harmony portfolios advisor workshop november 2009

Harmony Portfolios

Advisor Workshop

November 2009

2

Agenda

• RMBAM Overview

• Harmony overview

• Performance

• Developments

• Investment process

3

RMB Asset Management International

• RMB Asset Management is a wholly owned subsidiary of South Africa's largest

financial services group, FirstRand

• FirstRand has USD124 billion of assets under management (June 2008) with a

market capitalisation of USD9.7 billion (December 2008)

• RMB Asset Management has USD2.1 billion assets under management as of

31 December 2008.

• From its office in London, RMB Asset Management employs over 35 staff:- Equity Desk – Long only manager of manager funds- Fixed Income desk- Alternative Desk- Multi Asset Desk - Bespoke multi asset class portfolios- Advisory services for professional clients

Source: RMB Asset Management, February 2009.

4

RMB Asset Management International

Well resourced, experienced investment team

Genuine diversification to a broad range of ‘traditional’ and ‘non-traditional’

asset classes– reducing risk and widening the opportunity set

Consistent valued ad through all market conditions

Cost-effective portfolio management

Global best of breed: It is widely accepted that no one manager is the best in all

asset classes. Our analysts carry out over 1000 research meetings a year to

uncover the world’s best managers

Disciplined and repeatable process

5

The manager selection process

Focus on alpha generation

Intelligent use of qualitative and quantitative research

Maximising efficiency through technology

Asset classresearch

Portfolio construction

Portfoliomonitoring

Manager research

analysis of universe

blend managers

quantitative analysis

asset class research

fundamental research

asset allocation

style analysis

attribution / trading analysis

6

Where active management works

Percentage of fund managers who underperform various performance hurdles

Source: PSN, Lipper Hindsight, RMB MultiManagers, * Average of US, UK and Eurozone

Asset class research

Inef

fici

ent

Index +1% +2% +4%

Eff

icie

nt Domestic Bonds* 84

Global Bonds

EM Equity

Japanese Equity

Sem

i-E

ffic

ien

t

UK Equities

US Equities

Global Equities

European Equities

Small Cap*

66 77

67 77

65 71 75

69 75 81

53 66 75

59 67 73

48 57 65 75

49 54 59 67

Efficient

Inefficient

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Manager research and selection

Assets under management Investment style High alpha

Returns based style analysis Risk/attribution analysis

Check consistency through time

Philosophy Process People EvidenceRe-evaluation of

existing managers

Ongoing monitoring

Asset class screening / initial research

Quant analysis

Due diligence

Selection

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Philosophy

Process

People

Evidence

Focus on skilful exponents of investment styles

Disciplined and repeatable process

Is the philosophy implemented consistently?

Skilful individuals leveraging the resources of a wider team rather than consensus based approaches

Through risk and return attributions, confirm risks being taken are consistent with the stated philosophy

Best of breed

9

RMB Global Equity Fund: incumbent managers

Tokyo:JP MorganShiozumi

London:JupiterNew StarCazenove

New York:American CenturyASBPzenaEvercore

Chicago:DriehausTimpani

Paris:Comgest

Wilmington:Marvin & Palmer

Connecticut:Lapides

Data: as at 17.10.2008

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Introduction to Harmony


The range of Harmony Funds has been designed to provide a core investment solution to your clients.

The investment objective is achieved through a diversified portfolio that invests across a broad range of asset classes and currencies in varying proportions over time. These asset classes include international equities, fixed income, commodities, alternative strategies, property, money market instruments and asset allocation portfolios.

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Harmony Portfolios Funds - Incorporated cells of RMBIS Mutual Fund ICCStructure

RegulatorGuernsey FinancialServices Commission

Fund Manager

RMB Investment Services Limited

Harmony PortfoliosFund Range

Asian Balanced FundAsian Growth FundEuro Balanced FundGBP Balanced FundGBP Growth FundUSD Balanced FundUSD Growth FundAUD Growth Fund

Designated ManagerRMB Investment Services Limited

Investment ManagerRMB Asset Management International Limited (London)

Distribution PartnerFinancial Partners

CustodianClose International Custody Services

AuditorsPrice Waterhouse Coopers

Harmony structure

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Harmony fund detail

The funds are available in USD, EUR and GBP

Daily dealing

Initial Fee - 0.00%

Minimum Investment - US$25,000 (or currency equivalent)

Minimum Subsequent Investment - US$7,500 (or currency equivalent)

Minimum Redemption - not less than US$2,500 (or currency equivalent)

Dividend Policy - no dividends will be paid. All income received will be

reinvested


13

Harmony Class A and B fees

Fee description Class A Class B

Management fee - RMBIS 0.40% 0.90% (rebate to life companies)

Investment Management fee – RMB Asset Management International

0.25% 0.25%

Distribution Partner fee - FP 0.50% 0.50%

Underlying Asset Manager’s fee 1.00% (variable) 1.00% (variable)

ICC fees 0.05% (variable) 0.05% (variable)

Total (2) 2.20% 2.70%

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Harmony accessibility

Friends Provident International– Lumps Sums– Regular savings products – Mirror funds– Menu products?

Skandia– Lumps Sums

Zurich, Scottish Provident, Generali– In progress

Trail fees on all

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Friends Provident International - Regular Savings

Portfolio Management for regular savings clients

Harmony Class B funds will be offered as mirror funds on Friends Provident

regular savings product

Funds will be available for new investments and switches

Sign the Friends Provident OMA form which will enable you to do the fund

selections and portfolio changes – earn additional 0.5%

Normal applications forms for new business

Normal dealing instruction for switches

www.harmonyportfolios.com

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Harmony Performance

USD Sep-09 3 Months 6 Months YTD 12 Months 24 months 36 monthsHarmony Portfolios US Dollar Growth Fund 2.6% 11.8% 22.1% 19.1% -3.3% -17.9% -5.2%Benchmark 1.9% 8.7% 18.5% 12.1% -1.7% -14.7% -3.5%Relative 0.8% 3.1% 3.6% 6.9% -1.6% -3.2% -1.7%* 45% Equity (30% S&P 500, 15% MSCI World ex USA), 15% Citigroup US WGBI, 5% JPM EMBI+, 15% Lipper Property Peer Group & 20% US Dollar 7-Day LIBID** Inception date 30 June 2005 AuM: 12 549 441

Harmony Portfolios US Dollar Balanced Fund 2.8% 10.0% 20.4% 17.4% -2.2% -15.0% -3.8%Benchmark 1.8% 6.5% 13.2% 9.2% 1.3% -6.2% 3.7%Relative 1.0% 3.6% 7.2% 8.2% -3.4% -8.7% -7.5%* 26% Equity (16% S&P 500, 10% MSCI World ex USA), 25% Citigroup US WGBI, 12% JPM EMBI+, 13% Lipper Property Peer Group & 24% US Dollar 7-Day LIBID** Inception date 30 June 2005 AuM: 6 424 231

GBP Sep-09 3 Months 6 Months YTD 12 Months 24 Months 36 MonthsHarmony Portfolios Sterling Growth Fund 3.9% 14.0% 20.9% 14.8% 9.1% -1.6% 6.5%Benchmark 3.0% 11.7% 15.7% 7.9% 6.3% -2.5% 4.4%Relative 0.9% 2.3% 5.2% 6.9% 2.8% 0.9% 2.0%* 45% Equity (% FTSE All Share, % MSCI World ex UK), 15% Citigroup GBP WGBI, 5% JPM EMBI+, 15% Lipper Property Peer Group & 20% GBP 7-Day LIBID** Inception date 30th June 2004 AuM: 4 568 899

Harmony Portfolios Sterling Balanced Fund 3.3% 11.8% 16.6% 11.4% 6.1% -1.3% 4.6%Benchmark 2.6% 8.8% 10.5% 4.7% 7.2% 4.6% 9.7%Relative 0.7% 3.0% 6.1% 6.7% -1.1% -5.9% -5.2%* 26% Equity (% FTSE All Share, % MSCI World ex UK), 25% Citigroup GBP WGBI, 12% JPM EMBI+, 13% Lipper Property Peer Group & 24% GBP 7-Day LIBID** Inception date 30th June 2004 AuM: 7 807 746

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Harmony Performance

EUR Sep-09 3 Months 6 Months YTD 12 Months 24 Months 36 MonthsHarmony Portfolios Euro Balanced Fund 1.8% 8.9% 18.7% 14.5% -0.9% -13.6% -6.1%Benchmark 1.1% 7.3% 15.4% 11.9% 0.7% -11.4% -6.7%Relative 0.7% 1.6% 3.3% 2.6% -1.6% -2.1% 0.6%* 26% Equity (16% MSCI Europe ex UK, 10% MSCI World ex EMU), 25% Citigroup EUR WGBI, 12% JPM EMBI+, 13% Lipper Property Peer Group, 24% EUR 7-Day LIBID** Inception date 30th June 2004 AuM: 6 222 032

USD Sep-09 3 Months 6 Months YTD 12 Months 24 MonthsHarmony Asian Growth Portfolio* 2.9% 10.0% 25.2% 23.0% 1.7% -11.3%Benchmark 2.9% 8.6% 21.3% 20.1% 10.9% -4.7%Relative 0.0% 1.3% 3.9% 2.9% -9.2% -6.6%* 45% Equity (30% MSCI AC Asia ex Japan, 15% MSCI World ), 20% Citigroup US WGBI, 35% US Dollar 7-Day LIBID** Inception date 30 November 2007 AuM: 24 268 373

Harmony Asian Balanced Portfolio* 2.5% 8.0% 17.9% 14.9% -0.9% -13.0%Benchmark 1.9% 5.5% 11.7% 10.3% 8.0% 2.1%Relative 0.6% 2.6% 6.2% 4.6% -8.9% -15.1%* 26% Equity (16% MSCI AC Asia ex Japan, 10% MSCI World ), 37% Citigroup US WGBI, 37% US Dollar 7-Day LIBID** Inception date 30 November 2007 AuM: 9 364 755

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Developments

• Mirror funds on Friends

• Bloomberg

• Harmony AUD Growth Fund– launch December 2009

• Benchmark review– 10% Property in Asian portfolios– Slightly more aggressive

• Weekly market commentary

• House view after Asset Allocation meetings

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Benchmark review - Current

Harmony Asian Balanced

Harmony Asian Growth

Harmony Euro Balanced

Harmony Sterling Balanced

Harmony Sterling Growth

Harmony USD Balanced

Harmony USD Growth

Global Equity 10% 15% 10% 10% 15% 10% 15%

Local Equity 16% 30% 16% 16% 30% 16% 30%

26% 45% 26% 26% 45% 26% 45%

Emerging Market Debt

0% 0% 12% 12% 5% 12% 5%

Government Debt

37% 20% 25% 25% 15% 25% 15%

37% 20% 37% 37% 20% 37% 20%

Global Property

0% 0% 13% 13% 15% 13% 15%

Cash 37% 35% 24% 24% 20% 24% 20%

100% 100% 100% 100% 100% 100% 100%

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Benchmark review – New composition

Harmony Asian Balanced

Harmony Asian Growth

Harmony Euro Balanced

Harmony Sterling Balanced


Harmony USD Balanced

Harmony USD Growth

Global Equity 12% 18% 12% 12% 18% 12% 18%

Local Equity 18% 32% 18% 18% 32% 18% 32%

30% 50% 30% 30% 50% 30% 50%

Emerging Market Debt

10% 5% 10% 10% 5% 10% 5%

Government Debt

35% 25% 35% 35% 25% 30% 25%

45% 30% 45% 45% 30% 45% 30%

Global Property

10% 10% 10% 10% 10% 10% 10%

Cash 15% 10% 15% 15% 10% 15% 10%

100% 100% 100% 100% 100% 100% 100%

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Developments


• Bloomberg





23

Developments


• Bloomberg





24

House view

25

Investment Process

• Implementation in action

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Recent Portfolio changes

Harmony Asian

BalancedOct

Changes

Harmony Asian

GrowthOct

Changes

Harmony Euro

BalancedOct

ChangesTotal allocationGlobal equity 7.3% 8.4% 12.3% 14.2% 7.3% 8.4%Local equity 15.6% 18.6% 26.1% 30.8% 15.6% 18.6%Global Emerging market equity 2.0% 3.0% 3.0% 4.0% 2.0% 3.0%Equities 25.0% 30.0% 41.3% 49.0% 25.0% 30.0%

High yield bonds 3.7% 3.9% 4.8% 2.2% 7.6% 3.8%Global convertible bonds 3.7% 3.9% 4.8% 2.2% 5.2% 3.8%Senior loans 3.2% 0.0% 1.5% 0.0% 2.5% 0.0%Investment grade corporate debt 16.5% 8.3% 9.6% 6.2% 11.6% 5.3%Emerging market debt 3.2% 5.3% 1.5% 3.6% 9.7% 14.5%Government bonds 24.3% 24.8% 15.6% 14.2% 19.2% 17.8%Bonds 54.5% 46.2% 37.9% 28.4% 55.7% 45.2%

Alternatives 7.9% 9.0% 10.2% 8.6% 5.9% 8.8%

Property 1.8% 4.8% 1.8% 4.8% 7.8% 10.4%

Cash 10.8% 10.0% 8.8% 9.2% 5.6% 5.6%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

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Harmony Sterling

BalancedOct

Changes


Oct Changes

Harmony US Dollar Balanced

Oct Changes

Harmony US Dollar Growth

Oct Changes

Total allocationGlobal equity 7.3% 8.4% 12.3% 14.2% 7.3% 8.4% 12.3% 14.2%Local equity 15.6% 18.6% 26.1% 30.8% 15.6% 18.6% 26.1% 30.8%Global Emerging market equity 2.0% 3.0% 3.0% 4.0% 2.0% 3.0% 3.0% 4.0%Equities 25.0% 30.0% 41.3% 49.0% 25.0% 30.0% 41.3% 49.0%

High yield bonds 7.6% 3.8% 7.6% 3.0% 7.3% 3.8% 7.6% 3.0%Global convertible bonds 5.2% 3.8% 7.0% 3.0% 5.1% 3.8% 7.0% 3.0%Senior loans 2.3% 0.0% 1.0% 0.0% 2.2% 0.0% 1.0% 0.0%Investment grade corporate debt 12.4% 5.3% 6.0% 3.5% 11.6% 5.3% 5.4% 3.5%Emerging market debt 9.5% 14.5% 2.8% 6.5% 8.8% 14.5% 2.8% 6.5%Government bonds 19.2% 17.8% 11.4% 11.0% 19.2% 17.8% 10.8% 11.0%Bonds 56.1% 45.2% 35.9% 27.0% 54.1% 45.2% 34.7% 27.0%

Alternatives 3.9% 8.8% 8.2% 8.0% 5.9% 8.8% 10.2% 8.0%

Property 7.8% 10.4% 9.0% 12.0% 7.8% 10.4% 9.0% 12.0%

Cash 7.2% 5.6% 5.6% 4.0% 7.2% 5.6% 4.8% 4.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Recent Portfolio changes

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Rolling Asset Allocation – Harmony GBP Balanced

Equity, 37%

Equity, 26%

Equity, 17%Equity, 23% Equity, 25% Equity, 26%

Fixed Income, 20%

Fixed Income, 31%Fixed Income, 44%

Fixed Income, 44%

Fixed Income, 55%

Fixed Income, 37%

Alternatives, 16% Alternatives, 16%


Property, 15%Property, 11% Property, 5% Property, 13%

Property, 9%

Property, 13%

Money Market, 7%

Money Market, 16% Money Market, 18%Money Market, 14%

Money Market, 10%

Money Market, 24%

Alternatives, 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-07 Jun-08 Dec-08 Jun-09 Sep-09 Benchmark

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Rolling Asset Allocation – Harmony Asian Growth

Equity, 49%Equity, 45%

Equity, 31%

Equity, 45%Equity, 41%

Equity, 45%


Fixed Income, 37%


Fixed Income, 20%

Alternatives, 29%


Alternatives, 10%Property, 12% Property, 8%

Property, 5%

Property, 1%Money Market, 8%

Money Market, 17%

Money Market, 7%Money Market, 11%

Money Market, 35%Alternatives, 10%

Property, 0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-07 Jun-08 Dec-08 Jun-09 Sep-09 Benchmark

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Why Harmony

• Portfolio management solution– Illustrated on fact sheets – drill down to underlying funds– Actively managed– Access to the fund managers in London– Bespoke to Financial Partners

• Monthly fact sheets, Viewpoint newsletter, Weekly Market Commentary,

Monthly House View and Comprehensive quarterly report

• Daily trading

• Prices on Bloomberg

• Accepted on most life company platforms

• Trail fees on lump sums and regulars

• Disciplined and repeatable process

Thank You

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Important NotesRMB Asset Management is the trading name for RMB Asset Management International 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 provided under UK law, RMB Asset 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.

Important notes

33

Important Notes (Continued)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). RMB Asset Management International Limited (Company Registration No. 3733094) is a member of the FirstRand Group, and has its registered office at Two London Bridge, London SE1 9RA. RMB Asset Management International 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. © RMB Asset Management International Limited 2008

Important notes (continued)

harmony portfolios advisor workshop november 2009

Documents

rmb asset management

nontraditional asset

active management

repeatable process slide

research meetings

efficient inefficient

rmb global equity fund

rmb multimanagers