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If beta becomes risky:Alpha to hedge anddiversify againstincreasing correlation.

Asbjrn Trolle Hansen

February 2010

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Multi Asset Investment approach

Implementation of Asset Allocation

Nordea Multi Asset Fund

Agenda

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Multi Asset Investment approach

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Multi Assets investment strategy: Based on asset allocation in 9 dimensions

1.

Curren-cies

Multi Assets Core Investment Strategies

2.

Equityvs. FI

3.

EquityCountry

4.

EquityIndustry

5.

EquityCluster

6.

EquityStable

7.

FI Credit

8.

FI AssetAlloc.

9.

Commo-dities *

Team

More than 25 investment professionals Proven asset allocation approach run by experienced team

Strong track record across strategies

* Exposure to commodities to be implemented at a later stage for the Multi Asset Fund

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Multi Assets approach: Focus on value creation

Traditional Approach Multi Assets Approach

Strategy Top down approach

Based on business cycles

Bottom up asset pricing

Information Flow, Relative Value, Equilibrium Pricing

Diversification Few strategies with high

correlation Asset allocation across nine core investment

strategies with low correlation

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Overview: Strategic and Tactical Asset Allocation

Time

Tactical Asset Allocation

3M 3Y

1Y

Information Flows

Strategic Asset Allocation

Relative Value Equilibrium

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Earnings growth 2010

Long bond yields Trend *) Trailing (reported) 09 est Mean (2010)

4,1% 45 % 9 % 13 % 43 %

4,3% 40 % 5 % 9 % 38 %

4,5% 36 % 2 % 6 % 34 %

4,7% 31 % -1 % 2 % 30 %

4,9% 27 % -4 % -1 % 26 %

5,1% 23 % -7 % -4 % 22 %

5,3% 20 % -10 % -7 % 18 %

5,5% 16 % -12 % -9 % 15 %

5,7% 13 % -15 % -12 % 12 %

EPS, S&P 500: 77,0 57,9 60,0 76,0

Expected Performance if the market should reach Fair value at end of 2010:

Valuation (US stocks)

4,5%

-0,6 %

3,5 %

-2,2 %

5,2%

-4,0 %

-2,0 %

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

30Y Govt bond

Taxes

RiskPremium

Inflation

Cost of Capital

Fair Value:

P/E = 1 / 5,2% = 19,3

Valuation today:

P/E = S&P500/Est earn 2010

= 1097 / 76 = 14,4

Price target end10: 34 %

Valuation

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Normalised Valuation

S&P 500 Earnings

-

5

10

15

20

25

Q1,

88

Q2,

89

Q3,

90

Q4,

91

Q1,

93

Q2,

94

Q3,

95

Q4,

96

Q1,

98

Q2,

99

Q3,

00

Q4,

01

Q1,

03

Q2,

04

Q3,

05

Q4,

06

Q1,

08

Q2,

09E

Q3,

10E

Quarter

lyEarnings

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

NetDebtSe

rviceCosttoEBITS&P Operating Earninbgs

US GDP implied earnings

Debt service cost / EBIT

S&P 500 Earnings

-

5

10

15

20

25

Q1,

88

Q2,

89

Q3,

90

Q4,

91

Q1,

93

Q2,

94

Q3,

95

Q4,

96

Q1,

98

Q2,

99

Q3,

00

Q4,

01

Q1,

03

Q2,

04

Q3,

05

Q4,

06

Q1,

08

Q2,

09E

Q3,

10E

Quarter

lyEarnings

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

NetDebtSe

rviceCosttoEBITS&P Operating Earninbgs

US GDP implied earnings

Debt service cost / EBIT

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Current Year US Earnings Estimates

Market: 0,8 %Energy 0,4 %Materials 1,6 %Industrials 0,8 %Consumer discretionary 1,2 %Consumer Staples 0,2 %Healthcare -0,1 %Financials -3,4 %Technology 4,6 %Telecom -0,3 %

Utilities -0,1 %

Next Year

Market: 0,9 %Energy 2,3 %

Materials 1,9 %

Industrials 0,8 %

Consumer discretionary 1,1 %

Consumer Staples 0,0 %

Healthcare -0,1 %

Financials -1,6 %

Technology 3,7 %

Telecom -0,9 %Utilities -0,5 %

US Earnings Estimates

US Sales Estimates


Materials 0,5 %

Industrials 0,2 %Consumer discretionary 0,2 %


Healthcare 0,1 %

Financials 0,5 %

Technology 1,3 %

Telecom 0,0 %

Utilities -0,8 %

Next Year US Sales Estimates


Materials 1,3 %

Industrials 0,4 %

Consumer discretionary 0,4 %


Healthcare 0,2 %

Financials 0,6 %

Technology 1,6 %

Telecom 0,1 %Utilities -1,3 %

Current Year

Cross checking on fundamental momentum

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PE 12m fwd

0,0 5,0 10,0 15,0 20,0 25,0

US Small Cap (Russel 2000)

MSCI Japan

MSCI Taiwan

Denmark (KFX)

Finland (FNHEXPO)

Sweden (OMX)

Australia (SP200)

MSCI Singapore

MSCI Malaysia

MSCI Mexico

US (S&P500)

Poland (WIG20)

Hong Kong (HSI)

MSCI Brazil

Germany (DAX)

Switzerland (SMI)

UK ( FT100)

MSCI EMU

France (CAC40)

H-Shares

Norway (MSCI)

EuroStoxx 50

MSCI Thailand

Hungary (B UX)

MSCI Korea

MSCI Turkey

Russia (RTS)

OECD PPP

Mexican Peso

New Turkish Lira

Po lish Zloty

South Korean Won

Hungarian Forint

Iceland Krona

British Pound

New Zealand Dollar

Canadian Do llar

Euro

Japanese Yen

Swedish Krona

Australian Dollar

Swiss Franc

Norwegian Krone

Danish Krone

-80% -60% -40% -20% 0% 20% 40% 60%

Source: Datasream IBES january 8th 2010. US = S&P 500, Korea = MSCI Korea Source: Bloomberg January 12th 2010

Getting it aggressively, or

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Despite recent positive returns of Stable Equities the earnings and dividend yields are still fairly highcompared to bond yields

We are confident that Stable Equities have clear support on valuation because the implied risk

premium is relatively high and earnings are more visible

Cash flows from stable companies have proven historically to be inflation protected and assuch could maybe even be compared to low real rates

Source: Datastream and Bloomberg. Data as of ultimo December 2009.

Earnings rev isionsrevisions f or 2010 earnings

75

80

85

90

95

100

105

jan-09

mar

-09maj

-09jul-09

Stable equities MSCI World

ValuationP/E 12 month fw d

6,00

8,00

10,00

12,00

14,00

16,00

18,00

sep-07

nov-07

jan-08

mar

-08maj

-08jul-08

sep-08

nov-08

jan-09

mar

-09maj

-09jul-09

MSCI World Stable equities

getting it defensively

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Implementation of Asset Allocation

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Tactical Asset Allocation: Tools & Output

Only TAA core bets can be used to operate within themax/min constraints

A more diversified TAA process can be obtained byincluding the Multi Asset Fund

To take all TAA risk through the Multi Asset Fund is theidea behind the VaR based approach

FX

EQ Cluster

Commodities

EQ vs FI

EQ Country

EQ Industry

EQ Stable

Credit AA

FI AA

MultiAssetFund

EQ

FI

TAA core bets

TAA core(+) bets

Strategies

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Bonds 40%

Emerging Markets bonds

45%

5%

Equities

Local 0%

Global 45%

Total Assets 100%

Benchmark

30%

0%

10%

0%

0%

Min

60%

10%

60%

10%

60%

Max

5%

High Yield bonds

0% 10%

Investment grade bonds 5% 0% 10%

Investment Guidelines

Example of traditional balanced mandate

Benchmark portfolio is found by using theOptimiser (efficient frontier)

Risk budget for TAA is defined by min and max

restrictions on the individual asset classes (oralternatively by a tracking error limit). Inevitably theabsolute risk level will vary over time.

Performance is measured as the differencebetween the portfolio and the BM. BM performanceis based on performance of relevant indices e.g.

MSCI world for Global Equities and EFFAS forbonds.

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Investment Process Max Loss Based

SAAMax Loss

TAAMax Loss

TotalMax Loss

distributedon the

differentrisk types

Part of total assets is allocated to the Multi Asset Fundaccording to the defined TAA risk budget

The Multi Asset Fund secures operational efficientexposure to the best 20-30 tactical strategies

MultiAssetFund

Dynamic SAA portfolio (uses 10Y return expectations)updated every quarter and re-optimised for a given

SAA Max Loss level

Max loss target on the SAA part determined by theoverall risk budget

Strategic strategies mainly implemented through funds

Description

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PF3PF2

PF1

Optimal SAA Portfolios

Expected Return

3.9%

4.5%5.6%

8.6%

10.1%

10.0%

Expected Risk

3.6%

3.0%8.2%

15.3%

20.0%

10.0%

Asset Class

Bonds

Government & Mortgage (50/50)

European Investment GradeGlobal High Yield

Stocks

Global Stocks

Emerging Markets Stocks

TAA-Overlay

Multi Asset Fund

Expected Return

Expected Risk

Total

Bonds

Stocks

Value-at-Risk 99%, 1Y

Value-at-Risk 99%, 1Y, MEUR

PF1

49.9%

15.8%4.3%

17.8%

12.2%

-

5.6%

5.8%

100.0%

70.0%

30.0%

7.8%

78.0

PF2

40.5%

15.3%4.2%

22.9%

17.1%

-

6.2%

7.3%

100.0%

60.0%

40.0%

10.5%

105.4

PF3

31.2%

14.7%4.1%

27.9%

22.1%

-

6.7%

8.8%

100.0%

50.0%

50.0%

13.4%

134.2

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Allocation between SAA and TAA VaR

PF2

40.5%

15.3%4.2%

22.9%

17.1%

-6.2%

7.3%

100.0%

60.0%

40.0%

10.5%105.4

105.4

0.0

100.0%

0.0%

Asset Class

Bonds

Europe Gov. & Mort. (50/50)

European Inv. GradeGlobal High Yield

Stocks

Global Stocks

Emerging Markets Stocks

TAA-Overlay

Alpha 10Expected Return

Expected Risk

Total

Bonds

Stocks

VaR 99%, 1YVaR Total PF 99%, 1Y, MEUR

VaR SAA PF 99%, 1Y, MEUR

VaR TAA PF 99%, 1Y, MEUR

Strategic Share in Risk

Tactical Share in Risk

Allocation to TAA from BondsAllocation to TAA from Stocks

PF2 + TAA1

34.8%

14.8%4.5%

21.6%

16.4%

7.9%6.5%

7.4%

100.0%

54.1%

38.0%

10.5%105.4

94.9

10.5

90.0%

10.0%

74.3%25.2%

PF2 + TAA2

29.2%

14.4%5.1%

20.1%

15.3%

15.9%6.9%

7.5%

100.0%

48.7%

35.4%

10.5%105.4

84.3

21.1

80.0%

20.0%

71.1%29.0%

PF2 + TAA3

24.1%

13.8%5.6%

18.6%

14.1%

23.8%7.2%

7.7%

100.0%

43.5%

32.7%

10.5%105.4

73.8

31.6

70.0%

30.0%

69.2%30.6%

Value-at-Risk 99% Risk Contribution, MEUR

0

20

40

60

80

100

120

105.4

PF2

94.9

10.5

PF2+TAA1

84.3

21.1

PF2+TAA2

73.8

31.6

PF2+TAA3

Strategic Risk Budget Tactical Risk Budget

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Asset allocation overlay versusMedium Risk Balanced Fund **

* Bonds: Effas 3-5Y; Global Equities: MSCI World NDR

50% Bonds / 50% Global Equities *

Asset allocation overlay clearly outperforms a medium risk balanced fundAsset allocation overlay versus

Efficient Frontier

Asset allocation overlay (10% vol.)

** Returns are based on an exposure weighted composite of actual overlay accounts for periods January 2004 through to December 2006. During the periods January 2007 through December 2007, returns are based on the Alpha 15 fund with returnsscaled to 10% target volatility. Return figures are shown net of administrative and transaction costs, management fee (1.0% p.a.), and performance fee (20%). Returns for January 2008 and onward are actual (net of fees) results of the Alpha 10 fundshare class B (EUR) for institutional clients. Past performance is not indicative of future returns.

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2004 2005 2006 2007 2008 2009

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

0% 2% 4% 6% 8% 10% 12% 14%

Expected Risk

ExpectedReturn

PF2 + TAA1PF2 PF2 + TAA2 PF2 + TAA3

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Nordea Multi Asset Fund

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Domiciled in Luxembourg, regulated by CSSF under UCITs higher diversification rules

Use of liquid instruments only: No illiquid assets (CDOs, ABS, loans, private equity, etc.)

Exposure is measured by Value at Risk (VaR)

Dynamic risk management: If volatility is high, leverage limits are reduced, effectively

controlling the risk for the fund

The Fund will not borrow securities or cash to create leverage

Any short exposure will only be achieved via the use of derivatives

Rigorous stress testing: Extreme market scenario tests are conducted on a regular basis

Counterparty risk: Cash at risk with brokers (margins on derivatives) is monitored under

strict UCIT rules

Multi Asset Fund (UCIT III): Comparison with traditional non-UCIT Hedge funds

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Most investors continue to bet their risk budget on the optimization of a limited number

of beta risks. Why?

The alpha based Multi Asset approach creates superior risk adjusted returns through

bottom up asset pricing and diversification across nine low correlated strategies.

The Nordea 1 Multi Asset Fund encapsulates the complexity of the TAA overlay

in a UCIT III compliant fund allowing for an easy implementation.

Allocating risk budget to an alpha based TAA overlay offers higher return potential than

a pure beta based SAA portfolio without increasing the overall risk budget.

Summary

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Appendix

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Alpha 10 Fund

Positive Months 49 of 72 68.1%

Monthly Annually

Standard Deviation 2.11% 7.32%

Downside Deviation 1.21% 4.19%

Value at Risk (95% Confidence) 2.67% 2.26%

Value at Risk (99% Confidence) 4.11% 7.25%

Annualised Performance

EUR

December 31, 2009

Characteristics

This report is for the period Jan 1, 2004 to Dec 31, 2009. Performance and risk figures are based on calculations using monthly time intervals with all figures for periods greater than 1 year annualised. Returns are based on an exposure weightedcomposite of actual overlay accounts for periods January 2004 through to December 2006. During periods January 2007 through December 2007, returns are based on the Cayman Island domiciled Alpha 15 fund. Returns for the series are scaled to 10target volatility with estimated transaction costs of 0.30% p.a. Return figures are shown net of administrative and transaction costs, management fee (1.0% p.a.), and performance fee (20%). Returns for January 2008 and forward are actual (net of fees)results of the Luxembourg domiciled Alpha 10 fund share class B (EUR) for institutional clients. Past performance is not indicative of future returns.

-6,00%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

Jan04

Apr04

Jul04

Okt04

Jan05

Apr05

Jul05

Okt05

Jan06

Apr06

Jul06

Okt06

Jan07

Apr07

Jul07

Okt07

Jan08

Apr08

Jul08

Okt08

Jan09

Apr09

Jul09

Okt09

Monthly Return

Currency:

End date:

Sharpe Ratio 0.96

Period Product Volatility

1 year 16.46% 7.24% 2.27

2 years 5.28% 8.17% 0.65

3 years 5.42% 7.44% 0.73

5 years 9.90% 7.11% 1.39

SinceInception

9.79% 7.32% 1.34

Annual Performance

Product VolatilityReturn/ Risk

Ratio

2005 23.60% 4.45% 5.30

2006 10.74% 7.17% 1.50

2007 5.69% 5.69% 1.00

2008 -4.82% 8.02% -0.60

2009 16.46%

Return/ RiskRatio

Period

NoteMulti Asset Fund performance:

January 2010: -2.4%

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Keskuskatu 3A

FI-00020 HelsinkiFinland

+358 9 165 48302

Regerinsgatan 59

SE-10571 StockholmSweden

+46 8 579 42000

Strandgade 3

DK-1401 Copenhagen KDenmark

+45 3333 3001

Essendropsgate 9

NO-0368 OsloNorway

+47 2248 6670

Hauptstrasse 15

D-61462 KnigsteinGermany

+49 61 74 968 60

55 Basinghall Street

London EC2V 5NBUnited Kingdom

+44 (0)20 7726 9151

437 Madison Avenue

New York, NY 10022United States

+1 212 603 2852

Nordea Investment Management

Compliance Statement and Other Information

As you will be aware the new legislation on investment services according to the new EU Directive, called The Markets in Financial Instruments Directive (MiFID) in European Economic Area (EEA), covering all EU member states and Norway

became effective on 1 November 2007.The purpose of MiFID is to increase consumer protection and transparency in investment services. The new legislation obliges al l institutions offering investment services to categorise their customers as Non Professional Customers, ProfessionalCustomers or as Eligible Counterparties.As an investor, we have categorised you as a Professional investor.Please note that this material is intended as general information to the recipient. No representation is made that the estimates, data or information herein are complete and the information can be subject to change without notice. The reader mustinterpret the information himself/herself and is encouraged to discuss the assumptions with Nordea Investment Management. Nordea Investment Management does not assume any responsibility and cannot be held responsible for the informationcontained in this document. Similarly Nordea Investment Management cannot in any way be held liable for any effects caused by using any part of the information in the document.

Jan [email protected]

Tel: +49 6174 9686 81

Hans C. [email protected]

Tel: +49 6174 9686 96

Bjrn I. [email protected]

Tel: +49 6174 9686 82

Contact for institutional investors and segregated mandates

Nordea Investment Management AG

Hauptstrasse 15D-61462 Knigstein im Taunus

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Contact for third-party and SICAV investors

Die genannten Teilfonds sind Teil von Nordea 1, SICAV, einer offenen Investmentgesellschaft luxemburgischen Rechts. Den ausfhrlichen und die vereinfachten Nordea 1, SICAVVerkaufsprospekte und unseren aktuellen Jahresbericht/Halbjahresbericht erhalten Sie kostenlos in Papierform bei unserer Vertriebsstelle in Luxemburg, bei der Zahl- undInformationsstelle in Deutschland oder bei den berechtigten Vertriebsstellen. Zahl- und Informationsstelle in Deutschland ist Nordea Bank Finland plc, Niederlassung Deutschland,Grneburgweg 119, D-60323 Frankfurt am Main. Fremdwhrungsanlagen sind Wechselkursschwankungen unterworfen. Fonds, die in Schwellenlnder anlegen, sind grerenKursschwankungen ausgesetzt. Nordea Investment Funds S.A. verffentlicht ausschlielich produktbezogene Informationen und erteilt keine Anlageempfehlungen. Herausgeber:Nordea Investment Funds S.A., 562, rue de Neudorf, P.O. Box 782, L-2017 Luxemburg. Weitere Informationen bei Ihrem Anlageberater er bert Sie als ein von Nordea InvestmentFunds S.A. unabhngiger Berater. Wertentwicklung errechnet von Nettoanteilswert zu Nettoanteilswert in EUR, bei Wiederanlage der Ertrge, ohne Bercksichtigung desAusgabeaufschlages. Stand 29.01.2010. Wertentwicklungen in der Vergangenheit sind keine Garantie fr zuknftige Ertrge. Der Wert der Anteile kann schwanken und wird nichtgarantiert. Alle geuerten Meinungen sind, falls keine anderen Quellen genannt werden, die von Nordea Investment Funds S.A. Diese Prsentation darf ohne vorherige Erlaubnis

weder reproduziert noch verffentlicht werden. In diesem Dokument genannte Unternehmen werden zu rein illustrativen Zwecken angefhrt und stellen keine Aufforderung zum Kaufoder Verkauf der jeweiligen Werte dar.

Christan BetzelVertriebsdirektor Institutionelle Kunden

Nordea Fonds Service GmbHBonner Str. 323D-50968 Kln

Tel: 0221 / 168070-11Mobil: 0173 / 5804337Fax: 0221 / 168070-27

[email protected]

Thomas MarnerVertriebsdirektor Institutionelle Kunden

Nordea Fonds Service GmbHBonner Str. 323D-50968 Kln

Tel: 0221 / 168070-12Mobil: 0151 / 11640002Fax: 0221 / 168070-27

[email protected]

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