sa bullion ifa introduction presentation
TRANSCRIPT
IFA INTRODUCTION PRESENTATION
WHO WE ARE:
• FSB LICENSED INVESMENT MANAGER
• INVEST EXCLUSIVELY IN PRIMARY MARKET FOR
KRUGERRANDS
• MANDATED BY SPECIAL DISPENSATION OF SA RESERVE BANK
• OPERATE WITH RAND REFINERY
• DISTRIBUTE VIA IFAs
THE CASE FOR GOLD: THE ECONOMIC OUTLOOK• GENERATIONAL ECONOMIC PROBLEMS
– Deleveraging– Weak economies– Low interest rates– High public debt-raising– Persistent easy money
• ECONOMIES HAVE TO REFLATE
• DEBTS HAVE TO BE INFLATED AWAY
• CURRENCIES HAVE TO TAKE THE PAIN • THE SOUTH AFRICAN RAND HAS ITS CHALLENGES AS A COMMODITY
CURRENCY • GOLD IS BENEFITING AND WILL CONTINUE TO BENEFIT AS THE
CURRENCY FOR BAD TIMES…
HOW HAS THE GOLD PRICE REACTED?
GOLD PERFORMANCE TABLE
Date US$ Gold Price US$ Gold Price Performance ZAR Gold Price ZAR Gold Price
Performance
31-Dec-04 $436 R 2 454 31-Dec-05 $513 18% R 3 254 33%31-Dec-06 $632 23% R 4 456 37%31-Dec-07 $834 32% R 5 698 28%31-Dec-08 $870 4% R 8 041 41%31-Dec-09 $1 088 25% R 8 308 3%31-Dec-10 $1 406 29% R 9 282 12%31-Dec-11 $1 531 9% R 13 062 41%31-Dec-12 $1 658 8% R 14 044 8%31-Dec-13 $1 205 -27% R 12 386 -12%31-Dec-14 $1 206 0% R 13 680 10%
US$ ZAR10 Year Annualized Performance:
12% 20%
WHY OWN PHYSICAL GOLD?
GOLD AS THE CURRENCY OF THE BAD TIMES
In the good times gold is a commodity. In the bad times gold is a currency.
COMPETITOR TO CASH
We do not see gold as an alternative to shares, bonds or property but as an
alternative to holding cash in the bank
SOLVENCY
Physical gold is a safe haven as it has no counterparty or credit risk ie. It
cannot go broke
PORTFOLIO DIVERSIFIER
In the ‘bad times’ gold should be a component of investment portfolios so as
to reduce risk and to benefit from its outperformance of cash
WHY THE KRUGERRAND IS THE IDEAL INSTRUMENT
LEGAL TENDER STATUS– Underwritten by SARB
NO VAT PAYABLE– All other forms of Gold Subject to 14% VAT
PERFECT LIQUIDITY– SA Bullion has guaranteed buyback arrangement with SARB
MOST WIDELY RECOGNIZED GOLD COIN WORLDWIDE
RAND HEDGE
SHORTCOMINGS OF THE RETAIL CHANNEL FOR KRUGERRANDS
SUPPLY
FRICTION CHARGES
LOGISTICS
HAZARD
THE SA BULLION VALUE PROPOSITION
• Proprietary supply of Krugerrands per SARB dispensation
• Wholesale pricing arrangement with Rand Refinery Limited
• Vaulting agreement with Rand Refinery Limited
• Insurance arranged with Lloyds of London
• Buy-back agreement with SA Reserve Bank
“UNBROKEN CHAIN OF INTEGRITY”
PRODUCT:THE BULLIONGOLD FACILITY
• Seamless transition Cash->Gold->Cash• Lump sum or recurring debit order contributions• Forms and processes similar to standard unit trust practice• Monthly statements and reports• Wholesale pricing guarantees lowest acquistion costs• Upfront and ongoing fees• Online view of funds and fund flows• Physical delivery option
ASSET ALLOCATION
• Interest Rates are repressed and will
remain so
• Cash will remain a poor investment
• Gold presents a safer alternative to cash in
the bank
• Investment returns on Gold will likely
continue to outperform cash
• We advocate a position of 50% of the cash
component of a portfolio to be held in
physical gold – typically 5%
FINANCIAL ADVISOR
Role – Advisory / Distribution / Intermediation Remuneration (a ‘first’ on physical gold) Weekly Commission runs Statements and reports Online viewing of funds and fund flows Marketing materials and supporting presentations Forms Website Ease of administration Established via FSP Contract
FEES
SA BULLION IFA PLATFORM
THE BULLIONGOLD FACILITY SA BULLION IFA
INITIAL FEES 1% 0% - 3.5%
ONGOING FEES (p.a.) 1.5% 0.5%
EXIT FEES 0.0% 0.0%
Gold Mining Companies
Rand Refinery Limited& SA Mint
SA Bullion SA Bullion Financial Advisor
Extraction Manufacturing Wholesale/Retail Distribution & Sales
Department of Minerals & Energy
South African Reserve Bank Financial Services Board South Africa
The SA Bullion Gold Beneficiation Chain
www.sabullion.co.za