1 global investment management Market update & Harmony funds review Glyn Owen June 2012

1global investment management

Market update & Harmony funds review

Glyn Owen

June 2012

2 global investment management

1. Market environment


This century has been bad for equity investing……

Source: Bloomberg, June 2012

0

20

40

60

80

100

120

140

160

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

Per

form

ance

reb

ased

to

100

MSCI Daily TR Net World USD

10.1%


……but not for government bonds


0

1

2

3

4

5

6

7


Yie

ld

US Generic Govt 10 Year Yield

133.3%


Asset class returns YTD 2012


5.5%

3.6%3.1%

1.3%0.5% 0.2%

-0.2%

-8.0%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%H

igh

yie

ld

Go

ld

Inve

stm

ent g

rade

fixed

inco

me

Glo

bal d

evel

oped

mar

ket e

qui

ties

Glo

bal G

over

nmen

tbo

nd

s

Cas

h

Glo

bal e

mer

ging

mar

ket e

qui

ties

Co

mm

odi

ties

USD


MSCI World since January 2008


0

20

40

60

80

100

120

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

Per

form

ance

reb

ased

to

100

MSCI Daily TR Net World USD


10 year government bond yield since January 2008


Jan 08 Jan 09 Jan 10 Jan 11 Jan 12

0

1

2

3

4

5

6

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

Yie

ld


Map of the markets over the past three months


US UK Europe ex UK JapanPacific ex

JapanEmerging Markets

Developed World Index

Energy -14.9% -14.6% -17.0% -19.8% -21.5% -25.9% -15.0%Materials -9.3% -22.0% -11.2% -18.6% -22.5% -22.0% -14.4%Industrials -6.1% -4.2% -12.7% -15.3% -15.8% -16.3% -9.0%Consumer Discretionary -1.4% -2.2% -9.4% -13.6% -12.0% -12.6% -5.1%Financials -5.0% -14.1% -22.1% -18.3% -12.6% -16.3% -10.4%IT -5.1% -13.3% -11.7% -16.7% -16.8% -9.5% -6.6%Telecoms 7.5% 0.9% -17.2% -6.4% -2.9% -10.3% -2.3%Health Care 0.1% -1.7% -0.1% -8.4% 0.0% -6.2% -0.6%Consumer Staples 1.2% -2.5% 0.6% -0.3% -11.1% -7.4% 0.4%Utilities 2.8% 4.1% -19.0% -14.1% -6.5% -16.4% -4.2%

Country / Region (Local) -3.7% -8.0% -9.0% -13.4% -6.3% -8.5% -6.4%Country / Region (USD Terms) -3.7% -11.4% -16.0% -10.6% -13.0% -15.1% -8.3%

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


Asset class / region Index Currency Local currency USD

Equities

United States S&P 500 NR USD 5.3% 5.3%

United Kingdom FTSE All Share TR GBP -0.2% -0.7%

Continental Europe MSCI Europe ex UK NR EUR -1.4% -5.1%

Japan Topix TR JPY -0.3% -3.0%

Global MSCI World NR USD 2.4% 1.3%

Global emerging markets MSCI EM (Emerging Markets) NR USD 1.7% -0.2%

Performance to 6 June 2012





Bonds

Government Bonds

US Treasuries JP Morgan United States GBI TR USD 1.7% 1.7%

US Treasuries (inflation protected) Barclays Capital U.S. Govt Inflation Linked TR USD 4.8% 4.8%

UK Gilts JP Morgan United Kingdom GBI TR (daily) GBP 2.6% 2.1%

Euro Government Bonds Citigroup EMU GBI TR EUR 4.9% 1.0%

Global Government Bonds JP Morgan Global GBI TR USD 1.6% 0.5%

Corporate Credit

US Corporate (investment grade) Barclays Capital U.S. Corp Investment Grade TR USD 3.6% 3.6%

US High Yield Barclays Capital U.S. High Yield 2% Issuer Cap TR USD 4.5% 4.5%

Other

Global Bonds Citigroup WorldBIG TR USD USD 3.1% 5.9%

Global Convertible Bonds UBS Global Convertible Bond USD USD 3.0% 3.0%

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






Property

US Property Securities MSCI US REIT NR USD 9.5% 9.5%

UK Property Securities FTSE EPRA/NAREIT United Kingdom TR GBP 10.3% 9.7%

Europe ex UK Property Securities FTSE EPRA/NAREIT Developed Europe ex UK TR EUR 8.0% 4.0%

Asia Property Securities FTSE EPRA/NAREIT Developed Asia TR USD 15.0% 10.8%

Global Property Securities FTSE EPRA/NAREIT Developed TR USD 9.7% 9.7%

Commodities & Alternatives

Commodities RICI TR USD -8.0% -8.0%

Agricultural Commodities RICI Agriculture TR USD -8.7% -8.7%

Oil ICE Crude Oil CR USD -8.4% -8.4%

Gold Gold Index USD 6.8% 6.8%



10 year government bond spreads vs. Germany


0

100

200

300

400

500

600


Sp

read

(bas

is p

oin

ts)

Italy Spain France


German vs. Spanish 10 yr government bond yields


January 2000 to date

0

1

2

3

4

5

6

7

8


Yie

ld (%

)

German government 10 year Spanish government 10 year


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

Per

form

ance

reb

ased

to

100

S&P 500 Index Shanghai Composite


Performance of Gold, Copper and Oil


0

50

100

150

200

250


Per

form

ance

reb

ased

to

100

Gold spot ($/OZ) LME copper spot ($) WTI Cushing crude oil spot ($)


Currencies vs. USD


50

70

90

110

130

150

170


US

D p

er G

BP

, US

D p

er E

UR

, U

SD

per

Yen

EUR GBP JPY


2. Market outlook


Three critical issues

• Sustainability of growth in the US

• Structural slowdown in China – or hard landing?

• European imbalances


US economic momentum is reasonable

US labour market


0

100

200

300

400

500

600

700

800

Jan 80 Jan 83 Jan 86 Jan 89 Jan 92 Jan 95 Jan 98 Jan 01 Jan 04 Jan 07 Jan 10

Num

ber o

f cla

ims

(tho

usan

ds)

US Initial Jobless Claims SA


US construction: the only way is up?


2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

Mar 52 Mar 56 Mar 60 Mar 64 Mar 68 Mar 72 Mar 76 Mar 80 Mar 84 Mar 88 Mar 92 Mar 96 Mar 00 Mar 04 Mar 08 Mar 12

%

US Residential Investment % of GDP

4

504

1004

1504

2004

2504

3004

Jan 59 Jan 63 Jan 67 Jan 71 Jan 75 Jan 79 Jan 83 Jan 87 Jan 91 Jan 95 Jan 99 Jan 03 Jan 07 Jan 11

Vo

lum

e (t

ho

usan

ds)

US New Privately Owned Housing Starts


US consumer confidence


0

20

40

60

80

100

120

140

160

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

Ind

ex le

vel

US consumer confidence


One issue that will need to be tackled after November


US budget deficits

-12

-10

-8

-6

-4

-2

0

2

4

Jan 92 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Jan 12

% G

DP

US budget deficits


China is landing

Source: SocGen April 2012

GDP and industrial production

0%

2%

4%

6%

8%

10%

12%

14%

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

0%

5%

10%

15%

20%

25%

Chinese GDP (LHS)

Chinese IP (RHS)


Export sector flatlining

Source: Bloomberg, April 2012

Chinese global exports (Real $)

Jan

00

Dec

00

Dec

01

Dec

02

Dec

03

Dec

04

Nov

05

Nov

06

Nov

07

Nov

08

Nov

09

Nov

10

Oct

11

Oct

12

Oct

13

70

700


Imports slowing

Source: SocGen April 2012

Chinese global imports (Real $)


Credit tighter than during Lehmans


Chinese money supply

0

5

10

15

20

25

30

35

40

45

Dec 94 Dec 96 Dec 98 Dec 00 Dec 02 Dec 04 Dec 06 Dec 08 Dec 10 Dec 12

Mo

ney

sup

ply

gro

wth

%

M1 YoY M2 YoY


Property bubble bursting?

Source: Deutsche Bank, Soufun,.com, June 2012

Chinese property prices are falling (and few property downturns have ended well)


Monetary easing in emerging markets


0%

5%

10%

15%

20%

25%

Oct 07 Apr 08 Oct 08 Apr 09 Oct 09 Apr 10 Oct 10 Apr 11 Oct 11 Apr 12

China RRR China 1 Year Best Lending Rate Brazil Selic Target Rate Reserve Bank of India Reverse REPO Yield


Europe’s LTRO bounce is already slipping back


Citigroup’s Economic Surprise Index (EU)

-200

-150

-100

-50

0

50

100

150

200

Jun 08 Jun 09 Jun 10 Jun 11 Jun 12

Z-s

core

Positive surprises


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

Dec 00

Dec 01

Dec 02

Dec 03

Dec 04

Dec 05

Dec 06

Dec 07

Dec 08

Dec 09

Dec 10

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 Dec 96 Dec 98 Dec 00 Dec 02 Dec 04 Dec 06 Dec 08 Dec 10

Ind

ustr

ial P

rodu

ctio

n (r

ebas

ed to

100

Jan

uary

199

5)

US Germany Italy


Structural reforms


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 / SMP / rate cut

• Fiscal union


Equity market valuations


Price/ Consensus earnings estimates

Dividend yield10-year Government

bond yields

United States 12.6 2.3% 1.7%

Eurozone 8.6 5.7% 1.3%

United Kingdom 9.6 4.5% 1.7%

Germany 9.2 4.5% 1.3%

Japan 12.7 2.5% 0.8%

Hong Kong 9.5 4.1% 1.0%

Australia 12.0 5.2% 3.0%


MSCI World P/E ratio since 1995


0

5

10

15

20

25

30

35

40

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

P/E

ratio

MSCI World


MSCI World price to book 1995


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12

P/B

ratio

MSCI World


Tail wind of EM re-valuation now behind us


MSCI World PB vs. MSCI GEM PB

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

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

P/B

ratio

MSCI World MSCI Emerging Markets


Shiller PEs tell a similar story

Trend PEs by region

Source: Citi, January 2012


High Yield Bond Spreads January 2008 to today


4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%


Ave

rag

e O

AS

Barclays US Corporate High Yield Average OAS


Investment implications

• Interest rates to stay low for years

• US:• fiscal consolidation post election• growth risk in 2013

•China:•structural slowdown underway•emerging markets generally slowing•needs internal demand to pick up•room for monetary loosening

• Europe:• stress / intervention cycle to continue• political will to preserve euro muddle

through• but risks are high


Summary

•‘New normal’ is now the consensus

• Global rebalancing set to continue for years

• We are five years into the deleveraging / rebalancing process

• Policy risks are high

• Likelihood of further monetary loosening

• The crisis has presented an extraordinary valuation opportunity

• After a decade of disappointments, equities will now surpass expectations


Predictions for end 2012

• Low growth environment- Global GDP growth 2-3%- Subdued inflation

• Low return expectations- cash close to zero- safe haven bonds 1-2%- credit & high yield 3-6%- equities 7-9%

• Valuation opportunity tactically

• Overall single digit returns expected


3. Harmony funds


Introduction

• 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

June 2012

Global Equity10%

Local Equity30%

Global Bonds10%

Local Government Debt30%

Global Property10%

Cash10%


Harmony Growth Fund strategic allocation

June 2012

Global Equity15%

Local Equity50%

Global Bonds

5%

Local Government Debt15%

Global Property10%

Cash5%


Summary performance May 2012

May 2012..Past performance is not indicative of future returns.

3 months Year to dateBenchmark year

to datePeer rank year to

date

Harmony Asian Balanced -6.1% 1.9% 1.6% 7/17

Harmony Asian Growth -8.1% 2.0% 1.8% 7/17

Harmony AUD Growth 0.7% 4.3% 5.2% 3/16

Harmony Euro Balanced -2.0% 3.4% 3.7% 8/10

Harmony Sterling Balanced -2.8% 0.4% 1.8% 20/28

Harmony Sterling Growth -5.2% -0.8% 1.1% 22/25

Harmony US Dollar Balanced -3.6% 1.5% 3.3% 10/18

Harmony US Dollar Growth -4.5% 1.9% 3.9% 6/18


Harmony US Dollar Balanced asset allocation

May 2012

Equity26.0% Equity

22.0%

Equity31.0%

Equity33.1%

Equity40.3%

Equity41.3%

Equity40.4%

Equity39.2%

Equity40.0%

Fixed Income31.0% Fixed Income

34.0%


40.0%

Fixed Income34.6%


29.3%

Fixed Income34.7%

Fixed Income40.0%

Alt. Investments24.0%





Property11.0%

Property4.0%

Property11.0%

Property9.5%

Property9.6%

Property10.8%

Property9.5%

Property9.8%

Property10.0%

Cash8.0%

Cash15.0%

Cash4.0%

Cash13.5%

Cash13.0% Cash

16.6% Cash20.8%

Cash16.3%

Cash10.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec-07 Dec-08 Dec-09 Dec-10 Jun-11 Dec-11 Mar-12 May-12 Benchmark


Harmony US Dollar Balanced currency allocation

May 2012

USD79.0%

USD92.0%

USD71.0%

USD78.9%

USD70.5%

USD77.8%

USD82.3%

USD81.9%

USD82.8%

EUR7.0%

EUR1.0%

EUR9.0%

EUR7.2%

EUR9.1%

EUR7.1%

EUR5.6%

EUR6.0%

EUR6.3%

GBP 1.0%

GBP 4.0%

GBP 3.0%

GBP 3.0%

GBP 5.4%

GBP 3.2%GBP 2.4% GBP 2.2%

GBP 3.1%JPY 5.0%

JPY 7.0%

JPY 4.4%

JPY 4.4%JPY 2.3%

JPY 1.8% JPY 1.7%JPY 3.2%

Other 8.0%Other 3.0%


Other 10.6% Other 9.6% Other 7.9% Other 8.2%Other 4.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Balanced

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

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Har

mo

ny

fun

d p

erce

ntag

e ra

nk

3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony US Dollar Balanced Peer Rank 9/18 10/18 7/18 8/16 4/15 8/12 3/11 2/11 4/11

Fund Performance -3.6% 1.5% -1.5% 5.6% 20.0% -27.2% 6.7% 13.2% 4.7%

Peer Max 0.7% 5.0% 1.6% 12.2% 25.2% -6.7% 7.8% 13.5% 14.2%

Peer Min -10.9% -7.0% -18.8% -2.6% -0.7% -36.2% 2.1% 5.0% 0.8%

Peer Median -3.7% 1.5% -3.9% 5.5% 16.1% -23.4% 5.4% 9.2% 3.4%


Harmony US Dollar Balanced manager performance

May 2012

Performance in USD Weight 3 months 6 months 12 months

Artisan Global Value 0.9% -4.9% 2.6% -4.1%

Momentum IF Global Equity 7.5% -9.6% -0.4% -12.9%

Morgan Stanley Global Brands 1.9% -5.6% 4.0% -2.2%

BlackRock US Index 4.1% -3.6% 6.1% -0.8%

Yacktman US Equity 9.5% -3.0% 3.4% -1.5%

Hotchkis & Wiley US Value 5.0% -7.6% 10.2% -5.9%

Wells Fargo US All Cap Growth 9.2% -4.5% 7.1% 3.9%

Momentum IF Global Emerging Markets 1.3% -18.2% -9.0% -27.8%

Equity 39.2%

Old Mutual Dublin Global Bond 10.2% 0.1% 2.1% 5.1%

RWC Global Convertibles 8.2% -4.3% 2.7% -5.1%

BlackRock US Dollar High Yield Bond 5.3% -0.7% 8.0% 2.2%

BlackRock US Corporate Bond Index 6.0% 1.0% 5.3% 6.7%

iShares USD Treasury Bond 1-3 2.0% 0.1% 0.1% 0.7%


Fixed Income 34.7%

Cohen & Steers Global Real Estate 9.8% -4.4% 6.4% -11.2%

Property 9.8%


Harmony US Dollar Growth asset allocation

May 2012

Equity49.0%

Equity35.0%

Equity51.0%

Equity53.3% Equity

47.5%

Equity65.3%

Equity68.7% Equity

64.6%Equity65.0%

Fixed Income15.0%

Fixed Income28.0%

Fixed Income27.0%

Fixed Income25.2%

Fixed Income13.0%

Fixed Income17.4%


20.6%Fixed Income

20.0%

Alt. Investments25.0% Alt. Investments

24.0%




Property9.0%

Property4.0%

Property13.0%

Property9.9%

Property5.9%

Property10.3%

Property9.9%

Property9.7%

Property10.0%

Cash2.0%

Cash9.0%

Cash2.0% Cash

4.4%

Cash30.4%

Cash7.0%

Cash4.5%

Cash5.1%

Cash5.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Growth currency allocation

May 2012

USD80.0%

USD88.0%

USD69.0% USD

64.2%

USD76.2%

USD68.6%

USD72.0%

USD81.7% USD

76.8%

EUR 10.0%

EUR 1.0%

EUR 9.0%

EUR 10.6%

EUR 7.1%

EUR 9.6%

EUR 9.3%

EUR 5.6%

EUR 8.9%

GBP 2.0%GBP 7.0%

GBP 5.0%GBP 6.5%

GBP 4.4%

GBP 4.8%

GBP 4.7%

GBP 2.6% GBP 4.4%

JPY 4.0%

JPY 5.0%JPY 5.1%

JPY 3.2%

JPY 3.4%

JPY 3.3%

JPY 1.9%JPY 4.6%

Other 4.0% Other 4.0%

Other 12.0% Other 13.7%Other 9.1%



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%



Harmony US Dollar Growth

0%

20%

40%

60%

80%

100%

3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Har

mo

ny

fun

d p

erce

ntag

e ra

nk

3 months YTD 2011 2010 2009 2008 2007 2006 2005*

Harmony US Dollar Growth Peer Rank 10/18 6/18 3/18 6/16 3/15 10/12 3/11 1/11 4/11

Fund Performance -4.5% 1.9% -0.1% 7.8% 23.0% -30.1% 6.5% 15.2% 6.3%

Peer Max 0.7% 5.0% 1.6% 12.2% 25.2% -6.7% 7.8% 15.2% 14.2%

Peer Min -10.9% -7.0% -18.8% -2.6% -0.7% -36.2% 2.1% 5.0% 0.8%

Peer Median -4.2% 1.6% -3.9% 6.0% 16.1% -23.4% 5.4% 9.2% 3.4%

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


Harmony US Dollar Growth manager performance

May 2012.

Performance in USD Weight 3 months 6 months 12 months

Artisan Global Value 5.5% -4.9% 2.6% -4.1%

Momentum IF Global Equity 6.1% -9.6% -0.4% -12.9%

Morgan Stanley Global Brands 3.3% -5.6% 4.0% -2.2%

BlackRock US Index 13.7% -3.6% 6.1% -0.8%

Yacktman US Equity 12.9% -3.0% 3.4% -1.5%

Hotchkis & Wiley US Value 9.2% -7.6% 10.2% -5.9%

Wells Fargo US All Cap Growth 12.3% -4.5% 7.1% 3.9%

Momentum IF Global Emerging Markets 1.7% -18.2% -9.0% -27.8%

Equity 64.6%

Old Mutual Dublin Global Bond 6.3% 0.1% 2.1% 5.1%

RWC Global Convertibles 4.8% -4.3% 2.7% -5.1%

BlackRock US Dollar High Yield Bond 3.2% -0.7% 8.0% 2.2%

BlackRock US Corporate Bond Index 3.2% 1.0% 5.3% 6.7%



Fixed Income 20.6%

Cohen & Steers Global Real Estate 9.7% -4.4% 6.4% -11.2%

Property 9.7%


Harmony performance vs. cash, bonds and equities

Source: Bloomberg, May 2012. Past performance is not indicative of future returns..

50.00

100.00

150.00

200.00

250.00

300.00

Reb

ased

to

100

(O

cto

ber

199

7)

US Bonds

US Cash

US Equities

Growth

Balanced


Disclaimer

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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

Documents

1 global investment management Market update & Harmony funds review Glyn Owen June 2012