Style Research / Trucost Partnership

June 2008

Overview

• Carbon as an investment issue

• Style Research Trucost Partnership

• Style Research Portfolio Analyzer– Portfolio Carbon Data– Sector Data– Snail Trail

Carbon as an investment issue

• In the green paper on ‘Adaptation to climate change in Europe – options for EU action’ published in June 2007 it states that ‘a swift transition to a low carbon economy is the central pillar of the EU’s integrated climate change and energy policy’. Most countries are not on track to meet their reduction targets and carbon taxes and an extension of the EU Emissions trading Scheme are planned.

• Merrill Lynch in a research paper of August 2007 commented ‘we think a regulatory drive will impact all companies across all sectors, not just the heavy emitters’.

• America and Australia will have some form of carbon pricing by 2012 and a global scheme appears increasingly likely. Where carbon pricing has led other environmental factors will follow and investors need to be aware of the potential impacts of environmental factors on company valuations.

GEN0190n.ppt 4

UBS EU ETS CO2 Price Forecast

• EU ETS CO2 Price per February 2007 is around 20 EUR/t

Style Research Trucost Partnership

• Style Research and environmental research organisation Trucost have launched a partnership to provide an enhanced analysis of the carbon performance of portfolios to fund managers worldwide

• For the first time, Trucost’s world-class carbon data is available through an independent provider of global portfolio analysis. The partnership means that even more asset managers have direct access to Trucost data, and can analyse the carbon impacts of portfolios using holdings-based Style-and-Risk analysis software

• Asset managers can analyse the carbon performance of their equity portfolios against a chosen benchmark, such as the FTSE All-Share, S&P 500 or Russell 1000. The analysis indicates the extent to which a fund’s carbon impact varies from that of the benchmark. Funds with larger carbon footprints could have greater exposure to carbon costs imposed by policy measures to address climate change

Style Research Portfolio Analyzer

Overall output

High Carbon

Low Carbon

Portfolio Style Skyline™

-3.5

0.1

-0.5

-1.7 -1.5-1.9

4.8

3.8

0.2

2.8

1.62.0

1.30.7

-0.1

-2.2

3.2

0.6

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Style Factors

Sty

le T

ilt™

Overall output

Style Distribution

0

10

20

30

40

Style

% W

eig

ht

PortfolioBenchmarkCov erageMarket

Utilities

Utilities Style Skyline

-1.0-0.6

0.3

-0.7

0.0

-0.9

1.31.7

0.7

1.4 1.2

-0.5

-1.2

1.8

-1.3

0.0

1.4

0.9

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Book

to P

rice

Divide

nd Y

ield

Earnin

gs Y

ld

C'Flow

Yiel

d

Sales t

o Pric

e

EBITDA to

Pric

e

Rtn o

n Equ

ity

Earnin

gs G

rowth

Inco

me/

Sales

Sales G

rowth

IBES 1

2Mth

Gr

IBES 1

Yr Rev

Mar

ket C

ap

Mar

ket B

eta

Mom

entu

m S

T

Mom

entu

m M

T

Debt/E

quity

Carbo

n Fo

otpr

int

Style Factors

Sty

le T

ilt

16

Basic Materials

Basic Materials S tyle Skyline

-3.1

-0.4-1.4

-2.5-3.1 -2.9

1.2 0.7 0.81.7

3.0 3.2

1.8

-1.2

1.4

-1.2

0.8 0.9

-4.0-3.0-2.0-1.00.01.02.03.04.0

Style Factors

Styl

e Ti

lt

22

Style Tilts

Carbon Footprint - Trucost [CASA]

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

Time Period

Sty

le T

ilt

2008/06/06 Trucost Sample

Stock Level Data

Stock level carbon data is available to those clients that would like to understand in more detail the impact of carbon on portfolio performance.

You will be able to

• See actual company carbon numbers. • Build carbon into your standard risk management • Fully understand your portfolio carbon footprint in order

to report to your clients • Carbon Optimise a portfolio