PRIMEFLEXFact File

Contents

About this Fact FileThis Fact File sets out the details of the PrimeFlex, as well as the terms and conditions that apply.

If you need more informationYou can speak to your financial adviser, or contact us on 0860 67 5777.

YOUR CONTRIBUTIONS

TO THE INVESTMENT

Your contributions to the investment

Our PrimeFlex provides a sophisticated flexible investment while encapsulating simplicity and efficiency. Choose from a range of risk-profiled Discovery funds, specifically and carefully selected to meet your needs. These funds give you exposure to a diversified range of assets and one of the lowest administration fees available. In addition, if you are a member of Discovery Vitality Active Rewards, either through Vitality or Vitality Money, you will be eligible to be awarded Discovery Miles throughout the course of your investment.

Extra contributions

You cannot make extra contributions to your investment. If you want to invest more, we will start a new PrimeFlex for you.

You make a lump-sum contribution

For this investment you can only make a lump-sum contribution.

INVESTMENT FUNDS

Investment fundsA range of funds to choose from

We offer a simplified range of risk-profiled, managed funds that pairs simplicity with sophistication. The funds available on PrimeFlex provide a dynamic, managed portfolio to suit the needs of any client.

The Discovery Dynamic Asset Optimiser range caters to conservative, moderate and aggressive investors, accommodating all risk appetites. These funds give you exposure to a diverse blend of underlying Discovery funds – dynamically optimising the allocations in changing market conditions.

You can also choose the Discovery Global Multi-Asset Fund which invests flexibly in a globally diversified portfolio of assets to deliver strong returns.

The range of available funds to select may be updated from time to time. If you are invested in any funds that are removed, we will notify you that you need to switch into another fund.

FEES FOR THE INVESTMENT

Fees for the investmentAbout fees generally

There are initial fees and annual fees for this investment, payable to:

Discovery Invest for administering your investment

Your financial adviser for giving you financial advice

The investment managers of the funds you have chosen.

We facilitate payment to the different entities from your investment, so you don’t have to pay separately.

Before any changes in fees, we will tell you in writing. We will also let you know about the options available to you.

Initial fees

Financial adviser initial advice fee

Your financial adviser may charge an initial advice fee as a percentage of your contribution amount, which we will pay over to your financial adviser from your contributed amount. You can negotiate with your financial adviser to determine this fee.

100% allocation or upfront paymentYou can choose the 100% allocation option when making a lump-sum contribution into your investment, which means that although your financial adviser will be paid upfront, you avoid the initial fees to your financial adviser being deducted from your contribution upfront. The value of the fee is instead increased and paid in monthly instalments over the next five years. However, if you leave within the first five years, unpaid fees resulting from the 100% allocation will be charged on your investment.

The amount that you will have to pay over the five years is the financial adviser initial advice fee (including VAT if applicable) multiplied by 1.262. This is divided over 60 months and paid in level monthly instalments. If you choose this option, 100% of your initial contribution amount is allocated to the underlying investment options at the beginning of your investment.

How the initial fee calculation works

You and your financial adviser agree to a 2% financial adviser initial advice fee on a lump-sum investment of R75 000. This amounts to R1 725 (including VAT), which is deducted from your lump-sum contribution upfront. This leaves you with R73 275 (R75 000 minus R1 725) that would be invested into your underlying

fund choices.

What if you chose 100% allocation?

If you would rather pay the financial adviser initial advice fee over five years in monthly instalments so that your total contribution of R75 000 is invested into your underlying fund choices, then you should choose the 100% allocation option.

Under this option, the initial fee of R1 725 for your financial adviser will be multiplied by 1.262 and divided by 60 to determine your monthly instalments to be paid for five years:

R1 725 × 1.262 = R2 176.95, then R2 176.95 ÷ 60 = R36.28

So instead of paying R1 725 immediately, you will pay R36.28 a month for 60 months. If you withdraw your investment before the end of the 60 months, any unpaid remaining instalments will be deducted before you receive your investment value.

Please note: In this example, this fee will not change and will remain R36.28 for the entire 60 months.

Annual fees

Discovery Invest annual administration fee

There is an annual administration fee, calculated as a percentage of your investment value plus VAT. The percentage depends on the size of your investment. The percentages are set out in the table below:

Investment sizeAnnual

administration fee %

First R3 million 0.10%

Above R3 million 0.00%

This fee will be increased by 15% to offset VAT expenses, divided by 12 and charged monthly.

Financial adviser annual advice fee

Your financial adviser may also charge an annual advice fee as a percentage of your investment value plus VAT. The fee is divided by 12 and deducted from your investment monthly. We pay the fees to your financial adviser.

EXAMPLE

Investment manager annual fee

Investment managers charge an annual management fee as a percentage of your investment in their fund. This fee is divided by 365 and deducted daily in the unit prices of the fund. The annual fees are set out in the fund fact sheets.

Switch fees

You may switch between investment options at any time, according to our business practice at the time of the switch. Please refer to our Business Practice Manual at www.discovery.co.za.

Currently, we allow four free switches a year. The fee for any extra switches is 0.25% (plus VAT) of the value switched, capped at a maximum of R500 for each transaction. We may change this fee from time to time.

Early exit fees

An exit fee may apply to your investment in the case of early withdrawal. If you withdraw your funds within the first three years of your investment, the early exit fee of 0.45% plus VAT will be payable on the amount withdrawn. There will be no early exit fee thereafter.

Fee reviews

Fees may change. Before making any changes, we will inform you in writing about the changes as well as the options available to you.

TAX ON YOUR INVESTMENT

Tax on your investmentYour contributions to the investment are not tax deductible.

You must pay tax on the investment growth according to your rate of tax. We will issue you with income tax certificates (IT3B and IT3C) for this purpose. It is your responsibility to pay the tax on any investment growth. We are currently required to withhold dividends tax at a rate of 20%.

If you die while invested in a Flexible Investment

If you die while you are invested, we will pay your investment value less any remaining fees to your estate and your executor will distribute the money according to your will.

DISCOVERY MILES

Current guideline for Miles awards each year depending on your Vitality Money status

None or Blue Bronze Silver Gold Diamond

1 Mile per R160 initially invested1 Mile per R120 initially invested

1 Mile per R80 initially invested

1 Mile per R40 initially invested

1 Mile per R20 initially invested

Discovery Miles As a PrimeFlex client, you will become eligible to be awarded Discovery Miles during the course of your investment. Discovery Miles are determined at the discretion of Discovery and the current guideline is 1 Mile for every R20 invested.

The first award will be made three months after your investment start date. Thereafter, each year, you will have the opportunity to be awarded additional Miles for staying invested with Discovery in the PrimeFlex depending on your Vitality Money status.

You will be eligible for the Miles awards for as long as you remain invested in the PrimeFlex and you are a member of the Vitality Active Rewards programme either as a member of Vitality or Vitality Money. The Miles do not constitute a return on your investment and are independent from any interest you may earn. Standard terms and conditions relating to the rules and expiry of Discovery Miles will apply. The guidelines for Miles awards are at the discretion of Discovery and may be updated from time to time.

If you make a withdrawal from your investment, the number of Discovery Miles you are eligible to be awarded will reduce proportionally.

John invests R2 000 000 in the PrimeFlex, and becomes eligible to be awarded Discovery Miles during the course of his investment. Based on his investment amount and as a member of the Vitality Active Rewards programme, the guideline of 1 Mile for every R20 invested will apply.

Using these guidelines, John will be awarded 100 000 Discovery Miles after three months.

Every year thereafter, John will have the opportunity to be awarded more Discovery Miles for staying invested with Discovery. This will depend on his Vitality Money Status and is at Discovery’s discretion.

EXAMPLE

IMPORTANT INFORMATION

Important InformationThe manager

Discovery Life Collective Investments (Pty) Ltd, branded as Discovery Invest, is the manager of the Fund. Discovery Invest is a member of the Association of Savings and Investment South Africa (ASISA).

Issuing instructions to us

You must give us instructions in writing and use the correct form. You can ask for the forms by emailing invest_support@discovery.co.za or calling us on 0860 67 57 77. We may need extra supporting documents. Email written instructions to us at invest_support@discovery.co.za.

Regular statements

We will provide a quarterly statement reflecting your investment values and all transactions during a specified period (or previous quarter).

Information you need to know about your investment

PrimeFlex is offered through Discovery Life Investments (Pty) Ltd, an Administrative FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS).

CIS DISCLOSURES

CIS disclosuresRisks (portfolio specific)

Derivatives

There is no assurance that a portfolio’s use of a derivative strategy will succeed. A portfolio’s management may employ a sophisticated risk management process, to oversee and manage derivative exposures within a portfolio, but the use of derivative instruments may involve risks different from, and, in certain cases, greater than, the risks presented by the securities from which they are derived.

Exposure to foreign securities

Foreign securities within portfolios may have additional material risks, depending on the specific risks affecting that country, such as: potential constraints on liquidity and the repatriation of funds; macroeconomic risks; political risks; foreign exchange risks; tax risks; settlement risks; and potential limitations on the availability of market information. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. Investors are reminded that an investment in a currency other than their own may expose them to a foreign exchange risk.

Money market portfolios

A money market portfolio is not a bank deposit account. A constant price (CNAV) is applied to a participatory interest. The total return to the investor is made up of interest received and any gain or loss made on any particular instrument, and in most cases the return will merely have the effect of increasing or decreasing the daily yield, but in the case of abnormal losses, it can have the effect of reducing the capital value of the portfolio. Excessive withdrawals from the portfolio may place the portfolio under liquidity pressures, and in such circumstances a process of ring-fencing of withdrawal instructions and managed pay-outs over time may be followed.

Fund of funds

A fund of funds is a portfolio that invests in portfolios of collective investment schemes (unit trusts) that levy their own charges, which could result in a higher fee structure for the fund of funds.

Feeder funds

A feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges and which could result in a higher fee structure for the feeder fund.

Drawdown

The potential magnitude of loss - the largest peak-to-trough decline in returns over the period, also known as the maximum drawdown.

Liquidity

The risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).

Equities

The value of equities may vary according to company profits and future prospects, as well as more general market factors. In the event of a company default, the owners of their equity rank last in terms of any financial payment from that company.

Bonds

The value of fixed income investments (e.g. bonds) tends to decrease when interest rates and/or inflation rises. Bonds issued by major governments and companies, will be more stable than those issued by emerging markets or smaller corporate issuers. If an issuer experiences financial difficulty, there may be a risk to some, or all, of the capital invested. Any historical or current yields quoted should not be considered reliable indicators of future performance.

For a detailed description of these risks, and other risks that are relevant to the portfolio, please refer to the CIS risk disclosure document, available on the website:

http://www.discovery.co.za/assets/discoverycoza/corporate/risk-disclosure.pdf

General

Collective Investment Schemes (unit trusts) are generally medium to long-term investments. The value of participatory interests (units) or the investment may go down as well as up. Past performance is not necessarily a guide to future performance. Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending (i.e. borrowing and lending of assets). The manager does not provide any guarantee, either with respect to the capital or the return of a portfolio. Any forecasts and/or commentary in this document are not guaranteed to occur. Different classes of participatory interests apply to these portfolios and are subject to different fees and charges. A schedule of all fees and charges, inclusive of VAT and maximum commissions, is available on request from us or from your financial adviser. Forward pricing is used.

Redemptions

The collective investment scheme may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. The ability of the portfolio to repurchase, is dependent upon the liquidity of the securities and cash of the portfolio. A manager may suspend repurchases for a period, subject to regulatory approval, to await liquidity, and the manager must keep the investors informed about these circumstances.

Yields

The yield for bond, income and money market portfolios

is historic and is calculated quarterly.

Prices

The latest prices and TERs are published daily in the Business Report (South Africa’s National Financial Daily) and are made available on our website www.discovery.co.za.

Performance fees

Performance fees are not levied on the portfolios.

Performance returns

Lump-sum performance returns are being quoted. Income distributions, prior to deduction of applicable taxes, are included in the performance calculations. NAV to NAV figures have been used for the performance calculations, as calculated by the Manager at the valuation point defined in the deed, over all reporting periods. Investment performance calculations are available for verification upon request by any person. Reinvestment of income is calculated on the actual amount distributed per participatory interest, using the ex-dividend date NAV price of the applicable class of the portfolio, irrespective of the actual reinvestment date. The performance is calculated for the fee class. The individual investor performance may differ, as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. The rate of return is calculated on a total return basis, and the following elements may involve a reduction of the investor’s capital: interest rates, economic outlook, inflation, deflation, economic and political shocks or changes in economic policy. Annualised returns are period returns re-scaled to a period of one year. This allows investors to compare returns of different assets that they have owned for different lengths of time. All period returns greater than one year have been annualised. Returns for periods less than one year have not been annualised. A cumulative return is the aggregate amount an investment has gained or lost over time, independent of the period of time involved. Actual annual figures are available to the investor on request. Illustrative investment performance is for illustrative purposes only.

Valuations and transaction cut-off times

Pricing date is daily, except weekends and public holidays. Valuation point is at 16h00 on each pricing date, except at month-end, where it will be at 17h00. Offers to repurchase participatory interests must be received by 16h00 on each

pricing date.

Additional information

For additional information on the portfolio, refer to the following documents, available on our website, from your financial adviser, or on request from the manager, free of charge.

Application forms

Annual report

Fee schedule

Quarterly General Investor Report

Complaints and conflicts of interest

The complaints policy and procedure, as well as the conflicts of interest management policy, are available on our website www.discovery.co.za. Associates of the manager may be invested within certain portfolios, and the details thereof are available from the manager.

Closure of the portfolio

The manager has the right to close certain portfolios to new investors, in order to manage them more efficiently, in accordance with their mandates.

Contact details

CIS Manager

Discovery Life Collective Investments (Pty) Ltd, registration number 2007/008998/07, 1 Discovery Place, Sandton, 2196, www.discovery.co.za. The manager is registered as a manager of collective investment schemes, in terms of the Collective Investment Schemes Control Act. The manager, through Discovery Holdings Limited, is a member of the Association for Savings and Investment South Africa (ASISA).

Trustee

Standard Chartered Bank (Johannesburg Branch), registration number 2003/020177/10, 2nd Floor,115 West Street, Sandton, 2196, P O Box 782080, Sandton, 2146, www.standardchartered.com/za. The trustee is registered as a trustee of collective investment schemes, in terms of the Collective Investment Schemes Control Act.

Investment Manager of the Discovery Aggressive Dynamic Asset Optimiser Fund of Funds, Discovery Conservative Dynamic Asset Optimiser Fund of Funds, and the Discovery Moderate Dynamic Asset Optimiser Fund of Funds

RisCura Invest (Pty) Ltd, registration Number 2009/015999/07, FSP number 40909, Monclare Place, corner Campground & Main Road, Claremont, Cape Town, P O Box 23983, Claremont, 7735, 021 6736999.

Investment Manager of all other portfolios

Ninety One SA (Pty) Ltd, registration number 1984/011235/07, FSP number 587, 36 Hans Strijdom Avenue, Foreshore, Cape Town, 8001, www.ninetyone.com, 0860 110 161.

The investment managers are authorised financial services providers (FSP), as discretionary FSPs, in terms of Section 8 of the Financial Advisory and Intermediary Services Act (FAIS). This information is not advice, as defined in FAIS. Please be advised that there may be representatives acting under supervision.

The Fact File is part of Discovery Invest’s commitment to fairness and full compliance with legal requirements for financial service providers to provide detailed easy-to-understand information about how each product works. Each investor must consult their own financial adviser who must be an authorised financial services provider to advise the investor as to the suitability of the products and funds for the investor’s personal investment needs.

Discovery Life Investment Services Pty (Ltd): Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06, a licensed life Insurer, an authorised financial service provider and registered credit provider, NCR Reg No. NCRCP3555. All boosts are offered through the insurer, Discovery Life Limited. The insurer reserves the right to review and change the qualifying requirements for boosts at any time. Product Rules, Terms and Conditions apply.

Discovery Vitality (Pty) Ltd. Registration number: 1999/007736/07. Terms, conditions and limits apply.

Discovery Bank Limited. Registration number 2015/408745/06. An authorised financial services and registered credit provider. FSP number 48657. NCR registration number NCRCP9997. Limits, Terms and conditions apply.

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