Generating Fixed Income Returns in a Difficult Market ... · PDF fileGenerating Fixed Income...

Generating Fixed Income Returns in a Difficult Market Environment

Jim Cielinski – Head of Global Fixed Income

December 2014 For institutional investors

The Role of Fixed Income in Portfolios

1

Chart Source: Threadneedle Investments, 31 Oct 2014. Additional market spreads, yields and default forecasts have been made to arrive at total return estimates.

Challenge Solution

Market valuation (beta) appears unattractive

Focus on products targeting high alpha (absolute return, strategic bond), thereby permitting positive returns in all environments; consider “limited duration” products if fearful of higher rates

Both nominal and real yields are depressed Seek yield with safety in areas such as corporate credit; focus on after-tax total real returns rather than simple yield; consider less liquid instruments

Potential returns are unacceptably low Accept it, but recognise that potential bond returns are not as bad as you might think

Poorly designed products may produce unexpected results

Product design is key; carefully define ‘beta’ preferences

One must identify their fixed income problem

before they can solve it

Fund design can allow investors to benefit from

rising rates or widening credit spreads

A focus on generating alpha rather than relying

on beta. A focus on alpha rather than simply

beta is imperative

Choosing the Right Beta

Past performance is not a guide to future performance.

2

As both forms of beta become less attractive, alpha is necessary to hit return targets

Abs Ret

A short duration view is not a sure-fire way to generate positive returns

Past performance is not a guide to future performance. Source: Bloomberg, 20 November 2014

3

US Treasury Yield Curves

0

0.5

1

1.5

2

2.5

3

3.5

4

0 5 10 15 20 25 30 35

Yie

ld (

%)

Tenor (years to maturity)

Spot 1Yr Forward 5Yr Forward

0

0.5

1

1.5

2

2.5

3

3.5

4

0 5 10 15

Yie

ld (

%)

Years Forward

5 year USD Treasury Rates Forward Curve

Rates must rise by more than forwards to generate returns below cash

Global excess savings and soft inflation are supporting bonds at poor valuations

Credit Strategies Embrace credit but have a strategy for managing volatility

Past performance is not a guide to future performance. Source: Bloomberg, 2014

4

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1998 2000 2002 2004 2006 2008 2010 2012 2014

Sp

rea

d (

bp

s)

USD HY USD IG EM Hard Ccy Australia IG

Credit remains attractive, but plan for the exit

The Role of Fixed Income in Portfolios

5

4.0

-0.1

-3.3

-0.1

2.7

-0.8 -1.2

6.2 5.5

-3.5

6.4 6.6

-6

-4

-2

0

2

4

6

8

Eurozone Recession Slow Growth Inflationary Recovery

Re

turn

(p

ct)

Fixed Income Return Scenarios – Next Twelve Months

US Treasuries

US Investment Grade

USD Emerging Market Debt

US High Yield

Chart Source: Threadneedle Investments, 31 Oct 2014. Projections are based on Threadneedle’s expectations and forecasts of the credit, EM and government bond markets within the three scenario’s described above. Additional market spreads, yields and default forecasts have been made to arrive at total return estimates. Projections are not a reliable indicator of future performance.

Twelve-month total return projections (%) for various market environments from 31 October 2014

Slow, steady global growth will be supportive for fixed income

Approaches to Generating Alpha Is it possible for fixed income to generate strong results?

6

Diversification of alpha sources is necessary to produce sustainable results

Representative risk budget

Strategy

Target Tracking

Error (bps) Assumed IR

Target Return1

(bps)

Rates

Duration 150 0.25 38

Yield Curve 80 0.35 28

Country 125 0.35 44

Currency 185 0.5 93

Asset Allocation

Spread Beta 250 0.4 100

Cross-Market 75 0.4 30

Security Selection

OECD Sovereigns 30 0.75 23

Emerging Markets 45 0.75 34

Investment Grade 40 0.75 30

High Yield 40 0.75 30

ABS/MBS 25 0.75 19

Total 467

1 This is a target only and cannot be guaranteed. For illustrative purposes only.

Fixed income must work harder than ever before to achieve return targets

Asset allocation is a critical return generator, both at the mandate level and the overall fund level

Potential fixed income returns in many areas remain attractive despite the low level of yields

Most investors should embrace some degree of liquidity risk, but such a risk must be managed across the cycle

Define what you want from your fixed income allocation; how bond-like do you want it to be?

Ultra-low yields can have a profound impact on the risk and return of all asset classes

Summary

7

Threadneedle (Lux) Global Opportunities Bond Fund

Columbia Threadneedle Global Asset Management at a Glance

Source: Threadneedle, as at 30 June 2014. AUM includes externally managed funds under administration.

9

Source: Columbia Management Investment Advisers, LLC. and Threadneedle Investments, 30 June 2014

Columbia Management Investments is an institutional GIPS firm and an operating division of Columbia Management Investment Advisers, LLC.

Threadneedle AUM includes externally managed funds under administration.

AUM by Product Type ($B)

Columbia Management Investment Advisers, LLC Firm Assets

AUM by Asset Class ($B)

Fixed Income,

$161.6, 49%

Equity, $161.2, 48%

Balanced, $9.6, 3%

Retail Products,

$208.4, 63%

Institutional Products,

$124.0, 37%

GIPS Firm Assets Under Management

Total Assets ($B)

Columbia Management Investments (GIPS Firm)

$329.2

Threadneedle Investments (GIPS Firm)

$158.7

Threadneedle Investments

Wholesale, $30.1bn,

32.6%

Institutional, $62.2bn,

67.4%

Equities, $55.7bn,

60.1%

Fixed income, $27.7bn,

29.9%

Cash, $2.2bn, 2.4%

Property, $7.1bn, 7.7%

Global fixed income resources

10

Information as at 30 September 2014. Columbia Management Investment Advisers, LLC may be making investment recommendations to Threadneedle Investments and, therefore providing investment advice supported by research. Threadneedle Investments may act, or refrain from acting, based upon its view of any investment advice supported by research or investment recommendations provided by Columbia Management Investment Advisers, LLC and retains the complete discretion to take all day to day investment decisions and to deal in investments.

Leaders indicated in bold font. *European High Yield Research Analysts report into Barrie Whitman on the Threadneedle European High Yield portfolio management team. ** The Leveraged Debt research analysts reports into Lynn Hopton on the Leveraged Debt portfolio management team. ***Jim McKay is an employee of an affiliated company, Ameriprise Trust Company, and manages investment offerings that leverage the fixed income capabilities of Columbia Management Investment Advisers, LLC. Columbia Management and the Threadneedle group of companies (“Threadneedle Investments”) are both part of the Ameriprise Financial, Inc. organization. They collaborate closely on the provision of certain investment advisory services, but operate as distinct legal entities.

Columbia Management Threadneedle Investments

Colin Moore

Global Chief Investment Officer Mark Burgess

Chief Investment Officer, Threadneedle Investments Research Portfolio Management Trading

Robert McConnaughey Jim Cielinski, CFA

Steve Harasimowicz

Head of Global Trading

Head of Global Research Head of Global Fixed Income

Kirk Moore, CFA Colin Lundgren, CFA Head of Global Fixed Income Research Head of U.S. Fixed Income

Investment Grade U.S. High Yield Emerging Markets U.S. Investment Grade U.S. High Yield Rates & Currency Core/Core Plus Core/Core Plus

Todd Czachor, CFA Brett Kaufman, CFA Ryan Burke, CAIA Tom Murphy, CFA Jennifer Ponce de Leon David Janssen Carl Pappo, CFA Will Peishoff

Dori Aleksandrowicz Daniel DeYoung Donaji Valencia Tim Doubek, CFA Brian Lavin, CFA Nic Pifer, CFA Michael Zazzarino Kevin Lema

Ben Bassett, CFA Julie Grey, CFA, CPA Delphine Arrighi Royce Wilson, CFA Dan Segner, CFA Matt Cobon Alan Erickson, CFA Paul McCann

Jeffrey Cicirelli, CFA Kris Keller, CFA Mindaugas Lepeska Gregg Syverson, CFA, CPA Mark Van Holland, CFA Alex Batten Martha Childs, CFA Luke Hagopian, CFA

John Dawson, CFA Jim MacMiller Xiong Wei Poh Steve Gorny, CFA David Greavu Dave Chappell Stephen Sheehan, CFA William Finan

Nathaniel Liddle Brian D. Newman, CFA, CPA Sabrina Wong Matt Steiger Michael Roberts, CFA Martin Harvey, CFA Garritt Conover Braj Agrawal

David Morgan, CFA Spencer Sutcliffe Jason Sittko, CFA Matthew Rees, CFA Elena Rozina Philip McKernan

Willow Piersol, CFA Tom Tracy U.S. Structured Assets European Investment Grade Ted Nerison Sanjay Roy Liability Driven Investing

Mary Titler Patti McConachie Ryan Osborn, CFA David Oliphant Alessandro Tarello, CFA Frank Salem, CFA New Issues

Jonathan Pitkanen Jason Weinberg, CFA Mitch Helle-Morrissey Simon Bond European High Yield Karl Chang, CFA Peter Apostolicas

Arabella Duckworth Rich Gross, CFA Michael Milosch, CFA Tammie Chan Barrie Whitman Emerging Markets Timothy Brannon

Ryan Staszewski, CFA Chris Jorel, CFA Shawn Pierce, CFA Alasdair Ross, CFA David Backhouse Jim Carlen, CFA Jason Thinh Le Municipal Bonds

Karan Samtani Michael Poole Henry Stipp Tom Egan Anthony Purcell

Paul Smillie European High Yield* Private Placements U.S. Structured Assets Mohd-Farid Kamarudin Diane Bordulis Travis Bates

Jeff Mueller Chris Patton, CFA, CPA Jason Callan Leveraged Debt Clifford Lau, CFA Phil Carty

Municipal Bonds Gianluca Consoli Tom Heuer, CFA, CPA Lynn Hopton Zara Kazaryan Solutions Peter Fleming

Chad Farrington, CFA Gareth Simmons Real Estate Loans Bill Lee, CFA Yvonne Stevens LDI, Inflation-Linked Maggie Saltalamacchia

Dan Belcher Jenny Wong, CFA John Dittrich Dan Ruether Steve Staver, CPA Short Duration & Orhan Imer, Ph.D., CFA Ralph Vezina

Jeff Kovala Brian Hennen Jerry Howard, CFA Stable Value Andrew Gruet Courtney Walsh

Ryan Nelson Leveraged Debt** Jonathan Jablonsky Commodities Leonard Aplet, CFA Dana Wing

Michael Roye Steve Columbaro, CFA John McCarthy David Donora Municipal Bonds Greg Liechty Strategic Income

Ty Schoback Angela Jarasunas Mark McMullen Daniel Belchers James Dearborn John McColley Gene Tannuzzo, CFA Global

Matthew Stephan Ashraf Jilani, CFA Julene Melquist Ullaas Misra Kim Campbell Jim McKay, CFA*** Zach Pandl Kris Knudtson

Michael Taylor Eric Johnson Nicolas Robin Paul Fuchs, CFA Julie Oman Bill Tong

Elizabeth Ware Ron Launsbach, CFA Brian McGreevy Michael Pak, CFA Client Portfolio Gabriel Heskin

Ben Woo Matt Pielert Catherine Stienstra James Sims, CFA Management Sarah Kendrick

Mary Schaifer Anders Myhran, CFA Ron Stahl, CFA Wendy Price, CFA Cindy Larke

Vessa Tontti, CFA Mary Werler, CFA Andrew Key Ian Neville

Ryan Krieg James Waters Emma Photis

Linda Solarek

Tiffany Zahas

67 Research Professionals 87 Professionals 24 Professionals

Threadneedle (Lux) Global Opportunities Bond Fund

Source: Threadneedle Investments as at 31 October 2014.

11

Distinguishing features

Incorporating best ideas from across the Fixed Income team

Macro Strategies: Duration, Yield Curve, Currency

Asset Allocation

Securitized, EMD and Corporate Credit Strategies

Focus on relative value opportunities and producing consistent alpha

Best Ideas

Consistent positive track-record since inception Consistent Alpha

Multi-disciplinary team

Expertise across fixed income markets

Firm-wide co-operation & debate strengthen investment conclusions

Portfolio Manager

Jim Cielinski

Deputy Portfolio Manager

Martin Harvey

Benchmark Citigroup 1 Month deposit index

Target tracking error

5-7pct tracking error over a market cycle

Fund launch

date August 2011

Designed to generate positive returns in excess of the benchmark plus 4.5% (gross of fees) in any 12 month period, irrespective of market conditions

Portfolio Management Team

Ultimately responsible for performance

Responsible for adherence to risk budget

Ensure diversification across performance drivers, avoiding excessive correlations that could lead to unintended risks

Strategy Teams

Propose best ideas within their respective strategies

Measured on the performance of the trade ideas that are incorporated into the portfolio

Combining ownership and teamwork to capture our best ideas

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Asset Allocation

Team

6 Analysts and PMs

Emerging

Market Macro

Team

11 Analysts and PMs

Investment

Grade

Corporate

Credit Team

24 Analysts and PMs Emerging

Market Credit

Team

11 Analysts and PMs

High Yield

Corporate

Credit Team

8 Analysts and PMs

Developed

Market Macro

Team

8 Analysts and PMs

Global

Opportunities

Bond Fund

Team

Investment process

13

Risk Budgeting

Risk Management

Scenario Analysis

Asset class allocation Teams

Security Selection Teams

Developed and Emerging Market

Macro Teams

Research

Duration

Curve

Currency

Asset class beta

Asset class rotation

Industry / country

Credit quality

Security selection

Portfolio Construction

Threadneedle (Lux) Global Opportunities Bond Fund Current Positioning

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Duration exposures Currency exposures

Source: Threadneedle as at 31 October 2014.

-20%

-10%

0%

10%

20%

NZD AUD CHF BRL GBP JPY NOK EUR MXN USD

Ma

rke

t V

alu

e (

pct

)

Currency

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

JPY EUR AUD COP USD MXN NZD

Du

rati

on

(y

ea

rs)

Currency

Asset allocation exposures

Corporate credit exposures

EMD exposures

-2

-1.5

-1

-0.5

0

0.5

1

1.5

IG HY EMD

Sp

rea

d d

ura

tio

n (

ye

ars

)

Sector

-3-2-1012

IG

(long)

IG

(short)

HY

(long)

HY

(short)

IG European

HY

US

HY

Sp

rea

d d

ura

tio

n

(ye

ars

)

Bonds and single name CDS Index CDS

-0.3

-0.1

0.1

0.3

AE AZ BR CL CO DO GE HU IN MX PL RO RU TR

Sp

rea

d d

ura

tio

n

(ye

ars

)

Corp Gov

Threadneedle (Lux) Global Opportunities Bond Fund Gross Performance in USD

15

Source: Threadneedle, as at 31 October 2014. Past performance is not a guide to future performance.

Performance (%) 2011

Sep Q4 2011

Global Opportunities Bond Fund (Gross, USD) 0.61 1.78 2.38

Citigroup USD 1 month eurodeposit index 0.02 0.06 0.08

Excess Return 0.59 1.71 2.29


Q1 Q2 Q3 Q4 2012

Global Opportunities Bond Fund (Gross, USD) 3.09 1.10 3.07 1.03 8.55

Citigroup USD 1 month eurodeposit index 0.06 0.07 0.07 0.05 0.25

Excess Return 3.02 1.04 3.00 0.98 8.28


Q1 Q2 Q3 Q4 2013



Excess Return 0.16 0.41 0.59 2.56 3.73

Performance (%) 2014 2014

Q1 Q2 Q3 Oct YTD



Excess Return 1.18 0.62 0.31 0.18 2.30

Annualized volatility since inception: 2.5pct

Potential to maximise risk-adjusted returns and produce consistent alpha throughout the economic cycle

Positive and consistent track record exceeding performance target since inception

Particular approach to asset allocation, focusing on identifying periods in which to exit risk

Scenario analysis designed to identify most attractive risk-adjusted returns irrespective of asset class

Why Threadneedle for Global Opportunities Bond?


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Biography

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JIM CIELINSKI Head of Fixed Income

Jim Cielinski joined Threadneedle Investments in 2010 as Head of Fixed Income. In this role he is responsible for the overall management of the fixed income business, including investment process, product development and investment strategy. He manages the Threadneedle (Lux) Global Opportunities Bond and is also a key participant in Threadneedle’s asset allocation process. Jim is also Head of Global Fixed Income across the combined entities of Threadneedle and sister-company Columbia Management. Before joining Threadneedle Jim spent 12 years at Goldman Sachs, leaving as Head of Global Credit – Investment Grade. He has also held senior investment roles at Utah Retirement Systems and Brown Brothers Harriman. Jim graduated from the University of Utah in 1983 with a BSc in Finance and gained an MBA from New York University in 1988. He is a Chartered Financial Analyst and a member of the UK CFA Society.

Threadneedle Start Date: 2010 Industry Start Date: 1983

Investment Risk: The value of investments can fall as well as rise and investors might not get back the sum originally invested.

Currency Risk: Where investments are made in assets that are denominated in multiple currencies, changes in exchange rates may affect the value of the investments.

Investor Currency Risk: Where investments in the fund are in currencies other than your own, changes in exchange rates may affect the value of your investments.

No Capital Guarantee: Positive returns are not guaranteed and no form of capital protection applies.

Counterparty Risk: The fund may enter into financial transactions with selected counterparties. Any financial difficulties arising at these counterparties could significantly affect the availability and the value of fund assets.

Issuer Risk: The fund invests in securities whose value would be significantly affected if the issuer either refused to pay or was unable to pay or perceived to be unable to pay.

Liquidity Risk: The fund may hold assets that are not always readily saleable without suffering a discount to fair value. The fund may have to lower the selling price, sell other investments or forego another, more appealing investment opportunity.

Inflation Risk: Most bond and cash funds offer limited capital growth potential and an income that is not linked to inflation. Inflation is likely to affect the value of capital and income over time.

Interest Rate Risk: Changes in interest rates are likely to affect the fund’s value. In general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa.

Valuation Risk: The fund’s assets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold.

Short Selling Risk: Short selling intends to make a profit from falling prices. However if the value of the underlying investment increases, the value of the short position will decrease. The potential losses are unlimited as the prices of the underlying investments can increase very significantly in a short space of time.

Leverage Risk: Leverage amplifies the effect that a change in the price of an investment has on the fund’s value. As such, leverage can enhance returns to investors but can also increase losses, including losses in excess of the amount invested.

Investment in Derivatives: The Investment Policy of the fund allows it to invest materially in derivatives.

Volatility Risk: The fund may exhibit significant price volatility.

Objective: The aim of the Fund is to provide income with the potential to grow the amount you invested as well.

Threadneedle (Lux) Global Opportunities Bond Fund Key Risks and objective

18

For internal use and for Professional and/or Qualified Investors only (not to be used with or passed on to retail clients)

Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested.

Threadneedle (Lux) is an investment company with variable capital (Société d’investissement à capital variable, or "SICAV") formed under the laws of the Grand Duchy of Luxembourg. The SICAV issues, redeems and exchanges shares of different classes, which are listed on the Luxembourg Stock Exchange. The management company of the SICAV is Threadneedle Management Luxembourg S.A, who is advised by Threadneedle Asset Management Ltd. and/or selected sub-advisors.

The SICAV is registered in Austria, Belgium, France, Finland, Germany, Hong Kong, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, Switzerland, Taiwan and the UK; however, this is subject to applicable jurisdictions and some sub-funds and/or share classes may not be available in all jurisdictions. Shares in the Funds may not be offered to the public in any other country and this document must not be issued, circulated or distributed other than in circumstances which do not constitute an offer to the public and are in accordance with applicable local legislation.

Threadneedle (Lux) is authorised in Spain by the Comisión Nacional del Mercado de Valores (CNMV) and registered with the relevant CNMV's Registered with number 177.

Shares in the Funds may not be offered, sold or delivered directly or indirectly in the United States or to or for the account or benefit of any “U.S. Person”, as defined in Regulation S under the 1933 Act.

This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.

Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available in English, French, German, Portuguese, Italian, Spanish and Dutch (no Dutch Prospectus) and can be obtained free of charge on request by writing to the SICAV’s registered office at 31, Z.A. Bourmicht, L-8070 Bertrange, Grand Duchy of Luxembourg and/or from in Austria: Erste Bank, Graben 21 A-1010 Wien; in Belgium: J.P. Morgan Chase Bank Brussels, 1, Boulevard du Roi Albert II, 1210 Brussels; in France from CACEIS Bank, 1/3 Place Valhubert, 75013 Paris; in Finland from Eufex Bank Plc, Keilaranta 19, 02150 Espoo; in Germany from JP Morgan AG, Junghofstr. 14, 60311 Frankfurt, in the UK from JPMorgan Worldwide Securities Services, 60 Victoria Embankment, London EC4Y 0JP; in Sweden from Skandinaviska Enskilda Banken AB (publ), Sergels Torg 2, 106 40 Stockholm.

Het compartiment is op grond van artikel 1:107 van de Wet op het financieel toezicht opgenomen in het register dat wordt gehouden door de Autoriteit Financiële Markten. / Pursuant to article 1:107 of the Act of Financial Supervision, the subfund is included in the register that is kept by the AFM.

Please read the Prospectus before investing.

The mention of any specific shares or bonds should not be taken as a recommendation to deal.

Important Notes

19

Notice for investors in Israel

This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.

The Prospectus of the Funds has not been approved by the Israel Securities Authority and may only be distributed to Israeli residents in a manner that does not constitute "an offer to the public" under sections 15 and 15a of the Israel Securities Law, 5728-1968 ("the Securities Law") or section 25 of the Joint Investment Trusts Law, 5754-1994 ("the Joint Investment Trusts Law "), as applicable.

Consequently, the Funds may only be offered to a limited number of investors (35 investors or fewer during any given 12 month period) and/or those categories of investors listed in the First Addendum ("the Addendum") to the Securities Law, ("Sophisticated Investors") namely joint investment funds or mutual trust funds, provident funds, insurance companies, banking corporations (purchasing Funds for themselves or for clients who are Sophisticated Investors), portfolio managers (purchasing Funds for themselves or for clients who are Sophisticated Investors), investment advisors or investment marketers (purchasing Funds for themselves), members of the Tel-Aviv Stock Exchange (purchasing Funds for themselves or for clients who are Sophisticated Investors), underwriters (purchasing Funds for themselves), venture capital funds engaging mainly in the capital market, an entity which is wholly-owned by Sophisticated Investors, corporations, (other than formed for the specific purpose of an acquisition pursuant to an offer), with shareholder equity in excess of NIS 50 million, and individuals in respect of whom the terms of item 9 in the Schedule to the Investment Advice Law hold true investing for their own account, each as defined in the said Addendum, as amended from time to time, and who in each case have provided written confirmation that they qualify as Sophisticated Investors, and that they are aware of the consequences of such designation and agree thereto; in all cases under circumstances that will fall within the private placement or other exemptions of the Joint Investment Trusts Law, the Securities Law and any applicable guidelines, pronouncements or rulings issued from time to time by the Israel Securities Authority.

This Document may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Any offeree who purchases a Fund is purchasing such Fund for its own benefit and account and not with the aim or intention of distributing or offering such Fund to other parties (other than, in the case of an offeree which is a Sophisticated Investor by virtue of it being a banking corporation, portfolio manager or member of the Tel-Aviv Stock Exchange, as defined in the Addendum, where such offeree is purchasing Fund for another party which is a Sophisticated Investor). Nothing in this Document should be considered investment advice or investment marketing as defined in the Regulation of Investment Counselling, Investment Marketing and Portfolio Management Law, 5755-1995.

Investors are encouraged to seek competent investment counselling from a locally licensed investment counsel prior to making the investment. As a prerequisite to the receipt of a copy of this Document a recipient shall be required by the Issuer to provide confirmation that it is a Sophisticated Investor purchasing Funds for its own account or, where applicable, for other Sophisticated Investors.

This document is a marketing communication. The research and analysis included in this document have not been prepared in accordance with the legal requirements designed to promote its independence and have been produced by Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.

This presentation and its contents are confidential and proprietary. The information provided in this presentation is for the sole use of those attending the presentation. It may not be reproduced in any form or passed on to any third party without the express written permission of Threadneedle Investments. This presentation is the property of Threadneedle Investments and must be returned upon request.

Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242, 74, rue Mühlenweg, L-2155 Luxembourg, Grand Duchy of Luxembourg.

In the UK issued by Threadneedle Asset Management Limited. Registered in England and Wales, Registered No. 573204, 60 St Mary Axe, London EC3A 8JQ, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority.

Threadneedle Investments is a brand name and both the Threadneedle Investments name and logo are trademarks or registered trademarks of the Threadneedle group of companies.

Important Notes (2)

20


The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested.

Where references are made to portfolio guidelines and features, these are at the discretion of the portfolio manager and may be subject to change over time and prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement.

Please note that the performance target may not be attained.

The research and analysis included in this document has been produced by Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.

This presentation and its contents are confidential and proprietary. The information provided in this presentation is for the sole use of those attending the presentation. It may not be reproduced in any form or passed on to any third party without the express written permission of Threadneedle Investments. This presentation is the property of Threadneedle Investments and must be returned upon request.

This presentation is not investment, legal, tax, or accounting advice. Investors should consult with their own professional advisors for advice on any investment, legal, tax, or accounting issues relating an investment with Threadneedle.

Important Information

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