1 global investment management Harmony portfolios review & market update Glyn Owen September 2012.

1global investment management

Harmony portfolios review & market update

Glyn Owen

September 2012

2 global investment management

1. Harmony portfolios update


Introduction to Harmony portfolios

• Risk profiled core solutions: Balanced and Growth

• Multi-asset, multi-manager, multi-currency

• Diversified between local and global investments, asset class, currency, manager and style

• Dynamic tactical asset allocation

• Available in five currency / regional bases: USD, GBP, EUR, AUD and Asian

• The Harmony range uses no derivatives, structured products or CDOs

• Managed by Momentum Global Investment Management in London


Harmony Balanced Fund strategic allocation

Source: MGIM, September 2012

Global Equity10.0%

Local Equity30.0%

Global Bonds10.0%

Local Bonds30.0%

Global Property10.0%

Cash10.0%


Harmony Growth Fund strategic allocation


Global Equity15.0%

Local Equity50.0%

Global Bonds5.0%

Local Bonds15.0%

Global Property10.0%

Cash5.0%


Summary performance August 2012

Source: MGIM, Lipper Hindsight, September 2012. Past performance is not indicative of future returns.

3 months Year to dateBenchmark year

to datePeer rank

year to date

Harmony Asian Balanced 3.2% 5.1% 7.3% 8/17

Harmony Asian Growth 4.5% 6.5% 8.8% 6/17

Harmony AUD Growth 3.1% 7.5% 8.9% 7/16

Harmony Euro Balanced 4.4% 7.9% 9.7% 4/10

Harmony Sterling Balanced 4.0% 4.4% 5.9% 16/26

Harmony Sterling Growth 5.9% 5.1% 7.0% 16/22

Harmony US Dollar Balanced 4.0% 5.6% 8.1% 6/16

Harmony US Dollar Growth 5.4% 7.4% 10.7% 2/16


Harmony US Dollar Balanced asset allocation


Equity26.0% Equity

22.0%

Equity31.0%

Equity33.1%

Equity41.3% Equity

38.5%

Equity40.0%

Fixed Income31.0% Fixed Income

34.0%


40.0%

Fixed Income31.3%

Fixed Income36.2%

Fixed Income40.0%

Alt. Investments24.0%




Property11.0%

Property4.0%

Property11.0%

Property9.5%

Property10.8%

Property7.6%

Property10.0%

Cash8.0%

Cash15.0%

Cash4.0%

Cash13.5% Cash

16.6%Cash17.8%

Cash10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Aug-12 Benchmark


Harmony US Dollar Balanced currency allocation


USD79.0%

USD92.0%

USD71.0%

USD78.9%

USD77.8%

USD83.8%

USD82.8%

EUR7.0%

EUR1.0%

EUR9.0%

EUR7.2% EUR

7.1%

EUR5.5%

EUR6.3%

GBP 1.0%

GBP 4.0%

GBP 3.0%

GBP 3.0% GBP 3.2%GBP 2.0%

GBP 3.1%JPY 5.0%

JPY 7.0%

JPY 4.4%JPY 2.3%

JPY 1.4%JPY 3.2%

Other 8.0%Other 3.0%



Other 4.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Balanced peer group analysis

September 2012. Past performance is not indicative of future returns. . *30/06/2005 to 30/12/2005

3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony US Dollar Balanced Peer Rank 7/16 6/16 6/16 7/14 4/14 7/11 3/10 2/10 4/10

Fund Performance 4.0% 5.6% -1.5% 5.6% 20.0% -27.2% 6.7% 13.2% 4.7%

Peer Max 5.5% 7.6% 1.6% 12.2% 25.2% -6.7% 7.8% 13.5% 14.2%

Peer Min -2.1% 0.5% -9.2% -0.9% -0.7% -36.2% 2.1% 5.0% 0.8%

Peer Median 3.5% 5.1% -4.1% 5.4% 15.6% -23.4% 4.7% 8.5% 3.4%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*


Harmony US Dollar Balanced manager performance

Source: MGIM, Bloomberg , September 2012

Returns in US dollar Weight 3 months 6 months 12 months

Equity

Momentum Global Equity 7.6% 9.6% -0.9% 7.6%

Morgan Stanley Global Brands 1.6% 8.8% 2.6% 10.3%

BlackRock US Index 5.5% 7.9% 3.9% 17.6%

Heptagon Yacktman US Equity 8.5% 6.0% 2.8% 10.4%

Skandia Global Funds US Value 5.4% 5.5% -2.6% 13.8%

Wells Fargo US All Cap Growth 8.6% 7.2% 2.4% 20.4%

Global Emerging Markets 1.1% 6.1% -13.2% -13.5%

Fixed Income

RWC Global Convertibles 8.0% 4.1% -0.3% 4.6%

Old Mutual Dublin Global Bond 9.7% 2.7% 2.7% 6.3%

BlackRock US Dollar High Yield Bond 5.2% 4.9% 4.1% 13.5%

BlackRock US Corporate Bond Index 5.8% 3.2% 4.2% 8.2%

Property

Cohen & Steers Global Real Estate 7.6% 9.4% 4.5% 8.7%


Harmony US Dollar Growth asset allocation


Equity49.0%

Equity35.0%

Equity51.0%

Equity53.3%

Equity65.3% Equity

62.0%

Equity65.0%

Fixed Income15.0%

Fixed Income28.0%

Fixed Income27.0%

Fixed Income25.2%

Fixed Income17.4%

Fixed Income22.2%

Fixed Income20.0%

Alt. Investments25.0% Alt. Investments

24.0%



Property9.0%

Property4.0%

Property13.0%

Property9.9% Property

10.3%Property

7.6%

Property10.0%

Cash2.0%

Cash9.0%

Cash2.0% Cash

4.4% Cash7.0%

Cash8.2%

Cash5.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Growth currency allocation


USD80.0%

USD88.0%

USD69.0% USD

64.2%

USD68.6%

USD83.2% USD

76.8%

EUR 10.0%

EUR 1.0%

EUR 9.0%

EUR 10.6%

EUR 9.6%

EUR 5.2%

EUR 8.9%

GBP 2.0%GBP 7.0%

GBP 5.0%GBP 6.5%

GBP 4.8%

GBP 2.4%GBP 4.4%

JPY 4.0%

JPY 5.0%JPY 5.1% JPY 3.4%

JPY 1.8% JPY 4.6%

Other 4.0% Other 4.0%

Other 12.0% Other 13.7% Other 13.6%


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Growth peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony US Dollar Growth Peer Rank 3/16 2/16 3/16 6/14 3/14 9/11 3/10 1/10 4/10


Peer Max 5.5% 7.6% 1.6% 12.2% 25.2% -6.7% 7.8% 13.5% 14.2%

Peer Min -2.1% 0.5% -9.2% -0.9% -0.7% -36.2% 2.1% 5.0% 0.8%

Peer Median 3.5% 5.1% -4.1% 5.4% 15.6% -23.4% 4.7% 8.5% 3.4%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*


Harmony US Dollar Growth manager performance

Source: MGIM, Bloomberg September 2012.


Equity

Artisan Global Value 4.7% 10.0% 4.5% 15.2%



BlackRock US Index 9.5% 7.9% 3.9% 17.6%

Heptagon Yacktman US Equity 14.6% 6.0% 2.8% 10.4%

Skandia Global Funds US Value 9.6% 5.5% -2.6% 13.8%

Wells Fargo US All Cap Growth 14.3% 7.2% 2.4% 20.4%

Global Emerging Markets 1.8% 6.1% -13.2% -13.5%

Fixed Income




BlackRock US Corporate Bond Index 3.2% 3.2% 4.2% 8.2%

Property



Harmony performance vs. cash, bonds and equities

Source: MGIM, Lipper, September 2012. Past performance is not indicative of future returns..

80

85

90

95

100

105

Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

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Citigroup WorldBIG TR USD LIBOR USD 7 Day MSCI World TR USD US Dollar Growth US Dollar Balanced


Harmony Sterling Balanced asset allocation


Equity27.0%

Equity17.0%

Equity30.0%

Equity31.0%

Equity42.9% Equity

37.6%

Equity40.0%

Fixed Income31.0%

Fixed Income44.0%

Fixed Income44.0%

Fixed Income41.6%


37.0%

Fixed Income40.0%




3.3%

Property11.0%

Property5.0%

Property10.0%

Property8.9% Property

10.3%Property

6.9%

Property10.0%

Cash10.0%

Cash18.0%

Cash11.0% Cash

15.2%Cash16.5%

Cash18.4%

Cash10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Sterling Balanced asset allocation


USD19.0%

USD30.0%

USD12.0%

USD16.4%

USD21.9%

USD22.6%

USD15.6%

EUR4.0%

EUR5.0%

EUR11.0%

EUR8.9%

EUR6.0%

EUR2.9%

EUR5.3%

GBP65.0%

GBP61.0%

GBP67.0%

GBP65.7%

GBP65.1%

GBP69.7%

GBP71.7%

JPY 4.0% JPY 1.0% JPY 1.2%JPY 1.3%

JPY 0.9%JPY 3.1%


Other 9.0%Other 7.8% Other 5.7% Other 3.8% Other 4.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Sterling Balanced peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony Sterling Balanced Peer Rank 14/26 16/26 14/26 20/24 16/24 8/23 9/20 6/17 3/14


Peer Max 6.8% 13.4% 6.5% 17.6% 44.6% 2.7% 14.6% 12.1% 14.8%

Peer Min -2.1% -5.7% -9.0% -0.6% 6.3% -31.5% -2.0% 0.6% 3.5%

Peer Median 4.2% 6.0% -2.1% 8.6% 16.4% -17.5% 1.6% 6.3% 5.8%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*


Harmony Sterling Balanced manager performance


Returns in GBP 3 months 6 months 12 months

Equity



BlackRock UK Index 4.3% 8.6% -0.3% 10.1%

RWC UK Income Opportunities 17.8% 7.7% 6.7% 14.2%

Schroder UK Recovery 8.0% 10.4% 1.9% 17.8%

Momentum Global Emerging markets 1.3% 3.1% -12.8% -11.3%

Fixed Income

RWC Global Convertibles 8.3% 1.2% 0.1% 7.3%



BlackRock UK Corp Bond 5.7% 5.1% 7.0% 12.8%

Blackrock GiltTrak 5.6% 0.8% 4.6% 12.2%

M&G European Loan Fund 0.0% 0.4% -0.3% 0.0%

Property



Harmony Sterling Growth asset allocation


Equity45.0%

Equity28.0%

Equity49.0%

Equity49.2%

Equity66.9% Equity

62.3%

Equity65.0%

Fixed Income18.0%

Fixed Income30.0%


22.0%


20.9%

Fixed Income20.0%





Property26.0%

Property20.0%

Property5.0%

Property7.6%

Property9.9%

Property7.0%

Property10.0%

Cash3.0%

Cash19.0%

Cash6.0%

Cash19.1%

Cash7.3% Cash

9.8%

Cash5.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Sterling Growth currency allocation


USD21.0%

USD41.0%

USD17.0%

USD15.8%

USD21.5% USD

18.0%USD

16.0%

EUR6.0%

EUR5.0%

EUR9.0% EUR

9.0%

EUR8.7%

EUR2.9% EUR

4.4%

GBP64.0%

GBP50.0%

GBP61.0%

GBP65.6%

GBP60.9% GBP

73.0%GBP

71.8%

JPY 3.0%

JPY 1.0%JPY 1.3%

JPY 2.0%JPY 1.2% JPY 2.6%

Other6.0%

Other4.0%

Other12.0%

Other8.4%

Other6.9%

Other4.9%

Other5.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Sterling Growth peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony Sterling Growth Peer Rank 4/22 16/22 6/22 18/20 12/20 1/18 9/15 4/15 7/13


Peer Max 6.2% 8.9% -0.3% 15.6% 27.5% -16.4% 10.9% 14.1% 15.0%

Peer Min -2.1% 1.0% -18.7% -0.6% 6.9% -30.2% 0.2% 5.1% 5.2%

Peer Median 4.9% 6.3% -6.5% 12.3% 18.9% -20.1% 4.4% 8.9% 10.8%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*


Harmony Sterling Growth manager performance


Returns in GBP 3 months 6 months 12 months

Equity



BlackRock UK Index 15.1% 8.6% -0.3% 10.1%

RWC UK Income Opportunities 18.2% 7.7% 6.7% 14.2%

Schroder UK Recovery 14.9% 10.4% 1.9% 17.8%

Momentum Global Emerging markets 1.9% 3.1% -12.8% -11.3%

Fixed Income

RWC Global Convertibles 4.5% 1.2% 0.1% 7.3%



BlackRock UK Corp Bond 3.6% 5.1% 7.0% 12.8%

Blackrock GiltTrak 2.7% 0.8% 4.6% 12.2%

Property




Source: MGIM , Lipper, September 2012. Past performance is not indicative of future returns..

80

85

90

95

100

105

110

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120

125


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LIBOR GBP 7 Day JP Morgan UK GBI TR FTSE All Share Sterling Growth Sterling Balanced


Harmony Asian Balanced asset allocation


Equity24.0%

Equity23.0%

Equity31.0%

Equity33.2%

Equity42.1% Equity

38.1%

Equity40.0%

Fixed Income35.0%

Fixed Income47.0%

Fixed Income47.0%

Fixed Income32.5%

Fixed Income31.1%

Fixed Income38.6%

Fixed Income40.0%





Property 10.0%

Property 3.0%

Property 5.0%

Property 9.9%Property 10.5%

Property 7.3%

Property 10.0%

Cash 14.0%

Cash 3.0%

Cash 9.0%

Cash 19.4%Cash 16.3% Cash 16.0%

Cash 10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Asian Balanced currency allocation


USD60.0%

USD79.0%

USD52.0%

USD61.9%

USD26.8% USD

22.0%

USD25.6%

EUR 5.0%

EUR 2.0%

EUR 7.0%

EUR 4.3%

EUR 3.8%

EUR 3.8%

EUR 5.3%

GBP 1.0%

GBP 1.0%

GBP 3.0%

GBP 2.4%

GBP 2.1%

GBP 1.9%

GBP 1.7%

JPY 2.0% JPY 11.0%

JPY 4.1%

JPY 4.0%

JPY 3.8%

JPY 3.1%

Other32.0%

Other18.0%

Other27.0%

Other27.2%

Other63.3% Other

68.4%

Other64.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Asian Balanced peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006*

Harmony Asian Balanced Peer Rank 9/17 8/17 5/16 9/11 8/8 2/6 4/5 3/5

Fund Performance 3.2% 5.1% -8.1% 8.3% 17.0% -24.1% 10.9% 2.6%

Peer Max 10.3% 12.7% -1.9% 20.6% 65.1% -19.5% 40.3% 4.2%

Peer Min -1.4% -8.1% -21.9% 0.1% 22.3% -47.4% 9.7% 1.7%

Peer Median 3.0% 3.5% -11.9% 12.5% 33.3% -31.9% 24.0% 2.6%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006*


Harmony Asian Balanced manager performance



Equity




Polar Capital Japan (USD hedged) 2.6% 1.1% -14.0% -5.4%

Aberdeen Australasian Equity 1.7% 14.7% 1.1% 3.7%

Firth Asian Smaller Companies Class 1 3.3% 6.5% -1.5% 4.0%

Momentum Global Emerging markets Fund 1.3% 6.1% -13.2% -13.5%

Tiburon Taipan 17.8% 1.4% -11.5% -11.1%

Fixed Income


BGF USD High Yield Bond Hedged A2 SGD 4.3% 8.2% 3.9% 8.9%


RWC Asia Convertibles B USD 9.0% 3.9% 0.5% 1.8%

Pictet-Asian Local Currency Debt-I USD 13.9% 3.6% -0.3% 2.3%

Property

Cohen & Steers Global Real Estate USD 7.3% 9.4% 4.5% 8.7%


Harmony Asian Growth asset allocation


Equity38.0%

Equity31.0%

Equity50.0%

Equity54.0%

Equity65.7%

Equity63.6%

Equity65.0%

Fixed Income19.1%

Fixed Income33.0%

Fixed Income28.0%

Fixed Income25.0%

Fixed Income16.9%

Fixed Income22.0%

Fixed Income20.0%





Property 7.5%

Property 2.0%

Property 5.0%Property 10.0% Property 10.7%

Property 8.1% Property 10.0%

Cash 12.6%

Cash 2.0%

Cash 9.0%Cash 7.0% Cash 6.7% Cash 6.4% Cash 5.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Asian Growth currency allocation


USD51.5%

USD77.0%

USD46.0%

USD44.0%

USD21.4% USD

18.0%

USD21.0%

EUR 5.1%

EUR 2.0%

EUR 6.0%

EUR 6.0%

EUR 5.3%

EUR 4.0%EUR 4.4%

GBP 0.8%

GBP 10.0%

GBP 5.0%

GBP 4.0%

GBP 2.9%

GBP 2.3%

GBP 1.8%

JPY 3.4%JPY 3.0%

JPY 3.0%

JPY 6.9%

JPY 6.3%JPY 2.6%

Other39.3%

Other11.0%

Other40.0% Other

43.0%

Other63.5% Other

69.5%Other70.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Asian Growth peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006*

Harmony Asian Growth Peer Rank 7/17 6/17 5/16 8/11 6/8 3/6 3/5 2/5

Fund Performance 4.5% 6.5% -9.2% 11.1% 26.4% -29.0% 16.4% 3.2%

Peer Max 10.3% 12.7% -1.9% 20.6% 65.1% -19.5% 40.3% 4.2%

Peer Min -1.4% -8.1% -21.9% 0.1% 22.3% -47.4% 9.7% 1.7%

Peer Median 3.0% 3.5% -11.9% 12.5% 33.3% -31.9% 24.0% 2.6%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006*


Harmony Asian Growth manager performance



Equity




Polar Capital Japan (USD hedged) 4.8% 1.1% -14.0% -5.4%


Firth Asian Smaller Companies Class 1 4.4% 6.5% -1.5% 4.0%


Tiburon Taipan 18.3% 1.4% -11.5% -11.1%

Fixed Income


BGF USD High Yield Bond Hedged A2 SGD 4.3% 8.2% 3.9% 8.9%

RWC Asia Convertibles B USD 7.8% 3.9% 0.5% 1.8%

Pictet-Asian Local Currency Debt-I USD 4.9% 3.6% -0.3% 2.3%

Property





70

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HSBC Asia Local Bond TR LIBOR USD 7 Day MSCI AC Asia Pacific ex Japan NR USD Asian Growth Asian Balanced


Harmony Euro Balanced asset allocation


Equity26.0% Equity

22.0%

Equity30.0%

Equity34.0%

Equity36.4%

Equity38.4%

Equity40.0%

Fixed Income31.0%

Fixed Income38.0%

Fixed Income43.0%

Fixed Income42.4%

Fixed Income38.2%

Fixed Income38.9%

Fixed Income40.0%





2.8%

Property 11.0% Property 1.0%Property 10.0% Property 10.0% Property 11.2%

Property 6.9%

Property 10.0%

Cash13.0% Cash

18.0%

Cash12.0%

Cash11.1%

Cash11.4% Cash

15.9%

Cash10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Euro Balanced currency allocation


USD19.0%

USD12.0%

USD13.0%

USD22.6%

USD28.8%

USD18.4% USD

15.6%

EUR68.0% EUR

76.0%EUR

75.0%

EUR63.5%

EUR56.4% EUR

72.2% EUR75.3%

GBP 1.0%GBP 5.0% GBP 3.0%

GBP 4.1% GBP 4.6%

GBP 4.4% GBP 1.7%JPY 4.0%JPY 1.0% JPY 1.4% JPY 1.5%

JPY 0.8%JPY 3.1%

Other 8.0% Other 7.0% Other 8.0% Other 8.5% Other 8.7%Other 4.2% Other 4.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony Euro Balanced peer group analysis


3 months YTD 2011 2010 2009 2008 2009 2008 2007*

Harmony Euro Balanced Peer Rank 3/10 4/10 9/10 2/10 2/10 8/9 2/8 1/6 2/6


Peer Max 7.8% 16.6% 0.0% 13.9% 61.5% -4.9% 4.5% 6.5% 1.6%

Peer Min 0.5% 0.0% -6.1% 0.1% 6.8% -30.2% -3.2% 1.2% 0.5%

Peer Median 3.5% 7.2% -1.8% 3.6% 11.3% -8.9% -0.3% 3.6% 1.1%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2009 2008 2007*


Harmony Euro Balanced manager performance


Returns in Euros Weight 3 months 6 months 12 months

Equity

Momentum Global Equity 6.2% 7.8% 5.3% 23.4%

Henderson European Special Situations 14.4% 9.3% 5.6% 18.6%

Jupiter European Special Situations 16.4% 8.4% 2.7% 14.6%

Momentum Global Emerging Markets 1.4% 4.4% -7.7% -0.9%

Fixed Income

Old Mutual Dublin Global Bond (Eur) 10.4% 2.6% 2.5% 6.9%


Threadneedle European High Yield Bond 5.9% 6.3% 4.7% 14.5%

BlackRock Euro Corporate Bond Index 4.9% 2.2% 4.3% 8.5%

BlackRock Euro Government Bond Index 6.1% 1.5% 2.5% 6.3%

Property





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80

85

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95

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105

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115


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to 1

00 (

Jun-

2011

)

LIBOR EUR 7 Day JP Morgan European GBI TR MSCI Europe ex UK Euro balanced


Harmony AUD Growth asset allocation


Equity45.0%

Equity31.0%

Equity32.0%

Equity51.5%

Equity61.4%

Equity62.6%

Equity65.0%

Fixed Income9.0%

Fixed Income37.0%

Fixed Income38.0%

Fixed Income20.7%

Fixed Income18.0%

Fixed Income21.3%

Fixed Income20.0%



Alt. Investments10.0%Property

20.0%

Property10.0%

Property5.0%

Property7.2%

Property10.6%

Property6.9%

Property10.0%

Commodities8.0%

Cash 17.0% Cash 15.0%Cash 20.6%

Cash 10.0% Cash 9.2%Cash 5.0%

Asset Allocation10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony AUD Growth currency allocation


USD28.0%

USD37.0% USD

33.0%

USD17.4%

USD16.0%

USD17.1%

USD16.0%

EUR 12.0%

EUR 1.0%EUR 5.0%

EUR 4.4% EUR 6.0% EUR 5.5%EUR 4.4%

GBP 1.0%

GBP 11.0%GBP 7.0%

GBP 4.3% GBP 2.6%GBP 5.0%

GBP 1.8%

AUD49.0%

AUD48.0% AUD

52.0%

AUD64.8%

AUD66.0%

AUD52.1%

AUD71.8%

Other 10.0%



Other 20.3%

Other 6.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony AUD Growth peer group analysis


3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony AUD Growth Peer Rank 9/16 7/16 8/16 5/10 6/10 5/10 5/9 5/9 1/9

Fund Performance 3.1% 7.5% -6.0% -0.3% 11.7% -15.5% 7.2% 10.9% 5.3%

Peer Max 10.0% 13.0% 12.6% 5.3% 43.1% 16.0% 25.1% 24.8% 4.2%

Peer Min 0.3% 1.8% -13.0% -4.8% -0.8% -42.9% 1.5% 1.3% 1.0%

Peer Median 3.6% 6.4% -10.0% -0.5% 32.2% -30.0% 9.7% 12.7% 2.6%

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*


Harmony AUD Growth manager performance


Returns in AUD Weight 3 months 6 months 12 months

Equity


Momentum Global Equity 7.0% 3.3% 3.4% 11.7%




Tiburon Taipan 6.9% -4.4% -7.6% -7.7%

Fixed Income

UBS Lux Bond (AUD) 7.0% 0.5% 7.0% 10.3%

Old Mutual Dublin Global Bond 3.2% -3.2% 7.2% 10.3%

BGF USD High Yield Bond Hedged 4.2% 5.6% 5.8% 17.4%

RWC Asia Convertibles B USD 4.9% -2.1% 4.9% 5.6%

Property




Source: MGIM , Lipper, September 2012. Past performance is not indicative of future returns..

75

80

85

90

95

100

105

110

115

120


Reb

ased

to 1

00 (

Jun-

2011

)

LIBOR AUD 7 Day JP Morgan Australia GBI TR ASX All Ordinaries TR AUD Growth


2. Market review


0

20

40

60

80

100

120

140

160

Jan 00

Jun 00

Nov 00

Apr 01

Sep 01

Feb 02

Jul 02

Dec 02

May 03

Oct 03

Mar 04

Aug 04

Jan 05

Jun 05

Nov 05

Apr 06

Sep 06

Feb 07

Jul 07

Dec 07

May 08

Oct 08

Mar 09

Aug 09

Jan 10

Jun 10

Nov 10

Apr 11

Sep 11

Feb 12

Jul 12

Ind

ex le

vel r

ebas

ed to

100

MSCI Daily TR Net World USD

This century has been bad for equity investing……

Source: Bloomberg, September 2012

+15.0%


……but not for government bonds


0

1

2

3

4

5

6

Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12

Yie

ld %

US Generic Govt 10 Year Yield

+122.5%


Asset class returns YTD 2012, USD terms

Source: Bloomberg, Returns to 11/09/2012, September 2012

13.4%

11.8% 11.7%

8.9%

7.5%7.5%

2.9%

0.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Global developed

marketequities

High yield Convertibles Global emerging marketsequities

Investment grade

fixed income

Loans Global Government

bonds

Cash


0

20

40

60

80

100

120

140

Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Jul 10

Sep 10

Nov 10

Jan 11

Mar 11

May 11

Jul 11

Sep 11

Nov 11

Jan 12

Mar 12

May 12

Jul 12

Sep 12

Ind

ex le

vel r

ebas

ed to

100

MSCI Daily TR Net World USD

MSCI World since January 2008



10 year government bond yield since January 2008


0

1

2

3

4

5

6

Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12

Yie

ld %

German Government Bonds 10 Yr UK Govt Bonds 10 Year Note Gen US Generic Govt 10 Year Yield


Map of the markets YTD

Source: Bloomberg, Returns from 30/12/2011-06/09/2012, September 2012

US UK Europe ex UK JapanPacific ex

JapanEmerging Markets

Developed World Index

Energy 2.9% -5.8% 5.3% -17.7% 0.5% -3.8% 0.6%Materials 8.1% -7.3% 13.4% -15.5% -11.1% -5.9% -0.4%Industrials 9.2% 14.5% 9.0% -5.1% 8.6% 3.9% 6.5%Consumer Discretionary 19.1% 16.1% 20.3% 3.4% 3.4% 4.3% 15.6%Financials 18.9% 14.1% 11.1% 10.5% 15.6% 5.9% 14.2%IT 21.5% -4.1% 10.9% -12.6% -4.2% 9.9% 17.1%Telecoms 19.5% 3.4% -7.2% 8.9% 15.4% 7.0% 7.0%Health Care 14.3% -2.5% 17.8% 8.4% 32.5% 20.6% 13.2%Consumer Staples 10.6% 7.5% 15.9% 11.2% 13.5% 10.3% 11.2%Utilities 1.6% 13.8% -3.8% -28.4% 4.5% 2.5% -1.0%

Country / Region (Local) 15.6% 7.2% 14.5% 0.1% 11.6% 6.9% 12.2%Country / Region (USD Terms) 15.6% 9.9% 12.1% -2.5% 12.5% 6.4% 12.1%

Outperformed MSCI World by more than 1 standard deviationOutperformed MSCI World

Underperformed MSCI WorldUnderperformed MSCI World by more than 1 standard deviation


Asset class returns 2012 YTD

Source: Lipper, Returns to 06/09/2012, September 2012

Asset class / region Index Currency Local currency USD

Equities

United States S&P 500 NR USD 15.1% 15.1%

United Kingdom FTSE All Share TR GBP 8.5% 11.3%

Continental Europe MSCI Europe ex UK NR EUR 14.1% 11.1%

Japan Topix TR JPY -0.1% -2.6%

Global MSCI World NR USD 11.7% 11.6%

Global emerging markets MSCI EM (Emerging Markets) NR USD 6.6% 6.1%

Performance to 6 September 2012





Bonds

Government Bonds

US Treasuries JP Morgan United States GBI TR USD 2.1% 2.1%

US Treasuries (inflation protected) Barclays Capital U.S. Govt Inflation Linked TR USD 5.6% 5.6%

UK Gilts JP Morgan United Kingdom GBI TR (daily) GBP 2.9% 5.6%

Euro Government Bonds Citigroup EMU GBI TR EUR 6.7% 3.8%

Japanese Government Bonds JP Morgan Japan GBI TR JPY 1.7% -0.9%

Global Government Bonds JP Morgan Global GBI TR USD 1.6% 1.8%

Corporate Credit

US Corporate (investment grade) Barclays Capital U.S. Corp Investment Grade TR USD 7.3% 7.3%

US High Yield Barclays Capital U.S. High Yield 2% Issuer Cap TR USD 11.0% 11.0%

Other

Global Bonds Citigroup WorldBIG TR USD USD 3.1% 5.9%

Global Convertible Bonds UBS Global Convertible Bond USD USD 8.0% 8.0%

Global Emerging Market Bonds JP Morgan EMBI+ USD 1.5% 6.5%






Property

US Property Securities MSCI US REIT NR USD 17.9% 17.9%

UK Property Securities FTSE EPRA/NAREIT United Kingdom TR GBP 22.9% 26.0%

Europe ex UK Property Securities FTSE EPRA/NAREIT Developed Europe ex UK TR EUR 17.7% 14.6%

Asia Property Securities FTSE EPRA/NAREIT Developed Asia TR USD 28.6% 25.2%

Australian Property Securities FTSE EPRA/NAREIT Australia TR AUD 27.2% 27.5%

Global Property Securities FTSE EPRA/NAREIT Developed CR EUR 21.0% 17.8%

Commodities & Alternatives

Commodities RICI TR USD 5.1% 5.1%

Agricultural Commodities RICI Agriculture TR USD 10.3% 10.3%

Oil ICE Crude Oil CR USD 5.7% 5.7%

Gold Gold Index USD 11.1% 11.1%



10 year government bond spreads vs. Germany


0

100

200

300

400

500

600

700


Sp

read

(bas

is p

oint

s)

Italy France Spain


German vs. Spanish 10 yr government bond yields


January 2000 to date

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12

Yie

ld %

German Government Bonds 10 Yr Spanish Government 10 Yr


Performance of Chinese stock market vs. S&P500


50

60

70

80

90

100

110

120

130

140

150

Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12

Per

form

ance

reba

sed

to 1

00

SHANGHAI COMPOSITE S&P 500 INDEX


Performance of Gold, Copper and Oil


0

50

100

150

200

250


Pric

e re

bas

ed t

o 1

00

LME copper spot ($) Gold spot ($/OZ) Brent Crude Active Contract


Currencies vs. USD


50

70

90

110

130

150

170

Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12

US

D p

er G

BP

, U

SD

per

EU

R,

US

D p

er Y

en

EUR GBP JPY


Performance of currencies vs. USD YTD 2012

Source: Bloomberg, Returns to 12/09/2012, September 2012

-8.0

-1.2

-0.7

-0.5

-0.4

0.1

2.6

3.6

4.2

4.7

4.8

5.4

5.5

7.3

-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0

Brazilian Real

Japanese Yen

Danish Krone

Euro

Chinese Renminbi

Swiss Franc

Australian Dollar

British Pound

Norwegian Krone

Canadian Dollar

Swedish Krona

Singapore Dollar

New Zealand Dollar

Mexican Peso


3. Market outlook


Critical issues

• Sustainability of growth in the US

• Structural slowdown in China – or hard landing?

• European imbalances

• Central bank pump pricing vs. global deleveraging


Source: JPMorgan, September 2012

Clear slowdown in global growth


Economy has slowed: US leading economic indicators


-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%


Monthly % change


US consumer confidence


0

20

40

60

80

100

120

140

160


Ind

ex le

vel

US Consumer Confidence


US economic momentum is reasonable – but unemployment remains high

US labour market


0.0

2.0

4.0

6.0

8.0

10.0

12.0

0

100

200

300

400

500

600

700

800

Jan 80

Feb 81

Mar 82

Apr 83

May 84

Jun 85

Jul 86

Aug 87

Sep 88

Oct 89

Nov 90

Dec 91

Jan 93

Feb 94

Mar 95

Apr 96

May 97

Jun 98

Jul 99

Aug 00

Sep 01

Oct 02

Nov 03

Dec 04

Jan 06

Feb 07

Mar 08

Apr 09

May 10

Jun 11

Jul 12

(%)

Num

ber o

f cla

ims

(th

ousa

nds)

US Initial Jobless Claims SA US Unemployment Rate (%)


US construction: the only way is up?


0

500

1000

1500

2000

2500

3000

Jan 59 Jan 62 Jan 65 Jan 68 Jan 71 Jan 74 Jan 77 Jan 80 Jan 83 Jan 86 Jan 89 Jan 92 Jan 95 Jan 98 Jan 01 Jan 04 Jan 07 Jan 10 Jan 13

Vo

lum

e (t

ho

usan

ds)

US New Privately Owned Housing Starts

0

100

200

300

400

500

600

700

800

900

Jan 59 Jan 62 Jan 65 Jan 68 Jan 71 Jan 74 Jan 77 Jan 80 Jan 83 Jan 86 Jan 89 Jan 92 Jan 95 Jan 98 Jan 01 Jan 04 Jan 07 Jan 10 Jan 13

Bill

ion

(U

SD

)

US Gross Private Domestic Investment


US housing starts over the last 12 months


560

580

600

620

640

660

680

700

720

740

760

780

Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12

Vo

lum

e (t

ho

usan

ds)

US New Privately Owned Housing Starts


Fiscal cliff: will need to be tackled after November


US budget deficits

-12

-10

-8

-6

-4

-2

0

2

4

Mar 92 Mar 95 Mar 98 Mar 01 Mar 04 Mar 07 Mar 10 Mar 13

% o

f GD

P

US Budget Balance (% GDP)


US fiscal deficit as % of GDP 1791 -2011

Source : Deutsche bank, GFD. September 2012.


Budget deficits larger in the US than in peripheral Europe

Source: Deutsche bank. September 2012.

Greece, Ireland, Italy, Portugal and Spain: GDP- weighted fiscal balance

US

Budget deficit as a % of GDP

%


China is landing


GDP and industrial production

0%

5%

10%

15%

20%

25%

0%

2%

4%

6%

8%

10%

12%

14%

Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12

China GDP (LHS) Chinese Industrial Production (RHS)


Major macro indicators continue to disappoint

Source: Bloomberg, September 2012.

0

5

10

15

20

25

30

35

40

45

Jan 98

Aug 98

Mar 99

Oct 99

May 00

Dec 00

Jul 01

Feb 02

Sep 02

Apr 03

Nov 03

Jun 04

Jan 05

Aug 05

Mar 06

Oct 06

May 07

Dec 07

Jul 08

Feb 09

Sep 09

Apr 10

Nov 10

Jun 11

Jan 12

Aug 12

Mo

ney

Sup

ply

Gro

wth

%

M1 YoY M2 YoY

Chinese money supply (% yoy)

20

25

30

35

40

45

50

55

60

65

Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12

China New Orders PMI SA China New Export Orders PMI SA

Chinese PMI: new orders

Leve

l


Export sector flatlining


Chinese global exports (Real $)

70

700

Dec 99 Apr 01 Sep 02 Jan 04 May 05 Oct 06 Feb 08 Jul 09 Nov 10 Apr 12 Aug 13


Imports slowing

Source: SocGen April 2012

Chinese global imports (Real $)


China’s slowing growth: structural or cyclical?

Source: Factset. September 2012.

China Real GDP y/y % change

0

2

4

6

8

10

12

14

16

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

%


The European crisis is not simply debt

Source: IMF, 2012 estimates.

Budget deficit to GDP

Current account balance

-2.2%

-2.4%

5.2%

-0.8%

-1.9%

-4.6%

-1.7%

-8.0%

1.0%

-8.5%

-4.2%

-4.5%

-2.1%

-6.0%

-7.4%

-7.2%


Unit labour costs since the launch of the euro


80

90

100

110

120

130

140

Dec 99

Jul 00

Feb 01

Sep 01

Apr 02

Nov 02

Jun 03

Jan 04

Aug 04

Mar 05

Oct 05

May 06

Dec 06

Jul 07

Feb 08

Sep 08

Apr 09

Nov 09

Jun 10

Jan 11

Ind

ex le

vel r

ebas

ed to

100

Spain

Italy

Greece

Portugal

France

Ireland

Germany


Currencies vs. the Deutschemark


0

200

400

600

800

1,000

1,200

1,400

0

20

40

60

80

100

120

140

160

180

20073 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07

ITL p

er DE

M

GR

D, E

SP

, PT

E p

er D

EM

Spanish peseta Greek drachma Italian lira


German Labour reform accelerated growth- can Italy?


80

90

100

110

120

130

140

150

Dec 94

Aug 95

Apr 96

Dec 96

Aug 97

Apr 98

Dec 98

Aug 99

Apr 00

Dec 00

Aug 01

Apr 02

Dec 02

Aug 03

Apr 04

Dec 04

Aug 05

Apr 06

Dec 06

Aug 07

Apr 08

Dec 08

Aug 09

Apr 10

Dec 10

Aug 11

Apr 12

Dec 12

Ind

ustr

ial P

rodu

ctio

n (r

ebas

ed to

100

Jan

uary

199

5)

US Germany Italy


The European stress / intervention cycle

• Don’t underestimate the political will to preserve the Eurozone

• Inflate, stagnate or default

• Austerity / growth

• European bail out of banks

• Issue of Eurobonds

• ECB – LTRO / OMT / rate cut

• Fiscal union


Central government debt burden 1900 to 2011 - advanced and emerging economies

Source: Reinhart (2010), Reinhart and Rogoff (2009 and 2011), sources cited therein and the authors

%


Total debt to GDP for developed economies 1990 - 2012

Source: Deutsche Bank, Haver. September 2012.


Debt composition varies widely

Source: Bloomberg, September 2012.

67

98

82

48

45

81

87

60

105

91

99

109

134

111

82

107

72

49

59

53

120

219

76

97

76

93

40

87

91

63

226

81

71

90

111

33

80

83

21

69

0 100 200 300 400 500 600

Japan

United Kingdom

Spain

France

Italy

South Korea

United States

Germany

Australia

Canada

Households Nonf inancial corporations Financial institutions Government


Short term interest rates over past 10 years

Source: MGIM, Bloomberg. September 2012

US, UK, Japan and Europe

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12

USD 1 Month LIBOR GBP 1 Month LIBOR JPY 1 Month LIBOR EUR 1 Month LIBOR

%


The world is not normal:UK base rate 1694 to today

Source: Deutsche Bank, GFD. September 2012.


The world is not normal:Swiss government bond yields

Source: Bloomberg, MGIM. September 2012.

-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

0 5 10 15 20 25 30

yiel

d (%

)

years to maturity

Swiss government bond yield


The world is not normal:10 year government bond yields

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%


Yie

ld

US Germany UK

Source: Bloomberg, MGIM. September 2012.


The world is not normal:US 10 year yield since 1790

Source: Deutsche Bank, GFD, Bloomberg Finance LLp. September 2012.


Quantitative easing:Bank of England balance sheet as a % of GDP

Source: Deutsche bank. September 2012.,


The UK recovery is weaker than in the great depression

Source: Deutsche Bank. September 2012.

%


Tail risk of extreme events are not insignificant

• US fiscal cliff

• Chinese ‘recession’

• Eurozone disintegration

• Journey into the unknown – monetary easing


Equity market valuations

Source: Bloomberg, Statistics to 06/09/2012. September 2012

*current year estimate

Price/Earnings* Dividend yield10-year Government

bond yields

United States 13.8 2.1% 1.7%

Eurozone 10.8 4.2% 1.6%

United Kingdom 11.2 4.1% 1.7%

Germany 10.9 3.7% 1.6%

Switzerland 13.4 3.6% 0.5%

Japan 13.8 2.4% 0.8%

Hong Kong 10.2 3.8% 0.7%

Australia 12.6 5.0% 3.1%


MSCI World P/E ratio since 1995


0

5

10

15

20

25

30

35

40

Aug 95

Aug 96

Aug 97

Aug 98

Aug 99

Aug 00

Aug 01

Aug 02

Aug 03

Aug 04

Aug 05

Aug 06

Aug 07

Aug 08

Aug 09

Aug 10

Aug 11

Aug 12

P/E

Rat

ios

MSCI WORLD


MSCI World price to book since 1995


0

1

1

2

2

3

3

4

4

5

Aug 95

Aug 96

Aug 97

Aug 98

Aug 99

Aug 00

Aug 01

Aug 02

Aug 03

Aug 04

Aug 05

Aug 06

Aug 07

Aug 08

Aug 09

Aug 10

Aug 11

Aug 12

Pri

ce-t

o-b

ook

ratio

MSCI WORLD


Tail wind of EM re-valuation now behind us


MSCI World PB vs. MSCI GEM PB

0

1

1

2

2

3

3

4

4

Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13

P/E

Rat

ios

MSCI WORLD MSCI Emerging Markets


Investment conclusion

• ‘New normal’ is now the consensus

• Deleveraging and rebalancing set to continue for years

• US – growth risk in 2013China – structural slowdown underwayEurope – stress / intervention cycle to continue

• Policy risks are high

• Further monetary loosening is certain

• Crisis presents an extraordinary valuation opportunity


Implications for portfolio construction

• Subdued growth low return expectations

• Continued deleveraging and tight credit financial strength is critical

• High tail risks high volatility

• Cyclical move down in commodities has further to run

• Deflation protection in safe haven bonds

• Income generating assets important• safe dividend equities• corporate bonds• emerging market bonds

Focus on:Diversification by asset classQuality defensive equitiesInflation not today’s problem – but might be the end gameExploit tactical opportunities

Focus on:Diversification by asset classQuality defensive equitiesInflation not today’s problem – but might be the end gameExploit tactical opportunities


4. Appendix: Momentum Global Investment Management


Who we are and why we are different

• Business & heritage

Boutique focus and mindset

Strong corporate backing: top 40 JSE listed company

Group AuM: USD41 billion, London AuM: USD4.7 billion*

• Investment process

Highly experienced and stable team

Disciplined valuation driven investment process

Capital preservation mindset

• Investment manager partnerships

Genuinely bespoke solutions – highly attuned to client needs

True dynamic asset allocation

Use of external specialists

Diversification across a wide range of asset classes

• Deal exclusively with institutions and intermediaries

Source Momentum Global Investment Management, *As at July 2012.


Investment philosophy – core beliefs

Markets are inefficient

Inefficiencies create valuation extremes and offer opportunitiesDynamic asset allocation will add value over time

Increasing the investable universe will increase the opportunity set

Effective use of broad range of asset classes generates better risk:return profileBlending uncorrelated assets enables true diversification

Valuation is paramount

Reversion to the mean works in the long runWait for the ‘fat pitch’

No single manager / investment house is good at everything

Dynamic manager selection is essentialFocus on employing specialists to maximise opportunities


Risk management

Asset class selection True risk is the possibility of permanent loss of capitalBest defence is buying a diverse portfolio of undervalued a setsValuation is key: Scenario testing used to stress test our valuations

Manager selection Extensive operational due diligence processOnsite visits by our DD team as necessaryTransparency required to guard against style drift

Position sizing Target benchmark volatilityRisk analysed at individual contribution and total portfolio levelPosition sizes adjusted to keep within target and ensure a prudent level of diversification Liquidity stress testing


Investment process

identify most attractivestrategies

appoint external specialists for each asset class

construct optimal portfolioincluding risk management overlay

risk management /due diligence on all positions

& review

Asset allocation

Manager selection

Portfolio construction

Ongoing monitoring


Asset class research

Where active management works

Percentage of fund managers who underperform various performance hurdles

January 2012. (Illustrative purposes only)

Index +1% +2% +4%

Domestic Bonds*

Global Bonds

EM Equity

Japanese Equity

UK Equities

US Equities

Global Equities

European Equities

Small Cap*

66 77

67 77

65 71 75

69 75 81

66 75

67 73

65 75

67

84E

ffic

ien

tS

em

i-e

ffic

ien

tIn

eff

icie

nt


Manager research and selection

104

• Assets under management• Investment style• High alpha

• Returns based style analysis• Risk/attribution analysis

• Check consistency through • time

• Philosophy• Process• People• Evidence

Re-evaluation of existing managers

• Ongoing monitoring

Asset class screening / initial research

Quant analysis

Due diligence

Selection


Manager research process

Buy discipline Sell discipline

Continuous monitoring

What we’re looking for:Sound philosophy

Disciplined processProven team/implementationRobust capacity management

Alignment of interestsBusiness stability

Sell indicatorsUpgrade decision

Key individual/ team leavesPoor capacity management

Inconsistent behaviourNegative corporate change

Operational issues

Manager Evaluation

Manager Re-evaluation

IdeaGeneration

Appoint Manager

SellManager

Re-evaluateUniverse


Using the best talent from around the world

Chicago:DriehausTimpani

AustinYacktman

New York:American Century

PzenaMuzinich

Cohen & Steers

PolarMorgan StanleyiSharesOld MutualHendersonM&GRWCSchrodersThreadneedleJupiter

Lo

nd

on

Paris:Comgest

Singapore:FirthPictet

Tokyo:Tiburon

Connecticut:LapidesAXA IM

BlackRock

Wilmington:Marvin & Palmer

Sydney:Aberdeen

UBS

San Francisco:

Artisan

Arizona:ING


Disclaimer

Momentum Global Investment Management is the trading name for Momentum Global Investment Management Limited. This document does not constitute an offer or solicitation to any

person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The

original recipient is solely responsible for any actions in further distributing this document, and should be satisfied in doing so that there is no breach of local legislation or regulation. The

information is intended solely for use by our clients or prospective clients, and should not be reproduced or distributed except via original recipients acting as professional intermediaries.

This document is not for distribution in the United States.

Prospective investors should inform themselves and if need be take appropriate advice regarding applicable legal, taxation and exchange control regulations in countries of their citizenship,

residence or domicile which may be relevant to the acquisition, holding, transfer, redemption or disposal of any investments herein solicited.

Any opinions expressed herein are those at the date this material is issued. Data, models and other statistics are sourced from our own records, unless otherwise stated herein. We believe

that the information contained is from reliable sources, but we do not guarantee the relevance, accuracy or completeness thereof. Unless otherwise provided under UK law, Momentum

Global Investment Management does not accept liability for irrelevant, inaccurate or incomplete information contained, or for the correctness of opinions expressed.

We caution that the value of investments in discretionary accounts, and the income derived, may fluctuate and it is possible that an investor may incur losses, including a loss of the principal

invested. Past performance is not generally indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are invested may be subject

to exchange rate movements that alter the value of their investments.

Our investment mandates in alternative strategies and hedge funds permit us to invest in unregulated funds that may be highly volatile. Although alternative strategies funds will seek to

follow a wide diversification policy, these funds may be subject to sudden and/or large falls in value. The illiquid nature of the underlying funds is such that alternative strategies funds deal

infrequently and require longer notice periods for redemptions. These Investments are therefore not readily realisable. If an alternative strategies fund fails to perform, it may not be possible

to realise the investment without further loss in value. These unregulated funds may engage in the short selling of securities or may use a greater degree of gearing than is permitted for

regulated funds (including the ability to borrow for a leverage strategy). A relatively small price movement may result in a disproportionately large movement in the investment value. The

purpose of gearing is to achieve higher returns associated with larger investment exposures, but has concomitant exposure to loss if positive performance is not achieved. Reliable

information about the value of an investment in an alternative strategies fund may not be available (other than at the fund’s infrequent valuation points).

Under our multi-management arrangements, we selectively appoint underlying sub-investment managers and funds to actively manage underlying asset holdings in the pursuit of achieving

mandated performance objectives. Annual investment management fees are payable both to the multimanager and the manager of the underlying assets at rates contained in the offering

documents of the relevant portfolios (and may involve performance fees where expressly indicated therein).

Momentum Global Investment Management Limited (Company Registration No. 3733094) registered office at 20 Gracechurch Street, London EC3V 0BG.

Momentum Global Investment Management Limited is authorised and regulated by the Financial Services Authority in the United Kingdom, and is an authorised Financial Services Provider

pursuant to the Financial Advisory and Intermediary Services Act 37 of 2002 in South Africa.

© Momentum Global Investment Management Limited 2012


Contact: Lucy RichardsonMarketing ManagerMomentum Global Investment Management [email protected]: +44 207 939 1725www.momentumgim.com

1 global investment management Harmony portfolios review & market update Glyn Owen September 2012.

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Transcript of 1 global investment management Harmony portfolios review & market update Glyn Owen September 2012.