introduction to investments october 2012.pdf · the values of the individual investments within the...

25
premium investment solution portfolio guide and research October 2012 ortfolios o us ortfolios p o us

Upload: others

Post on 04-Aug-2020

0 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

premium investment solution

portfolio guide and research October 2012

ortfolios o us

ortfolios p o us

Page 2: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

1

TARG

ETIN

G V

OLA

TILITY

Our OPUS Portfolios combine different asset classes, with the aim of maximising the expected returns for a given level of risk. This is achieved by adopting the principles of Modern Portfolio Theory. The theory states that the risk of a portfolio should be considered as a whole, rather than in terms of its individual assets. The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each other, the peaks and troughs may cancel each other out. The asset allocation for each OPUS Portfolio is calculated using a complex mathematical formula known as Mean Variance Optimisation, an integral part of Modern Portfolio Theory. This process uses expected rates of return and implied volatility for each asset class to compile a portfolio. Towers Watson’s current long-term return and volatility assumptions relating to the different asset classes being used within our OPUS Portfolios are as follows: ASSET RETURN VOLATILITY

Cash 1.92% 1.34%

UK Fixed Interest 3.30% 7.02%

International Fixed Interest 2.79% 8.93%

Property 6.62% 10.16%

UK Equities 6.71% 20.65%

International Equities 7.70% 19.87%

EXPECTED RETURNS From these return assumptions, it is possible to calculate the implied volatility of each OPUS Portfolio to two standard deviations. This means that, based on Towers Watson’s current expected rates of long term returns and volatility assumptions, all returns are expected to be between these extremes in 95 years out of 100. This is often described as a 95% confidence level; however these figures should not be taken as a projection of the likely returns from OPUS Portfolios.

-31.33%-27.88%

-24.77%-21.62%

-18.53%-15.43%-12.45%

-9.44%-5.27%

-1.28%

46.67%42.96%

38.95%34.94%

30.91%26.85%

22.71%18.56%

6.72%12.73%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5 6 7 8 9 10

Risk Score

Maximum expected annual LOSS Maximum expected annual GAIN

Figures are shown gross, i.e. before tax and charges. It is important that you check the ‘risk score’ of your current portfolio(s) and let us know if you are no longer comfortable with the expected returns of your portfolio(s), particularly the maximum expected loss.

Page 3: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

2

TOW

ERS

WA

TSO

N R

EVIE

W –

Sep

tem

ber 2

012 As the objective of OPUS Portfolios is that the asset allocations aim to

achieve the highest expected return for each risk level, it is vital that the portfolios continue to remain in line with a changing market. Together with advice from Towers Watson, we review the OPUS Portfolio asset allocations on a quarterly basis, to ensure that they continue to meet the level of risk they are designed to achieve and that they reflect the current economic outlook. This quarter, Towers Watson has made changes to the economic assumptions, with the more significant changes applying to cash and fixed interest. Towers Watson’s comments regarding the major asset classes are as follows: INFLATION, INTEREST RATES AND FIXED INTEREST A general fall in bond yields has resulted in, as you would expect, a reduction in the expected return assumptions for both UK and International Fixed Interest. The changes in the Fixed Interest assumptions have seen a very small allocation to International Fixed Interest in certain ISA portfolios, something not seen for a number of years. International Fixed Interest’s volatility has decreased slightly whilst its return assumption has not fallen by as much as for UK Fixed Interest (which has also seen a slight increase in volatility). This means that although still unattractive in the wider scheme of things, the 10 year return volatility assumption for International Fixed Interest is slightly more attractive this quarter – particularly with its diversification benefit. Although the longer term return assumption for Cash has also fallen, the relative nature of these falls to other asset classes, plus revised annual cost assumptions, sees a slight increase in Cash, at the expense of Fixed Interest at the lower risk levels, this quarter. COMMERCIAL PROPERTY There have been no material changes or comments with regards to Commercial Property, although it is worth noting that Towers Watson continues to recommend a 15% ‘cap’ for property exposure given the relative illiquidity of the asset class.

EQUITIES Equity assumptions remain relatively unchanged as do the resulting asset allocations. RISK AND CORRELATION There have been no specific comments on risk and correlation this quarter. SUMMARY Given the above changes to economic assumptions, return assumptions and volatility, there have been a number of changes to asset allocations for the current quarter.

Page 4: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

3

ASS

ET A

LLO

CA

TION

S –

Oct

ober

201

2

In light of Towers Watson’s quarterly review, the asset allocation models incorporated into our OPUS Portfolios will now be as follows: GROWTH PORTFOLIOS

INDIVIDUAL SAVINGS ACCOUNTS

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 - - - - - - 2 - - - - - - 3 0% 68% 1% 15% 0% 16% 4 0% 53% 0% 15% 0% 32% 5 0% 40% 0% 15% 0% 45% 6 0% 31% 0% 15% 0% 54% 7 0% 20% 0% 15% 1% 64% 8 0% 9% 0% 15% 1% 75% 9 0% 0% 0% 15% 0% 85%

10 0% 0% 0% 3% 0% 97% NB. Portfolios at risk scores 1 and 2 are not available for ISA investments as this would suggest using a Cash ISA rather than a Stocks & Shares ISA.

PENSIONS

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 73% 12% 0% 14% 0% 1% 2 47% 24% 0% 15% 0% 14% 3 24% 35% 0% 15% 0% 26% 4 8% 43% 0% 15% 0% 34% 5 0% 40% 0% 15% 0% 45% 6 0% 31% 0% 15% 0% 54% 7 0% 20% 0% 15% 1% 64% 8 0% 9% 0% 15% 1% 75% 9 0% 0% 0% 15% 0% 85%

10 0% 0% 0% 3% 0% 97%

COLLECTIVES

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 76% 10% 0% 14% 0% 0% 2 53% 17% 0% 15% 0% 15% 3 33% 24% 0% 15% 1% 27% 4 20% 28% 0% 15% 2% 35% 5 7% 32% 0% 15% 2% 44% 6 0% 30% 0% 15% 3% 52% 7 0% 19% 0% 15% 4% 62% 8 0% 9% 0% 15% 5% 71% 9 0% 0% 0% 15% 0% 85%

10 0% 0% 0% 3% 0% 97%

Page 5: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

4

ASS

ET A

LLO

CA

TION

S –

Oct

ober

201

2 INVESTMENT BONDS

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 76% 10% 0% 14% 0% 0% 2 52% 18% 0% 15% 0% 15% 3 32% 24% 0% 15% 2% 27% 4 19% 29% 0% 15% 3% 34% 5 6% 34% 0% 15% 4% 41% 6 0% 29% 0% 15% 5% 51% 7 0% 18% 0% 15% 7% 60% 8 0% 8% 0% 15% 8% 69% 9 0% 0% 0% 15% 0% 85%

10 0% 0% 0% 3% 0% 97% The asset allocations differ slightly between each ‘tax wrapper’ due to the differences in taxation rates applicable to the various asset classes. The volatility targets for each risk level remain constant, between each tax wrapper, and therefore take account of the differences in taxation liabilities.

Page 6: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

5

INCOME PORTFOLIOS

INDIVIDUAL SAVINGS ACCOUNTS – ESTIMATED YIELDS Risk Score As at 5th October 2012*

3 4.26% 4 4.27% 5 4.27% 6 4.28% 7 4.28%

NB. Again, there are no risk scores 1 and 2 for ISA investments as this would suggest using a Cash ISA rather than a Stocks & Shares ISA.

COLLECTIVES – ESTIMATED YIELDS Risk Score As at 5th October 2012*

1 1.24% 2 2.11% 3 3.64% 4 3.82% 5 3.90% 6 3.99% 7 4.08%

* Yields are estimated, net of tax for a basic rate tax-payer, and not guaranteed. We do not run income portfolios above risk score 7, as we feel the volatility would be too great for those clients seeking an immediate income.

ASS

ET A

LLO

CA

TION

S –

Oct

ober

201

2 INDIVIDUAL SAVINGS ACCOUNTS

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 - - - - - - 2 - - - - - - 3 0% 71% 0% 15% 14% 0% 4 0% 55% 0% 15% 30% 0% 5 0% 43% 0% 15% 42% 0% 6 0% 33% 0% 15% 52% 0% 7 0% 23% 0% 15% 62% 0% 8 - - - - - - 9 - - - - - -

10 - - - - - -

COLLECTIVES

Risk Score C

ash

/Mon

ey

Mar

ket

UK F

ixed

In

tere

st

Inte

rnat

iona

l Fi

xed

Inte

rest

Prop

erty

UK E

quiti

es

Inte

rnat

iona

l Eq

uitie

s

1 73% 11% 0% 15% 1% 0% 2 49% 22% 0% 15% 14% 0% 3 0% 71% 0% 15% 14% 0% 4 0% 53% 2% 15% 30% 0% 5 0% 43% 0% 15% 42% 0% 6 0% 33% 0% 15% 52% 0% 7 0% 23% 0% 15% 62% 0% 8 - - - - - - 9 - - - - - -

10 - - - - - -

Page 7: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

6

UK FIXED INTEREST (ALL PORTFOLIOS) The minutes from the Monetary Policy Committee meetings over the last quarter show unanimous voting with regard to interest rate policy with all nine members having voted for no change to bank base rate, i.e. maintaining base rate at 0.5%, in July, August and September. We also know that base rate was maintained at 0.5% during October’s meeting, although the minutes have not yet been published. As we reported last quarter, in July the Committee carried a vote to increase quantitative easing QE by a further £50billion, i.e. to a new total of £375billion, albeit we did not know the actual votes for and against. We now know that the Committee voted 7 to 2 in favour of this increase, with two members having voted to maintain the previous level of QE. In August and September, the Committee voted unanimously to maintain QE at the new level of £375billion and again there was no change during October’s meeting. We feel that the above indicates the continued likelihood that base rate will remain unchanged for considerably longer than many people expected, something we have been suggesting for some time. Taking the above into account, we are not proposing any changes to the current tactical asset allocation within the fixed interest sector, which will therefore remain as follows: Asset / Sector

Gilts 15%

Index Linked Gilts 7½%

Corporate Bonds 45%

Strategic Corporate Bonds 25%

High Yield Corporate Bonds 7½%

PROPERTY (ALL PORTFOLIOS) We continue to favour funds investing in ‘bricks and mortar’, i.e. physical property, over those funds which invest in the shares of property companies. These latter funds we consider to be specialist equity funds which do not, therefore, suit our diversification process. UK EQUITIES (GROWTH PORTFOLIOS) We are not proposing any changes to the current diversification across UK Equities, being approximately: Asset / Sector

UK All Companies 70%

UK Equity Income 20%

UK Smaller Companies 10%

INTERNATIONAL EQUITIES (GROWTH PORTFOLIOS) We are not proposing any changes to the asset allocations, within the International Equity sector, which remain, approximately, as follows: Asset / Sector Europe (excluding UK) 40%

North America 20%

Japan 10%

Far East (excluding Japan) 15%

Global Growth/Specialist 15%

TAC

TICA

L A

LLO

CA

TION

S –

Oct

ober

201

2

Page 8: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

7

FUN

D RE

SEA

RCH

– O

ctob

er 2

012

Each quarter, we carry out a full review of the UK based fund universe, in order to ensure that the funds being utilised within our portfolios remain appropriate and warrant continued inclusion in our OPUS Portfolios. This quarter’s review covered 2,822 funds and we continue to include our analysis of all sectors and not just the sectors in which we currently recommend funds. This will enable you to review any other holdings you may have in order to see whether these pass our research criteria. Basically, if any fund you hold is not listed here, it does not currently pass our research criteria and you should contact us to discuss this. The funds which pass our research criteria, following this quarter’s research, for each asset class are as follows, with the funds in bold being the funds we currently recommend: CASH/MONEY MARKET

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

SHO

RT TE

RM

MO

NEY

MA

RKET

BlackRock Cash 5.55 Yes 0.14 No

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

SHO

RT TE

RM

MO

NEY

MA

RKET

Premier UK Money Market 3.75 Yes 1.07 No We are therefore continuing to recommend the BlackRock Cash and Premier UK Money Market funds which continue to meet our selection criteria. It should be noted that Citywire, OBSR and Standard & Poor’s do not provide ratings for this sector.

UK FIXED INTEREST

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

GIL

TS

Allianz Gilt Yield 4.65 Yes 0.57 Yes We continue to recommend the Allianz PIMCO Gilt Yield fund as it continues to meet our selection criteria, being one of very few Gilt funds with an independent rating.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Insight UK Index Linked Bond 4.05 Yes 0.63 No INDE

X-LIN

KED

GIL

TS

L&G All Stocks Index Linked Gilt Index 5.25 Yes -0.05 No

We continue to recommend the L&G All Stocks Index Linked Gilt Index fund for inclusion in our portfolios due to its combination of consistent relative performance and low charges.

Page 9: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

8

FUN

D RE

SEA

RCH

– O

ctob

er 2

012 C

onsis

tenc

y Sc

ore

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

M&G Strategic Corporate Bond 4.30 Yes 1.62 Yes

M&G Corporate Bond 4.75 Yes 1.13 Yes

Invesco Perpetual Corporate Bond 4.90 Yes 0.28 Yes STER

LIN

G C

ORP

ORA

TE B

ON

DS

Fidelity MoneyBuilder Income 5.40 Yes 0.93 Yes The three funds recommended in this sector have specifically been chosen due to their different approach to investment and, as such, we would not expect them to perform in a similar manner. This quarter, Invesco Perpetual and Fidelity have very marginally failed individual aspects of our research criteria. However, when combined with the M&G fund, the combination of funds continues to offer what we feel is excellent potential within the sector.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

M&G Optimal Income 4.55 Yes 1.20 Yes

Fidelity Extra Income Distribution 4.90 Yes 0.42 Yes

Fidelity Strategic Bond 4.90 Yes 0.84 Yes

L&G Dynamic Bond 4.90 Yes 0.87 Yes STRA

TEG

IC C

ORP

ORA

TE B

ON

DS

Invesco Perpetual Monthly Income Plus 5.05 Yes 0.12 Yes

We continue to recommend the Invesco Perpetual Monthly Income Plus fund due to its slight exposure to UK equities.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

HIG

H YI

ELD

CO

RPO

RATE

BO

NDS

Kames High Yield Bond 4.40 Yes 0.60 Yes We continue to recommend the Kames High Yield Bond fund as it continues to meet our selection criteria. INTERNATIONAL FIXED INTEREST

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

GLO

BAL

BON

DS

Investec Emerging Markets Local Currency Debt 4.20 Yes 0.62 Yes

We have introduced the Investec fund for those portfolios which now have an allocation to International Fixed Interest. PROPERTY

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Ignis UK Property 5.10 Yes 0.28 No M&G Property Portfolio 6.10 Yes 0.04 No

PRO

PERT

Y

Threadneedle UK Property 6.50 Yes -0.63 No We continue to recommend the property funds of Threadneedle, Ignis and M&G for the geographical diversification they offer.

Page 10: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

9

FUN

D RE

SEA

RCH

– O

ctob

er 2

012

UK EQUITIES

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Liontrust Special Situations 3.10 Yes 1.52 Yes

Franklin UK Mid Cap 3.65 Yes 1.23 Yes

F&C UK Mid Cap 3.90 Yes 0.84 Yes

Royal London UK Mid-Cap Growth 3.90 Yes 1.32 Yes

Cazenove UK Opportunities 4.00 Yes 1.57 Yes AXA Framlington UK Select Opportunities 4.10 Yes 1.39 Yes

BlackRock UK Special Situations 4.20 Yes 0.76 Yes

MFM Slater Growth 4.20 Yes 0.89 Yes

SVM UK Growth 4.45 Yes 0.76 Yes

Old Mutual UK Select Mid Cap 4.50 Yes 0.64 Yes

HSBC FTSE 250 Index Retail 4.60 Yes 0.40 Yes

Aviva UK Equity 4.70 Yes 0.84 Yes

Jupiter UK Special Situations 4.75 Yes 0.76 Yes

L&G UK Alpha 4.80 Yes 0.43 Yes

Standard Life UK Equity Unconstrained 4.80 Yes 0.48 Yes

JOHCM UK Opportunities 4.85 Yes 0.58 Yes

Royal London UK Opportunities 4.90 Yes 0.59 Yes

M&G Recovery 4.95 Yes 0.59 Yes

Investec UK Special Situations 5.05 Yes 0.68 Yes

UK A

LL C

OM

PAN

IES

Fidelity UK Select 5.10 Yes 0.41 Yes As the Schroder UK Alpha Plus fund has again failed our selection criteria, we have replaced it with the Cazenove UK Opportunities fund which we now recommend alongside the Liontrust Special Situations, Franklin UK Mid Cap and M&G Recovery funds.

As ever, this clearly illustrates the benefits of diversification between different funds within each sector.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

UK E

QUI

TY &

BO

ND

Ecclesiastical Higher Income 3.95 Yes 1.34 No We continue to recommend the Ecclesiastical Higher Income fund as it continues to meet our selection criteria.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Threadneedle UK Equity Income 4.35 Yes 0.95 Yes

JOHCM UK Equity Income 4.40 Yes 0.87 Yes

Royal London UK Equity Income 4.55 Yes 0.91 Yes

UK E

QUI

TY IN

CO

ME

Threadneedle UK Equity Alpha Income 4.60 Yes 0.48 Yes

As the Invesco Perpetual High Income and Neptune Income funds have again failed our selection criteria this quarter, we have replaced them with the JOHCM UK Equity Income and Royal London UK Equity Income funds which we now recommend alongside the Threadneedle UK Equity Income fund. Again, as ever, this illustrates the benefits of diversification within each sector.

Page 11: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

10

FUN

D RE

SEA

RCH

– O

ctob

er 2

012 C

onsis

tenc

y Sc

ore

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Cazenove UK Smaller Co’s 4.20 Yes 0.76 Yes

Investec UK Smaller Co’s 4.30 Yes 1.33 Yes

Standard Life UK Smaller Co’s 4.30 Yes 0.64 Yes

Liontrust UK Smaller Co’s 4.55 Yes 0.53 Yes

UK S

MA

LLER

CO

MPA

NIE

S

Old Mutual UK Select Smaller Co’s 4.90 Yes 0.45 Yes We continue to recommend the Old Mutual UK Select Smaller Companies fund as it continues to meet our selection criteria. INTERNATIONAL EQUITIES

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

BlackRock Continental European 3.85 Yes 1.21 Yes

Threadneedle European Select 3.95 Yes 0.92 No

BlackRock European Dynamic 4.05 Yes 1.35 Yes

Schroder European 4.10 Yes 0.64 Yes

Jupiter European Income 4.40 Yes 1.05 Yes Jupiter European Special Situations 4.50 Yes 0.72 Yes

GLG Esprit Continental Europe 4.55 Yes 0.49 Yes

Schroder European Alpha Plus 4.70 Yes 0.65 Yes

Henderson European Growth 5.05 Yes 0.59 Yes

EURO

PE (E

XCLD

ING

UK)

Liontrust European Growth 5.20 Yes 0.42 Yes

We continue to recommend the Jupiter European Income, Threadneedle European Select and Henderson European Growth funds as they continue to meet our selection criteria.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

EURO

PE

(INC

LUDI

NG

UK)

There are no funds which pass our selection criteria this quarter.

We do not currently recommend any Europe (Including UK) funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

Threadneedle European Smaller Companies 4.45 Yes 0.91 No

EURO

PEA

N

SMA

LLER

CO

MPA

NIE

S

Baring Europe Select 4.85 Yes 0.88 Yes We continue to recommend the Threadneedle European Smaller Companies fund as it continues to meet our selection criteria.

Page 12: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

11

FUN

D RE

SEA

RCH

– O

ctob

er 2

012 C

onsis

tenc

y Sc

ore

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

AXA Framlington American 4.55 Yes 0.54 Yes

BlackRock CIF North American Equity Tracker 4.55 Yes 0.34 No

Baillie Gifford American 4.70 Yes 0.41 Yes

GAM North American 4.75 Yes 0.51 Yes

Schroder US Mid Cap 4.80 Yes 0.67 Yes

NO

RTH

AM

ERIC

A

Jupiter North American Income 5.00 Yes 0.61 Yes We continue to recommend the BlackRock CIF North American Equity Tracker fund as it continues to meet our selection criteria

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

NO

RTH

AM

ERIC

A

SMA

LLER

CO

MPA

NIE

S

There are no funds which pass our selection criteria this quarter.

We do not currently recommend any North American Smaller Companies funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

Schroder Tokyo 4.05 Yes 0.87 Yes

JAPA

N

Jupiter Japan Income 4.80 Yes 0.54 Yes

We continue to recommend the Schroder Tokyo fund as it continues to meet our selection criteria.

We do not currently recommend any Japan Smaller Companies funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

Newton Asian Income 3.80 Yes 1.16 Yes

Schroder Asian Income 4.05 Yes 0.96 Yes

First State Asia Pacific Sustainability 4.25 Yes 0.90 Yes

Aberdeen Asia Pacific 4.60 Yes 0.76 Yes

First State Asia Pacific 4.70 Yes 0.86 Yes ASI

A P

AC

IFIC

(EXC

LUDI

NG

JAPA

N)

First State Asia Pacific Leaders 4.90 Yes 0.80 Yes As the Fidelity South East Asia fund has ‘slipped’, quite dramatically, to fail our selection criteria, we have replaced it with the Newton Asian Income fund which we now recommend alongside the First State Asia Pacific Leaders fund. Again, this clearly illustrates the benefits of diversification between different funds, within a sector.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

JAPA

N

SM

ALL

ER C

OM

PAN

IES

There are no funds which pass our selection criteria this quarter.

Page 13: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

12

FUN

D RE

SEA

RCH

– O

ctob

er 2

012 C

onsis

tenc

y Sc

ore

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

ASI

A P

AC

IFIC

(IN

CLU

DIN

G JA

PAN

) Aberdeen Asia Pacific & Japan 4.15 Yes 1.07 Yes

We do not currently recommend any Asia Pacific (Including Japan) funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

CHI

NA

First State Greater China Growth 4.25 Yes 1.05 Yes We do not currently recommend any China funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Aberdeen Emerging Markets 3.95 Yes 1.44 Yes

First State Global Emerging Markets 4.30 Yes 1.12 Yes

GLO

BAL

EMER

GIN

G M

ARK

ETS

First State Global Emerging Markets Leaders 4.45 Yes 1.03 Yes

We do not currently recommend any Global Emerging Markets funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Baillie Gifford International 4.55 Yes 0.50 Yes

Aberdeen World Equity 4.65 Yes 0.81 Yes

M&G Global Growth 4.65 Yes 0.48 Yes

M&G Global Basics 4.75 Yes 0.23 Yes

GLO

BAL

GRO

WTH

Invesco Perpetual Global Smaller Companies 4.90 Yes 0.63 Yes

We continue to recommend the Baillie Gifford International and M&G Global Basics funds as they continue to meet our selection criteria.

We do not currently recommend any Global Specialist funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

TEC

HNO

LOG

Y &

TELE

CO

MS

AXA Framlington Global Technology 5.00 Yes 0.28 Yes

We do not currently recommend any Technology & Telecoms funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

GLO

BAL

SPEC

IALI

ST

First State Indian Subcontinent 4.35 Yes 0.46 Yes

Page 14: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

13

FUN

D RE

SEA

RCH

– O

ctob

er 2

012

MANAGED / MULTI-ASSET FUNDS We do not currently recommend any Managed / Multi-Asset funds.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rmat

ion

Ratio

Ind

epen

dent

Ra

tings

MIX

ED IN

VEST

MEN

T 0%

TO 3

5% IN

SHA

RES

There are no funds which pass our selection criteria this quarter.

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

Invesco Perpetual Distribution 3.90 Yes 0.68 Yes

Jupiter Merlin Income 4.40 Yes 1.16 Yes

Fidelity Multi Asset Strategic 4.80 Yes 0.83 Yes

Prudential Managed Defensive 4.80 Yes 0.63 Yes

MIX

ED IN

VEST

MEN

T 20

% TO

60%

IN S

HARE

S

Threadneedle Equity & Bond 4.85 Yes 0.63 Yes

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

AXA Framlington Managed Balanced 4.70 Yes 0.39 Yes M

IXED

INVE

STM

ENT

40%

TO 8

5% IN

SHA

RES

Newton Balanced 4.95 Yes 0.58 Yes

Con

siste

ncy

Scor

e

Fund

Man

ager

Te

nure

(3 y

rs +

)

Info

rma

tion

Ratio

Ind

epen

dent

Ra

tings

FLEX

IBLE

INVE

STM

ENT

Threadneedle Global Equity 4.75 Yes 0.42 Yes SUMMARY

Funds Researched 2,822

Funds Passing our Criteria 95

Funds Currently Recommended 32 Please note: further details of all funds currently being recommended can be found in the following section.

Page 15: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

14

GRO

WTH

FUN

D DE

TAIL

S –

Oct

ober

201

2 INDEPENDENT RATINGS CHARGES

FUND 1 CITYWIRE FE CROWN OBSR S&P CAPITAL

FE ALPHA MANAGER AMC 2 TER 3

BlackRock Cash 1 Crown 0.50% 0.58% Premier UK Money Market 2 Crowns 0.50% 0.62% Allianz Gilt Yield A 3 Crowns Bronze Yes 0.50% 0.53% Fidelity MoneyBuilder Income 3 Crowns Gold Yes 0.45% 0.65% Invesco Perpetual Corporate Bond 2 Crowns Gold Yes 0.75% 0.94% Invesco Perpetual Monthly Income Plus A 4 Crowns Gold Gold Yes 0.75% 0.94% Kames High Yield Bond 4 Crowns Silver 0.90% 0.96% L&G All Stocks Index Linked Gilt Index 3 Crowns 0.20% 0.23% M&G Strategic Corporate Bond 3 Crowns Silver Yes 0.75% 0.91% Investec Emerging Markets Local Currency Debt 3 Crowns Bronze Yes 1.00% 1.13% Ignis UK property 2 Crowns 1.00% 1.02% M&G Property Portfolio 3 Crowns 1.00% 1.16% Threadneedle UK Property 2 Crowns 1.00% 1.14% Cazenove UK Opportunities AAA 5 Crowns Bronze Yes 1.00% 1.04% Franklin UK Mid Cap A 4 Crowns Silver Yes 1.00% 1.08% JOHCM UK Equity Income A 4 Crowns Silver 0.75% 0.78% Liontrust Special Situations AAA 5 Crowns Bronze Yes 1.25% 1.42% M&G Recovery 2 Crowns Gold Platinum Yes 1.00% 1.15% Old Mutual UK Select Smaller Companies A 3 Crowns Gold Platinum Yes 1.25% 1.42% Henderson European Growth AA 5 Crowns Gold Yes 1.00% 1.26% Jupiter European Income AAA 5 Crowns Gold Platinum Yes 1.00% 1.29% Threadneedle European Select AAA 5 Crowns Yes 1.00% 1.18% Threadneedle European Smaller Companies AAA 4 Crowns Yes 1.00% 1.19% BlackRock CIF North American Equity Index 4 Crowns 0.20% 0.22% Newton Asian Income 5 Crowns Silver Gold 1.00% 1.16% First State Asia Pacific Leaders A 5 Crowns Gold Platinum Yes 1.00% 1.05% Schroder Tokyo AAA 5 Crowns Gold 1.00% 1.17% Baillie Gifford International 3 Crowns Bronze 1.00% 1.04% M&G Global Basics 3 Crowns Gold Platinum Yes 1.00% 1.17% NOTES 1. For fund objectives please see the latest Key Investor Information Documents (KIIDs). 2. AMC is the discounted annual management charge applicable to the fund and is calculated by deducting the usual ‘trail commission’ payable

to an IFA from the standard annual management charge. 3. TER is the total expense ratio of the fund, calculated as at 5th October 2012 with data provided by Financial Express, and includes the fund’s

annual management charge, administration, trustee and audit fees. Again, the usual ‘trail commission’ payable to an IFA has been deducted.

Page 16: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

15

INC

OM

E FU

ND

DETA

ILS

– O

ctob

er 2

012

INDEPENDENT RATINGS CHARGES

FUND 1 CITYWIRE FE CROWN OBSR S&P CAPITAL

FE ALPHA MANAGER AMC 2 TER 3

BlackRock Cash 1 Crown 0.50% 0.58% Premier UK Money Market 2 Crowns 0.50% 0.62% Allianz Gilt Yield A 3 Crowns Bronze Yes 0.50% 0.53% Fidelity MoneyBuilder Income 3 Crowns Gold Yes 0.45% 0.65% Invesco Perpetual Corporate Bond 2 Crowns Gold Yes 0.75% 0.94% Invesco Perpetual Monthly Income Plus A 4 Crowns Gold Gold Yes 0.75% 0.94% Kames High Yield Bond 4 Crowns Silver 0.90% 0.96% L&G All Stocks Index Linked Gilt Index 3 Crowns 0.20% 0.23% M&G Strategic Corporate Bond 3 Crowns Silver Yes 0.75% 0.91% Investec Emerging Markets Local Currency Debt 3 Crowns Bronze Yes 1.00% 1.13% Ignis UK property 2 Crowns 1.00% 1.02% M&G Property Portfolio 3 Crowns 1.00% 1.16% Threadneedle UK Property 2 Crowns 1.00% 1.14% Artemis Income 3 Crowns Gold Yes 1.00% 1.05% Ecclesiastical Higher Income 5 Crowns Yes 0.75% 0.83% JOHCM UK Equity Income A 4 Crowns Silver 0.75% 0.78% Royal London UK Equity Income AA 4 Crowns Bronze Platinum 0.75% 0.82% Threadneedle UK Equity Income A 4 Crowns Silver Gold Yes 1.00% 1.11% NOTES 1. For fund objectives please see the latest Key Investor Information Documents (KIIDs). 2. AMC is the discounted annual management charge applicable to the fund and is calculated by deducting the usual ‘trail commission’ payable

to an IFA from the standard annual management charge. 3. TER is the total expense ratio of the fund, calculated as at 10th October 2012 with data provided by Financial Express, and includes the fund’s

annual management charge, administration, trustee and audit fees. Again, the usual ‘trail commission’ payable to an IFA has been deducted.

Page 17: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

16

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

INDIVIDUAL SAVINGS ACCOUNTS – GROWTH PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Acc) Premier UK Money Market (Acc) Allianz Gilt Yield (Inc) 10.20% 7.95% 6.00% 4.65% 3.00% 1.35% Fidelity MoneyBuilder Income (Inc) 10.20% 7.95% 6.00% 4.65% 3.00% 1.35% Invesco Perpetual Corporate Bond (Acc) 10.20% 7.95% 6.00% 4.65% 3.00% 1.35% Invesco Perpetual Monthly Income Plus (Acc) 17.00% 13.25% 10.00% 7.75% 5.00% 2.25% Kames High Yield Bond A (Acc) 5.10% 3.98% 3.00% 2.31% 1.50% 0.68% L&G All Stocks Index Linked Gilt Index (Acc) 5.10% 3.98% 3.00% 2.33% 1.50% 0.68% M&G Strategic Corporate Bond (share class A) (Acc) 10.20% 7.96% 6.00% 4.66% 3.00% 1.36% Investec Emerging Market Local Currency Debt A (Acc) 1.00% Ignis UK Property (Acc) 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% M&G Property Portfolio (share class A) (Inc) 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% Threadneedle UK Property (Acc) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 0.60% Cazenove UK Opportunities B (Acc) 0.15% 0.15% Franklin UK Mid Cap (Inc) 0.15% 0.15% JOHCM UK Equity Income (Acc) 0.20% 0.20% Liontrust Special Situations R (Inc) 0.20% 0.20% M&G Recovery (share class X) (Acc) 0.20% 0.20% Old Mutual UK Select Smaller Co ICVC (Acc) 0.10% 0.08% Henderson European Growth (Acc) 1.75% 3.25% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Jupiter European (Inc) 1.75% 3.25% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Threadneedle European Select (Acc) 1.75% 3.25% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Threadneedle European Smaller Companies (Acc) 1.75% 3.25% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% BlackRock CIF North American Equity Tracker D (Acc) 3.00% 6.00% 9.00% 11.00% 13.00% 15.00% 17.00% 19.00% First State Asia Pacific Leaders (Acc) 1.00% 2.50% 3.50% 4.00% 5.00% 5.50% 6.50% 7.50% Newton Asian Income (Inc) 1.00% 2.50% 3.50% 4.00% 5.00% 5.50% 6.50% 7.50% Schroder Tokyo A (Acc) 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 10.00% Baillie Gifford International (Acc) 0.80% 1.98% 2.80% 3.20% 4.00% 4.40% 5.20% 6.00% M&G Global Basics (share class X) (Acc) 1.20% 3.00% 4.20% 4.80% 6.00% 6.60% 7.80% 9.00% Portfolio Total Expense Ratio* 0.87% 0.90% 0.92% 0.94% 0.96% 0.99% 1.00% 0.99% * Excludes any initial, adviser and product charges.

Page 18: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

17

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

PENSIONS – GROWTH PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Acc) 36.50% 23.50% 12.00% 4.00% Premier UK Money Market (Acc) 36.50% 23.50% 12.00% 4.00% Allianz Gilt Yield (Inc) 1.80% 3.60% 5.25% 6.45% 6.00% 4.65% 3.00% 1.35% Fidelity MoneyBuilder Income (Inc) 1.80% 3.60% 5.25% 6.45% 6.00% 4.65% 3.00% 1.35% Invesco Perpetual Corporate Bond (Acc) 1.80% 3.60% 5.25% 6.45% 6.00% 4.65% 3.00% 1.35% Invesco Perpetual Monthly Income Plus (Acc) 3.00% 6.00% 8.75% 10.75% 10.00% 7.75% 5.00% 2.25% Kames High Yield Bond A (Acc) 0.90% 1.80% 2.63% 3.23% 3.00% 2.31% 1.50% 0.68% L&G All Stocks Index Linked Gilt Index (Acc) 0.90% 1.80% 2.63% 3.23% 3.00% 2.33% 1.50% 0.68% M&G Strategic Corporate Bond (share class A) (Acc) 1.80% 3.60% 5.26% 6.46% 6.00% 4.66% 3.00% 1.36% Investec Emerging Market Local Currency Debt A (Acc) Ignis UK Property (Acc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% M&G Property Portfolio (share class A) (Inc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% Threadneedle UK Property (Acc) 2.80% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 0.60% Cazenove UK Opportunities B (Acc) 0.15% 0.15% Franklin UK Mid Cap (Inc) 0.15% 0.15% JOHCM UK Equity Income (Acc) 0.20% 0.20% Liontrust Special Situations R (Inc) 0.20% 0.20% M&G Recovery (share class X) (Acc) 0.20% 0.20% Old Mutual UK Select Smaller Co ICVC (Acc) 0.10% 0.08% Henderson European Growth (Acc) 0.25% 1.50% 2.50% 3.50% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Jupiter European (Inc) 0.25% 1.50% 2.50% 3.50% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Threadneedle European Select (Acc) 0.25% 1.50% 2.50% 3.50% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% Threadneedle European Smaller Companies (Acc) 0.25% 1.50% 2.50% 3.50% 4.50% 5.50% 6.25% 7.75% 8.50% 9.50% BlackRock CIF North American Equity Tracker D (Acc) 3.00% 5.00% 7.00% 9.00% 11.00% 13.00% 15.00% 17.00% 19.00% First State Asia Pacific Leaders (Acc) 1.00% 2.00% 2.50% 3.50% 4.00% 5.00% 5.50% 6.50% 7.50% Newton Asian Income (Inc) 1.00% 2.00% 2.50% 3.50% 4.00% 5.00% 5.50% 6.50% 7.50% Schroder Tokyo A (Acc) 1.00% 3.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 10.00% Baillie Gifford International (Acc) 0.80% 1.58% 1.98% 2.80% 3.20% 4.00% 4.40% 5.20% 6.00% M&G Global Basics (share class X) (Acc) 1.20% 2.40% 3.00% 4.20% 4.80% 6.00% 6.60% 7.80% 9.00% Portfolio Total Expense Ratio* 0.70% 0.77% 0.84% 0.88% 0.92% 0.94% 0.96% 0.99% 1.00% 0.99% * Excludes any initial, adviser and product charges.

Page 19: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

18

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

COLLECTIVES – GROWTH PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Acc) 38.00% 26.50% 16.50% 10.00% 3.50% Premier UK Money Market (Acc) 38.00% 26.50% 16.50% 10.00% 3.50% Allianz Gilt Yield (Inc) 1.50% 2.55% 3.60% 4.20% 4.80% 4.50% 2.85% 1.35% Fidelity MoneyBuilder Income (Inc) 1.50% 2.55% 3.60% 4.20% 4.80% 4.50% 2.85% 1.35% Invesco Perpetual Corporate Bond (Acc) 1.50% 2.55% 3.60% 4.20% 4.80% 4.50% 2.85% 1.35% Invesco Perpetual Monthly Income Plus (Acc) 2.50% 4.25% 6.00% 7.00% 8.00% 7.50% 4.75% 2.25% Kames High Yield Bond A (Acc) 0.75% 1.28% 1.80% 2.10% 2.40% 2.25% 1.43% 0.68% L&G All Stocks Index Linked Gilt Index (Acc) 0.75% 1.28% 1.80% 2.10% 2.40% 2.25% 1.43% 0.68% M&G Strategic Corporate Bond (share class A) (Acc) 1.50% 2.56% 3.60% 4.20% 4.80% 4.50% 2.86% 1.36% Investec Emerging Market Local Currency Debt A (Acc) Ignis UK Property (Acc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% M&G Property Portfolio (share class A) (Inc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% Threadneedle UK Property (Acc) 2.80% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 0.60% Cazenove UK Opportunities B (Acc) 0.15% 0.30% 0.30% 0.45% 0.60% 0.75% Franklin UK Mid Cap (Inc) 0.15% 0.30% 0.30% 0.45% 0.60% 0.75% JOHCM UK Equity Income (Acc) 0.20% 0.40% 0.40% 0.60% 0.80% 1.00% Liontrust Special Situations R (Inc) 0.20% 0.40% 0.40% 0.60% 0.80% 1.00% M&G Recovery (share class X) (Acc) 0.20% 0.40% 0.40% 0.60% 0.80% 1.00% Old Mutual UK Select Smaller Co ICVC (Acc) 0.10% 0.20% 0.20% 0.30% 0.38% 0.48% Henderson European Growth (Acc) 1.50% 2.75% 3.50% 4.25% 5.25% 6.50% 7.00% 8.50% 9.50% Jupiter European (Inc) 1.50% 2.75% 3.50% 4.25% 5.25% 6.50% 7.00% 8.50% 9.50% Threadneedle European Select (Acc) 1.50% 2.75% 3.50% 4.25% 5.25% 6.50% 7.00% 8.50% 9.50% Threadneedle European Smaller Companies (Acc) 1.50% 2.75% 3.50% 4.25% 5.25% 6.50% 7.00% 8.50% 9.50% BlackRock CIF North American Equity Tracker D (Acc) 3.00% 5.00% 7.00% 9.00% 10.00% 12.00% 14.00% 17.00% 19.00% First State Asia Pacific Leaders (Acc) 1.00% 2.00% 2.50% 3.50% 4.00% 4.50% 5.50% 6.50% 7.50% Newton Asian Income (Inc) 1.00% 2.00% 2.50% 3.50% 4.00% 4.50% 5.50% 6.50% 7.50% Schroder Tokyo A (Acc) 2.00% 3.00% 4.00% 4.00% 5.00% 6.00% 7.00% 8.00% 10.00% Baillie Gifford International (Acc) 0.78% 1.60% 2.00% 2.80% 3.20% 3.60% 4.40% 5.20% 6.00% M&G Global Basics (share class X) (Acc) 1.20% 2.40% 3.00% 4.20% 4.80% 5.40% 6.60% 7.80% 9.00% Portfolio Total Expense Ratio* 0.69% 0.76% 0.83% 0.87% 0.91% 0.95% 0.98% 1.00% 1.00% 0.99% * Excludes any initial, adviser and product charges.

Page 20: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

19

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

INVESTMENT BONDS – GROWTH PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Acc) 38.00% 26.00% 16.00% 9.50% 3.00% Premier UK Money Market (Acc) 38.00% 26.00% 16.00% 9.50% 3.00% Allianz Gilt Yield (Inc) 1.50% 2.70% 3.60% 4.35% 5.10% 4.35% 2.70% 1.20% Fidelity MoneyBuilder Income (Inc) 1.50% 2.70% 3.60% 4.35% 5.10% 4.35% 2.70% 1.20% Invesco Perpetual Corporate Bond (Acc) 1.50% 2.70% 3.60% 4.35% 5.10% 4.35% 2.70% 1.20% Invesco Perpetual Monthly Income Plus (Acc) 2.50% 4.50% 6.00% 7.25% 8.50% 7.25% 4.50% 2.00% Kames High Yield Bond A (Acc) 0.75% 1.35% 1.80% 2.18% 2.55% 2.18% 1.35% 0.60% L&G All Stocks Index Linked Gilt Index (Acc) 0.75% 1.35% 1.80% 2.18% 2.55% 2.18% 1.35% 0.60% M&G Strategic Corporate Bond (share class A) (Acc) 1.50% 2.70% 3.60% 4.36% 5.10% 4.36% 2.70% 1.20% Investec Emerging Market Local Currency Debt A (Acc) Ignis UK Property (Acc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% M&G Property Portfolio (share class A) (Inc) 5.60% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 1.20% Threadneedle UK Property (Acc) 2.80% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 0.60% Cazenove UK Opportunities B (Acc) 0.30% 0.45% 0.60% 0.75% 1.05% 1.20% Franklin UK Mid Cap (Inc) 0.30% 0.45% 0.60% 0.75% 1.05% 1.20% JOHCM UK Equity Income (Acc) 0.40% 0.60% 0.80% 1.00% 1.40% 1.60% Liontrust Special Situations R (Inc) 0.40% 0.60% 0.80% 1.00% 1.40% 1.60% M&G Recovery (share class X) (Acc) 0.40% 0.60% 0.80% 1.00% 1.40% 1.60% Old Mutual UK Select Smaller Co ICVC (Acc) 0.20% 0.28% 0.40% 0.48% 0.70% 0.80% Henderson European Growth (Acc) 1.50% 2.75% 3.50% 4.25% 5.00% 6.00% 7.00% 8.50% 9.50% Jupiter European (Inc) 1.50% 2.75% 3.50% 4.25% 5.00% 6.00% 7.00% 8.50% 9.50% Threadneedle European Select (Acc) 1.50% 2.75% 3.50% 4.25% 5.00% 6.00% 7.00% 8.50% 9.50% Threadneedle European Smaller Companies (Acc) 1.50% 2.75% 3.50% 4.25% 5.00% 6.00% 7.00% 8.50% 9.50% BlackRock CIF North American Equity Tracker D (Acc) 3.00% 5.00% 7.00% 8.00% 10.00% 12.00% 14.00% 17.00% 19.00% First State Asia Pacific Leaders (Acc) 1.00% 2.00% 2.50% 3.00% 4.00% 4.50% 5.00% 6.50% 7.50% Newton Asian Income (Inc) 1.00% 2.00% 2.50% 3.00% 4.00% 4.50% 5.00% 6.50% 7.50% Schroder Tokyo A (Acc) 2.00% 3.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 10.00% Baillie Gifford International (Acc) 0.80% 1.60% 2.00% 2.40% 3.20% 3.60% 4.00% 5.20% 6.00% M&G Global Basics (share class X) (Acc) 1.20% 2.40% 3.00% 3.60% 4.80% 5.40% 6.00% 7.80% 9.00% Portfolio Total Expense Ratio* 0.69% 0.76% 0.84% 0.88% 0.92% 0.96% 0.98% 1.00% 1.00% 0.99% * Excludes any initial, adviser and product charges.

Page 21: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

20

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

INDIVIDUAL SAVINGS ACCOUNTS – INCOME PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Inc) Premier UK Money Market (Inc) Allianz PIMCO Gilt Yield (Inc) 10.65% 8.25% 6.45% 4.95% 3.45% Fidelity MoneyBuilder Income (Inc) 10.65% 8.25% 6.45% 4.95% 3.45% Invesco Perpetual Corporate Bond (Inc) 10.65% 8.25% 6.45% 4.95% 3.45% Invesco Perpetual Monthly Income Plus (Inc) 17.75% 13.75% 10.75% 8.25% 5.75% Kames High Yield Bond A (Inc) 5.33% 4.13% 3.23% 2.46% 1.71% L&G All Stocks Index Linked Gilt Index (inc) 5.33% 4.13% 3.23% 2.48% 1.73% M&G Strategic Corporate Bond (share class A) (Inc) 10.66% 8.26% 6.46% 4.96% 3.46% Investec Emerging Market Local Currency Debt A (Inc) Ignis UK Property (Inc) 6.00% 6.00% 6.00% 6.00% 6.00% M&G Property Portfolio (share class A) (Inc) 6.00% 6.00% 6.00% 6.00% 6.00% Threadneedle UK Property (Inc) 3.00% 2.98% 2.98% 3.00% 3.00% Artemis Income (Inc) 2.80% 6.00% 8.40% 10.40% 12.40% Ecclesiastical Higher Income A (Inc) 2.80% 6.00% 8.40% 10.40% 12.40% JOHCM UK Equity Income (Inc) 2.80% 6.00% 8.40% 10.40% 12.40% Royal London UK Equity Income (Inc) 2.80% 6.00% 8.40% 10.40% 12.40% Threadneedle UK Equity Income (Inc) 2.78% 6.00% 8.40% 10.40% 12.40% Portfolio Total Expense Ratio* 0.82% 0.80% 0.79% 0.78% 0.78% * Excludes any initial, adviser and product charges.

Page 22: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

21

PORT

FOLI

O B

REA

KDO

WN

– O

ctob

er 2

012

COLLECTIVES – INCOME PORTFOLIOS RISK SCORE 1 2 3 4 5 6 7 8 9 10 BlackRock Cash (Inc) 36.50% 24.50% Premier UK Money Market (Inc) 36.50% 24.50% Allianz PIMCO Gilt Yield (Inc) 1.65% 3.30% 10.65% 7.95% 6.45% 4.95% 3.45% Fidelity MoneyBuilder Income (Inc) 1.65% 3.30% 10.65% 7.95% 6.45% 4.95% 3.45% Invesco Perpetual Corporate Bond (Inc) 1.65% 3.30% 10.65% 7.95% 6.45% 4.95% 3.45% Invesco Perpetual Monthly Income Plus (Inc) 2.75% 5.50% 17.75% 13.25% 10.75% 8.25% 5.75% Kames High Yield Bond A (Inc) 0.83% 1.65% 5.33% 3.98% 3.23% 2.48% 1.71% L&G All Stocks Index Linked Gilt Index (inc) 0.83% 1.65% 5.33% 3.98% 3.23% 2.46% 1.73% M&G Strategic Corporate Bond (share class A) (Inc) 1.66% 3.30% 10.66% 7.96% 6.46% 4.96% 3.46% Investec Emerging Market Local Currency Debt A (Inc) 1.98% Ignis UK Property (Inc) 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% M&G Property Portfolio (share class A) (Inc) 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Threadneedle UK Property (Inc) 3.00% 3.00% 3.00% 3.00% 2.98% 3.00% 3.00% Artemis Income (Inc) 0.20% 2.80% 2.80% 6.00% 8.40% 10.40% 12.40% Ecclesiastical Higher Income A (Inc) 0.20% 2.80% 2.80% 6.00% 8.40% 10.40% 12.40% JOHCM UK Equity Income (Inc) 0.20% 2.80% 2.80% 6.00% 8.40% 10.40% 12.40% Royal London UK Equity Income (Inc) 0.20% 2.80% 2.80% 6.00% 8.40% 10.40% 12.40% Threadneedle UK Equity Income (Inc) 0.18% 2.80% 2.78% 6.00% 8.40% 10.40% 12.40% Portfolio Total Expense Ratio* 0.70% 0.73% 0.82% 0.81% 0.79% 0.78% 0.78% * Excludes any initial, adviser and product charges.

Page 23: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

22

PERF

ORM

AN

CE

DATA

– O

ctob

er 2

012

GROWTH PORTFOLIOS TO 30TH SEPTEMBER 2012

INDIVIDUAL SAVINGS ACCOUNTS

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 28

/11/

08

1 2 3 4.26% 4.14% 12.38% 11.98% 25.74% 49.01%

4 4.59% 3.49% 12.66% 11.20% 24.40% 51.21%

5 4.81% 2.90% 12.85% 10.95% 23.68% 53.17%

6 4.95% 2.45% 12.97% 9.80% 21.88% 52.54%

7 5.02% 1.93% 13.01% 9.46% 21.03% 53.14%

8 5.33% 1.61% 13.13% 8.62% 19.61% 53.11%

9 5.32% 1.00% 12.55% 6.78% 15.69% 51.20%

10 5.96% 1.03% 13.72% 6.29% 14.42% 53.77%

PENSIONS

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 28

/11/

08

1 0.82% 0.96% 3.21% 3.90% 10.07% 18.12% 2 2.18% 1.73% 6.43% 6.36% 18.03% 36.27% 3 3.53% 2.49% 9.74% 8.91% 22.23% 46.02%

4 4.44% 2.98% 11.73% 10.28% 23.38% 49.95%

5 4.81% 2.90% 12.85% 10.95% 23.68% 53.17%

6 4.95% 2.45% 12.97% 9.80% 21.88% 52.54%

7 5.02% 1.93% 13.01% 9.46% 21.03% 53.14%

8 5.22% 1.50% 13.01% 8.50% 19.48% 52.95%

9 5.32% 1.00% 12.55% 6.78% 15.69% 51.20%

10 5.96% 1.03% 13.72% 6.29% 14.42% 53.77%

COLLECTIVES

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 28

/11/

08

1 0.55% 0.67% 2.41% 2.94% 8.09% 13.36% 2 1.85% 1.19% 5.47% 5.22% 14.38% 27.38% 3 2.98% 1.64% 8.12% 6.74% 18.14% 37.26%

4 3.76% 2.03% 9.86% 7.77% 19.62% 41.21%

5 4.48% 2.24% 11.58% 8.98% 20.98% 44.58%

6 4.81% 2.14% 12.48% 9.03% 20.72% 46.41%

7 5.07% 1.88% 13.02% 8.96% 20.41% 47.32%

8 5.19% 1.47% 13.25% 8.62% 19.51% 50.07%

9 5.21% 0.88% 12.34% 6.46% 15.23% 49.12%

10 5.88% 0.95% 13.58% 6.08% 14.12% 53.19%

INVESTMENT BONDS

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 28

/11/

08

1 0.55% 0.67% 2.41% 2.94% 8.16% 13.36% 2 1.89% 1.24% 5.52% 5.21% 14.66% 27.70% 3 2.96% 1.76% 8.20% 7.08% 18.89% 38.19%

4 3.83% 2.03% 10.17% 8.23% 20.46% 41.69%

5 4.46% 2.22% 11.69% 9.33% 21.73% 45.43%

6 4.83% 2.18% 12.68% 9.62% 21.85% 47.19%

7 5.03% 1.85% 13.09% 9.23% 20.75% 47.55%

8 5.19% 1.45% 13.33% 8.66% 20.02% 50.34%

9 5.21% 0.88% 12.34% 6.66% 15.54% 49.80%

10 5.88% 0.95% 13.86% 6.40% 15.38% 54.88%

Page 24: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

23

PERF

ORM

AN

CE

DATA

– O

ctob

er 2

012

INCOME PORTFOLIOS TO 30TH SEPTEMBER 2012

INDIVIDUAL SAVINGS ACCOUNTS

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 01

/01/

09

1 2 3 4.13% 4.72% 13.06% 14.23% 29.19% 44.86%

4 4.20% 4.58% 13.82% 14.92% 29.80% 45.56%

5 4.26% 4.47% 14.39% 15.60% 30.47% 46.32%

6 4.31% 4.37% 14.91% 16.09% 30.82% 46.70%

7 4.36% 4.28% 15.37% 16.39% 30.92% 46.79%

8

9

10

COLLECTIVES

Risk

Sc

ore

3 m

onth

s

6 m

onth

s

1 ye

ar

2 ye

ars

3 ye

ars

Sinc

e 01

/01/

09

1 0.58% 0.68% 2.40% 2.99% 8.22% 13.39% 2 1.85% 1.89% 6.10% 6.57% 16.66% 27.27% 3 3.94% 4.30% 12.16% 12.52% 26.24% 40.47%

4 4.03% 4.20% 13.00% 13.35% 27.08% 41.50%

5 4.09% 4.12% 13.63% 14.14% 27.96% 42.54%

6 4.15% 4.04% 14.21% 14.74% 28.50% 43.20%

7 4.20% 3.98% 14.73% 15.14% 28.79% 43.56%

8

9

10

NOTES The above performance figures are on a bid to bid basis and do not take into account any initial charges, product or adviser fees. The above performance figures are based on the underlying portfolio of funds used for each of our OPUS Portfolios. For Individual Savings Accounts and Pensions the figures are quoted gross, i.e. allowing for the tax reclaimable within the product wrapper. For Collectives the figures are quoted net of basic rate tax. For investment bonds the figures do not take account of any Life Company taxation within the product wrapper. The above performance figures are based on a total return basis, i.e. include any income which may have been distributed. Past performance is not necessarily a guide to the future and the value of investments will, at times, fall as well as rise. Source: Financial Express

Page 25: INTRODUCTION TO INVESTMENTS October 2012.pdf · The values of the individual investments within the portfolio will fluctuate, but because they generally behave differently from each

24

ALW

AYS

REM

EMBE

R…

Unlike cash deposits, which are guaranteed to £85,000, all other investments are not guaranteed and will, at times, fall in value as well as rise.

Ultimately you could get back less than you invest. You should always retain sufficient funds to meet any short term

expenditure requirements. Any yields will vary over time so income is variable and not

guaranteed. Tax rules referred to are those that currently apply. This document, in isolation, is not personal advice. Predicting the future is impossible; working towards the future

requires a dedicated, ongoing service.

premium investment solution

ortfolios o us

ortfolios p o us