mis-tracking of the index.
The investment mandate requires that the fund’s portfolio is passively managed and as a result the management
of market risk is not possible.
There is no assurance that the index will continue to be calculated and published on the same or similar basis
indefinitely. The index was created by the JSE as a measure of market performance and not for the purposes of
trading fund index securities. The past performance of the index is not necessarily a guide to its future
performance.
The index may be adjusted from time to time as a result of mergers, re-organisations, schemes of arrangement
or other corporate activity involving constituent companies. Any adjustments to the index will be implemented as
determined from time to time in terms of the relevant index stipulations, for example, if a constituent company
pays a special dividend.
The adjustments may require the removal of a constituent company from the index and the substitution thereof
with a new constituent company while at the same time, if necessary, adjusting the base level. The adjustments
to the portfolio will be made in such a way that the portfolio will remain substantially aligned with the index level at
all times.
Tracking risk
The risk that the index may not be appropriately tracked is managed in the following manner:
- Check announcements made on the JSE website for any events that may change the index and
rebalance, if necessary;
- Check corporate actions schedule for any events that may change the index and rebalance, if
necessary;
- Check the positions report versus what theoretically should be held with the ETF trading application and
rebalance, if necessary; and
- During daily net asset value (NAV) calculation process, check if the Asburton Midcap ex-closing price =
1/1000 of the index closing level, i.e. do a reasonability check.
Secondary trading risk
There can be no guarantee that the fund participatory interests will remain listed on the JSE. Any termination of a
listing would be subject to the JSE listing requirements. Despite the presence of market makers, the liquidity of
the fund participatory interests cannot be guaranteed. The participatory interests may trade at a discount or
premium to their NAV.
Sensitivity analysis
All the fund’s underlying investments are listed on the JSE. The price of the fund participatory interest is closely
correlated to the movements in the index. Any movement or adjustment in the index, or the underlying
constituents of the index, will have an impact on the price of the participatory interest.
At any point in time, the market value of a fund participatory interest is expected to reflect 1/1000th of the index
level, plus an amount which reflects a pro-rata portion of any accrued distribution amount within the fund’s
portfolio. Therefore, a 100 point movement in the index would result in a R0.10 movement in the NAV per
participatory interest of the fund.
Actual market values may be affected by supply and demand and other market factors, but the ability of a
participatory interest holder to switch out of the fund's participatory interest by redeeming them in specie for one
or more baskets of constituent securities, subject to a minimum of 1 million fund participatory interests being
delivered, should operate to substantially avoid or minimise any differential which may otherwise arise between
the relevant basket and/or index level and the value at which the fund participatory interests trade from time to
time.
Investment in derivatives
The manager may invest in derivatives from time to time. While an investment in derivatives will only be
employed within the investment restrictions stipulated in the trust deed and the CISCA, some risks may be
associated with investments in these instruments.
No significant investments in derivatives were used for the financial period under review.
These financial statements have been audited by the independent auditors, PricewaterhouseCoopers
Incorporated, and their unqualified audit opinion is available for inspection at the company’s registered head
office.
A full copy of the financial statements is available on the RMB website http://www.rmb.co.za/ourFundsETFs.asp
30 September 2016
Sponsor
Bridge Capital Advisors Proprietary Limited
Trustee
Standard Chartered Bank Johannesburg Branch
Managers
Ashburton Management Company RF Proprietary Limited
Auditors
PricewaterhouseCoopers Incorporated
Date: 30/09/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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