RAND WATER PROVIDENT FUND ANNUAL REPORT 2022-2023

Ms MS Nyembe Principal Officer

Foreword by Funding Manager

For the financial year ended 30 June 2023, the Rand Water Provident Fund delivered a solid investment result. This performance was underpinned by growth. over the 12-month period ending June 2023, the industrial sector led the way with a 34% return, while financials delivered 14%. Resources lagged with a 2.9% return. The local listed property sector was marginally positive in June. However, due to particularly weak patch a year ago, the 12-month return is ahead of cash at 8.9%. South African nominal bonds rebounded; May was one of the worst months since the inception of the All-Bond Index in 2000. The ALBI returned 4.6% in June, pulling year-to-date returns into positive territory at 2%, though still behind cash. The 12-month return is above cash at 8.2%, with the high level of interest income more than offsetting the recent capital volatility. Inflation-linked bonds were also positive, gaining 1.2% in the month and 1.1% over Mr ML Ncobela Funding Manager

Mr ML Ncobela Funding Manager

12 months. The rand also clawed back some lost ground, gaining 5% against the dollar to end June and the first half at R18.89 per dollar. The rand is still 13% weaker against the dollar over the past 12 months, providing a major boost to the returns of global assets from the point of view of South African investors. The Fund’s investment portfolios are suitably diversified and managed to optimise returns within our approved investment mandates. Asset allocation is managed and monitored by our multi-managers, while ensuring sufficient liquid funds are available to meet claims and other liabilities as they fall due. Given the nature of funds liabilities, a portion of our assets are invested in cash and money market instruments and quarterly rebalancing is performed. The fund earned a gross investment return of 12.2% for the 2022/23 Financial Year. This is how our different strategies performed over the year 2022/2023. Investment Returns

RW Inflation 5-7

RW Inflation 3-5

RW Inflation 1-3

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Returns

Target

12 Rand Water Provident Fund Annual Report | 2022-2023