SEPTEMBER 2012      CITYWIRE NORTHERN RETREATHIGH YIELD BONDS & L&G HIGH INCOME TRUSTMartin Reeves      Head of High Yield...
SEPTEMBE                                         BATH INCOME DINNER                                                2   R 2...
SEPTEMBE                      BATH INCOME DINNER                                                  3 R 2012The importance o...
SEPTEMBE                    BATH INCOME DINNER                                                4 R 2012A three-step investm...
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SEPTEMBE                    BATH INCOME DINNER                                                12 R 2012A three-step invest...
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SEPTEMBE                         BATH INCOME DINNER                                             16 R 20123. How do we sele...
SEPTEMBE                  BATH INCOME DINNER                             17 R 20123.1 Our process gives us an independent ...
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SEPTEMBER 2012   CITYWIRE NORTHERN RETREAT                APPENDICES                HIGH YIELD BONDS & L&G HIGH INCOME TRU...
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Hit northern retreat sep 12

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  • YTM Fund 5.82% vs BM: 5.29 Dur: Fund 6.97yrs vs. BM 7.44yrs
  • Macro economists - James and Time both worked at HM Treasury and then at ABN Amro, where we actually worked in the same team. They helped us to get onto the front foot with their call for a global recession
  • Hit northern retreat sep 12

    1. 1. SEPTEMBER 2012 CITYWIRE NORTHERN RETREATHIGH YIELD BONDS & L&G HIGH INCOME TRUSTMartin Reeves Head of High YieldBrigid Jackson Product Specialist
    2. 2. SEPTEMBE BATH INCOME DINNER 2 R 2012The L&G High Income Trust • Looks globally for the best opportunities • Lower risk high yield fund – does not buy CCCs or financials • Dedicated high yield team with 15 years average experience Global high yield market cap GBP EUR EM North America £15bn £85bn £118bn £412bn 51 issuers 129 issuers 265 issuers 691 issuersSource: BoA/ML BB-B index by currency and domicile, as at 31 December 2011
    3. 3. SEPTEMBE BATH INCOME DINNER 3 R 2012The importance of behavioural finance to our investment process• Individuals overestimate their investment acumen  Apply two minds to every problem• Emotion can drive behaviour  Always follow the process• Markets overshoot ‘fair value’  Address through effective risk management
    4. 4. SEPTEMBE BATH INCOME DINNER 4 R 2012A three-step investment processLeverages LGIM’s top-down and bottom-up research Translate our macro Translate our macro Establish the risk Establish the risk Identify profitable Identify profitable forecasts into forecasts into profile of the portfolio profile of the portfolio opportunities opportunities investable themes ––the ‘barbell’ ––security selection security selection investable themes the ‘barbell’
    5. 5. SEPTEMBE BATH INCOME DINNER 5 R 2012Performance of the L&G High Income Trust 50% Fund 40% Benchmark 30% 20% 10% 0% -10% -20% -30% -40% 2007 2008 2009 2010 2011 YTD 2012 Fund 2.86% -25.30% 43.42% 16.15% -2.32% 9.60% Benchmark 3.17% -23.26% 39.60% 12.10% 4.21% 8.70% Difference -0.31% -2.04% +3.82% +4.05% -6.53% +0.90%Source: LGIM. HIT benchmark is 95% Global High Yield BB- B Rated 2% Constrained Ex-Financial (GBP Hedged) 5% British Pound LIBID Overnight, lagged one day .HIT returns are shown for the ‘G’ share class and are gross of fees. Past performance is no guide to the future. YTD returns to 31 Jul 2012.
    6. 6. SEPTEMBE BATH INCOME DINNER 6R 2012High Income Trust – summary Key Points Fund size: £1.4 billion (Jun 2012) Fund Inception: November 2000 Benchmark: IMA Sterling High Yield peer group and composite of 95% Merrill Lynch Global High Yield BB-B Rated 2% Constrained Ex-Financial (local currency) Index and 5% Merrill Lynch GBP LIBID Overnight index Target: 1% pa over benchmark over rolling 3 years (before fees) Portfolio Manager: Martin Reeves Permitted assets and instruments • Typically holds sub-investment grade bonds, cash, OTC derivatives (I/R swaps, currency forwards, CDS) for efficient portfolio management. Convertibles, preference shares and hybrids also permitted. • Maximum 10% cash, maximum 20% CCC*, maximum 70% single B, maximum 100% BB or better • Overseas exposures permitted - hedged to GBP * We do not buy CCC rated bonds but the 20% bucket can be utilised to protect the fund from being a forced seller if the holding is downgraded to CCC.
    7. 7. SEPTEMBE BATH INCOME DINNER 7 R 2012CCCs are the killer in high yieldBBs rarely default, Bs more so Historic default rates (%) Historic default rates (%) 16% 60% BB B CCC 14% 50% 12% 40% 10% 8% 30% 6% AVERAGE 20% AVERAGE 4.4% 20% 4% 10% 2% AVERAGE 1.0% 0% 0% 1990 1991 1992 1993 1995 1996 1997 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1990 1991 1992 1993 1995 1996 1997 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1994 1998 1999 1994 1998 1999 2012e 2013e 2012e 2013eSource: LGIM (forecasts) and Moody’s (historic default rates)
    8. 8. SEPTEMBE BATH INCOME DINNER 8 R 2012BBs have always overcompensated investors for default risk 1,200 12% Liquidity premium Spread to compensate for default 973 10% 1,000 5yr forward default rate (RHS) 800 8% Credit spread (bps) Default rate 600 6% 518 520 449 465 446 424 400 4% 310 310 271 253 210 228 200 2% 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: Moody’s default rates 1999-2008, LGIM estimates 2009-11 and BOA/ML (spreads)
    9. 9. SEPTEMBE BATH INCOME DINNER 9 R 2012Bs have generally overcompensated investors for default risk 1,600 40% Liquidity premium 1,453 1,400 Spread to compensate for default 35% 5yr forward default rate (RHS) 1,200 30% Credit spread (bps) 1,000 25% Default rate 871 800 754 707 20% 719 638 603 600 568 15% 525 443 400 331 343 334 10% 200 5% 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: Moody’s default rates 1999-2008, LGIM estimates 2009-11 and BOA/ML (spreads)
    10. 10. SEPTEMBE BATH INCOME DINNER 10 R 2012But CCCs only sometimes compensate investors for default risk 3,000 Liquidity premium 90% Spread to compensate for default 2,690 2,500 2,429 5yr forward default rate (RHS) 75% 2,248 2,013 2,000 60% Credit spread (bps) Default rate 1,524 1,500 1,410 45% 1,211 1,071 996 999 1,000 624 30% 769 790 500 15% 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Source: Moody’s default rates 1999-2008, LGIM estimates 2009-11 and BOA/ML (spreads)
    11. 11. SEPTEMBE BATH INCOME DINNER 11 R 2012This has implication for performance relative to peer group Performance of global high yield by credit quality • In a ‘risk on’ environment, 125 HY funds with CCCs should CCC BB/B outperform 120 HIT 115 Percentile Index = 100 @ 30 Sep 11 Oct 11 95 110 Nov 11 5 Dec 11 95 105 Jan 12 95 100 Feb 12 87 Mar 12 50 95 Apr 12 4 May 12 18 90 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Jun 12 38 Jul 12 90Source: Bloomberg, ML/BOA indices.
    12. 12. SEPTEMBE BATH INCOME DINNER 12 R 2012A three-step investment processLeverages LGIM’s top-down and bottom-up research Translate our macro Translate our macro Establish the risk Establish the risk Identify profitable Identify profitable forecasts into forecasts into profile of the portfolio profile of the portfolio opportunities opportunities investable themes ––the ‘barbell’ ––security selection security selection investable themes the ‘barbell’
    13. 13. SEPTEMBE BATH INCOME DINNER 13 R 20121. How much risk do we take? Translate macro Translate macroLeverage the insights of LGIM’s team of economists and asset class specialists forecasts into risk forecasts into risk on/risk off view on/risk off viewSTRATEGIC THEMES • Era of deleveraging and austerity to drag on global growth‘Roadmap’ - Recession in Europe (excl. Germany) - US slowdown/fiscal cliff - Higher nominal growth in EM + • Investors need yield • Constrained market liquidity JULY 2012 SCORECARD UK Europe US INPUTSTACTICAL Macro fundamentals -1 -1 -1POSITIONING & Sovereign credit risk -1 -2 -1 • Market volatility to persist Corporate strength (non-fins) 0 -1 0RISK AWARENESS Liquidity/sentiment (non fins) 0 0 0‘Scorecard’ Supply/demand (non-fins) +1 +1 +1 Overall -1 -3 0Source: LGIM, for illustrative purposes only
    14. 14. SEPTEMBE BATH INCOME DINNER 14 R 2012Risk positioning has evolvedAllocation by country/region 45% 9% Sep-11 Jun-12 40% 8% 1. US exposure increasing 35% 7% 2. Peripheral Europe decreasing in favour of ‘core’ 30% 6% 25% 5% 20% 4% 15% 3% 10% 2% 5% 1% 0% 0% US UK Germany Switz. France Spain China Poland Ukraine Russia S. Africa Brazil MexicoSource: LGIM. Shows allocation of L&G High Income Trust.
    15. 15. SEPTEMBE BATH INCOME DINNER 15 R 20122. Where do we take risk? Establish the risk Establish the risk profile of the fundEstablishing the risk profile of the portfolio profile of the fund – allocate to – allocate to ‘risk buckets’ ‘risk buckets’• Risk positioning evolves over the economic cycle - Increase overweight to lower risk sectors/names in a ‘risk off’ environment - Increase overweight to higher beta/riskier sectors and names in stable and ‘risk on’ environments STABLE CREDIT ENVIRONMENT RISK ON ENVIRONMENT RISK OFF CREDIT ENVIRONMENT OVERWEIGHT OVERWEIGHT OVERWEIGHT UNDERWEIGHT UNDERWEIGHT UNDERWEIGHT Low spread High spread Low spread High spread Low spread High spread names names names names names names
    16. 16. SEPTEMBE BATH INCOME DINNER 16 R 20123. How do we select securities? Identify profitable Identify profitableThe responsibilities of our credit analysts opportunities – opportunities – security selection security selection Translating a fundamental view Industry view – Range of outcomes for company/issuer to a valuation perspective in an objective manner Fundamental analysis on specific bonds with range of outcomes Default probability of specific bonds with range of outcomes
    17. 17. SEPTEMBE BATH INCOME DINNER 17 R 20123.1 Our process gives us an independent view of credit quality 2,000 bps Downside Base Upside 1,800 bps 1,600 bps 1,400 bps 1,200 bps 1,000 bps 800 bps 600 bps 400 bps Move out of ‘expensive’ names to ‘cheap’ names 200 bps with upside potential 0 bps
    18. 18. SEPTEMBE BATH INCOME DINNER 18 R 2012Our proprietary research shows higher quality holdings 60% Our positions also LGIMs view of credit quality have superior security Current credit rating protection than the 50% benchmark 40% 30% 20% 10% 0% BBB BB B CCC % sr secured bondsSource: LGIM, Bloomberg and ML/BoA as at 11 June 2012
    19. 19. SEPTEMBE BATH INCOME DINNER 19 R 2012Risk profile of emerging markets• Our EM holdings are biased to issues from Exposures by country of risk credit rating investment grade countries 16% % of Fund % of index• Minimal exposure to EM bonds with country 14% ratings below BB compared to the index 12%• We take idiosyncratic (company-specific) risk – 10% not sovereign risk 8% 6% 4% 2% 0% AAA AA A BBB BB B CCC NR
    20. 20. SEPTEMBE BATH INCOME DINNER 20 R 2012Market outlook 2,200 Forecast spread range 2,000 Base case Current spread 1,800 1,600 1,400 Spread (bps) 1,200 1,000 800 600 400 200 US BB US B Euro BB Euro B EM BB EM BSource: LGIM, BOAML. Forecasts as at 30 August 2012
    21. 21. SEPTEMBE BATH INCOME DINNER 21R 2012Summary • A higher quality high yield fund • Searching for opportunities around the globe • Managed by an experienced team
    22. 22. SEPTEMBER 2012 CITYWIRE NORTHERN RETREAT APPENDICES HIGH YIELD BONDS & L&G HIGH INCOME TRUST150811_AFI_CC
    23. 23. SEPTEMBE BATH INCOME DINNER 23 R 2012BiographiesMartin Reeves – Head of High YieldMartin joined LGIM in September 2011 from AllianceBernstein, where he worked for thirteen years. At his previous employerhe ran the global credit research team and was part of the group that set the credit strategy. He also at various times ran theEuropean fixed income business and sat on the European board. Martin was also a founding director of the European HighYield Association and sits on the AFME buy-side issues committee. Martin gained a MA from Saint Catharine’s CollegeCambridge University, where he read economics. He also qualified as a chartered accountant with Ernst & Young.Brigid Jackson – Product SpecialistBrigid joined LGIM as a Fixed Income and Multi-Asset Product Specialist in 2011 from Henderson Global Investors where shewas Investment Director, Fixed Income focusing on high alpha credit strategies. Prior to this, Brigid spent 10 years at BarclaysGlobal Investors/Blackrock as a Client Relationship Manager and latterly, a Fixed Income Strategist. She began her careerwith J.P. Morgan Investment Management in 1996. Brigid holds a BA in Economics from University of Otago, New Zealand.
    24. 24. SEPTEMBE BATH INCOME DINNER 24 R 2012LGIM’s active fixed income teamA combination of top down and bottom up insights Head of Fixed Income Roger Bartley Head of Head of Global Head of Head of Head of Global Head of US Money Markets Rates Portfolio Mgmt. Asset Allocation High Yield Fixed Income Group Jennifer Nicholas David North Martin Reeves John Bender Gillespie Griffiths Kevin Chessum Fund Fund Investment Credit Research Fund Fund Management US Credit Management Management Strategy A.Hooper-Greenhill Management Research Anuradha Goyal Simon Bell James Carrick Frederic Jourdren Rajib Alam Tim Bacik Brian Beargie John Wherton Dan King Brian Coulton Stanley Martinez Julia Burnell Jeff Coil Jose Almonte Tim Drayson Michael Rolnick Sophia Henderson Jeff Koch Garland Buchanan Hetal Mehta John Ryan Kim Hill David Nirtaut David Knutson Asset allocation Sarah Renshaw Joe Tomczak Ben Gill Fund management Michael Jouravlev Peter Schuld Thomas Nevill Global Credit European UK Investment High Alpha UK Investment Credit Strategy Pan-European Credit Research Investment Grade Grade Fixed Income Grade (Retail) Anton Eser Patrick Vogel R. Barnard-Smith Richard Hodges Michel Canoy Ben Bennett Georg Grodzki Tony Fan Matthew Rees Colin Reedie Ben Bugg Ben Bugg Gabriela Budeanu David Carton Dan Lustig Julien Houdain Lan Wu Ian Hutchinson Sophia Johnston Neil Newbery Jean Lee Gavin Kendrick Jeremy Tisdall Tomislav Pavlic Robert KendrickAs at 31 August 2012
    25. 25. SEPTEMBE BATH INCOME DINNER 25 R 2012Our funds are managed against a conservative high yield indexHY indices – risk/returns over last 10 years 11.5% 11.0% BarCap Global HY Euro HY 10.5% Euro HY BB-B ML Global HY Return (ann.) 10.0% Global HY ex fins US HY 9.5% ML Global HY BB-B Our HY index US HY BB- 9.0% HIT benchmark (inc 5% cash) B 8.5% 8.0% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% Standard deviation (ann.)Source: Bloomberg, ML/BOA, Barclays Capital. HIT benchmark is 95% Global High Yield BB- B Rated 2% Constrained Ex-Financial (GBP Hedged) 5% British Pound LIBID Overnight, lagged one day .
    26. 26. Income distributed (% of fund value) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% R 2012 4Q 2001 1Q 2002 SEPTEMBE 2Q 2002 3Q 2002 4Q 2002 1Q 2003 2Q 2003 3Q 2003 4Q 2003 1Q 2004 2Q 2004 3Q 2004 4Q 2004 1Q 2005 2Q 2005 3Q 2005 4Q 2005 1Q 2006 2Q 2006 3Q 2006 ← Average 5.83% p.a. BATH INCOME DINNER 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 Income distribution - rolling 12 mo 2Q 2008 High yield has delivered attractive income …Source: LGIM. Quarterly distributions from 30 Nov 2000 to 30 April 2012 for L&G High Income Trust ‘R’ share class, net of fees. 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 26
    27. 27. SEPTEMBE BATH INCOME DINNER 27 R 2012… and returns compare favourably to equities and government bonds 220 UK equities 200 206 UK government bonds High Income Trust (net of fees) 192 180 30 Nov 2000 = 100 160 140 145 120 100 80 60 40 Nov-00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11Source: LGIM, Bloomberg, Thomson.Monthly returns from 30 Nov 2000 to 31 Jul 2012 for BOA/ML UK Gilts Index, FTSE All Share Index (with dividends reinvested) and L&G High Income Trust ‘R’ share class, net of fees.
    28. 28. SEPTEMBE BATH INCOME DINNER 28 R 2012High yield is a good diversifierCorrelations of BB/B rated non-financial corporate bonds to other asset classes 0.30 Last 5 years Last 10 years 0.25 Last 15 years 0.20 0.15 Correlation 0.10 0.05 0.00 -0.05 -0.10 -0.15 Investment grade corporates Government bonds EquitiesSource: LGIM, Bloomberg. Analysis uses daily returns to 18 May 2012 for BOA/ML US Non-Financial Corporates A Rated Index, BOA/ML 5Y US Treasury Index and S&P500 Index versusUS High Yield BB & B Rated Non Financials Index.
    29. 29. SEPTEMBE BATH INCOME DINNER 29 R 2012Top 10 countries HIT BENCHMARK Nation Holding Nation Holding US 44% US 60% UK 8% Germany 4% Germany 7% Canada 3% (<1% in fund) Russia 3% UK 3% South Africa 3% (<1% in index) France 3% (<1% in fund) Brazil 3% Italy 2% (<1% in fund) China 3% China 2% Switzerland 2% (<1% in index) Venezuela 2% (<1% in fund) Mexico 2% Brazil 2% Poland 2% (<1% in index) Netherlands 1%Source: LGIM to 31 July 2012. HIT benchmark is ML/BoA Global High Yield BB- B Rated 2% Constrained Ex-Financial (GBP Hedged) with 5% in Cash
    30. 30. SEPTEMBE BATH INCOME DINNER 30 R 2012Top 10 industries HIT BENCHMARK Industry Holding Industry Holding Telcos 13% Energy/E&P 12% Energy/E&P 9% Telcos 11% Cable/Sat TV 9% Utilities 8% Food/Drink 6% Homebuilders/materials 8% Transportation 6% Healthcare 7% Gaming 5% Automotive/parts 5% Healthcare 5% Services 5% Automotive/parts 5% 4% Homebuilders/materials 5% Paper/Forest/Packaging 3%Source: LGIM to 31 July 2012 Utilities 4% Heavy Industrials 3%
    31. 31. SEPTEMBE BATH INCOME DINNER 31 R 2012Evolution of industry holdings – HIT Sep-11 Dec-11 Mar-12 Jun-12 Issuer Holding Issuer Holding Issuer Holding Issuer Holding Transportation 9% Cable / Sat TV 10% Telecommunications 12% Telecommunications 13% Cable / Sat TV 8% Food / Drink 10% Cable / Sat TV 9% Energy/E&P 9% Food/Drink 8% Telecommunications 8% Energy / E&P 9% Cable/Sat TV 9% Healthcare 7% Transportation 7% Food / Drink 7% Food/Drink 6% Telecommunications 7% Healthcare 7% Transportation 7% Transportation 6% Gaming 6% Utilities 6% Automotive / parts 6% Gaming 5% Utilities 6% Energy/E&P 5% Gaming 5% Healthcare 5% Homebuilders / 5% Gaming 5% Healthcare 5% Automotive/parts 5% materials Homebuilders / Homebuilders / Automotive/parts 5% 5% 5% Homebuilders/materials 5% materials materials Mining 5% Automotive / parts 4% Utilities 5% Utilities 4%Source: LGIM to 31 July 2012
    32. 32. SEPTEMBE BATH INCOME DINNER 32 R 2012Evolution of country holdings – HIT Sep-11 Dec-11 Mar-12 Jun-12 Issuer Holding Issuer Holding Issuer Holding Issuer Holding US 39% US 40% US 41% US 44% UK 7% UK 8% UK 8% UK 8% Germany 5% Germany 5% Germany 7% Germany 7% Poland 4% Poland 5% Switzerland 4% Russia 3% China 4% China 4% Brazil 4% South Africa 3% Spain 4% Brazil 3% Poland 3% Brazil 3% Brazil 3% Russia 3% South Africa 3% China 3% South Africa 2% South Africa 3% China 3% Switzerland 3% France 2% France 2% Russia 3% Mexico 2% Ukraine 2% Ukraine 2% Mexico 3% Poland 2%Source: LGIM to 31 July 2012
    33. 33. SEPTEMBE BATH INCOME DINNER 33 R 2012Ratings breakdown – HIT Fund Fund Fund Fund Fund Index Rating Sep-11 Dec-11 Mar-12 Jun-12 Jul-12 Jul-12 Cash 12% 11% 5% 10% 6% 5% >BB 0% 5% 8% 8% 7% 0% BB 41% 37% 42% 39% 47% 51% B 47% 46% 44% 40% 38% 44% <B 0% 0% 1% 3% 1% 0% NR 0% 0% 0% 0% 0% 0% TOTAL 100% 100% 100% 100% 100% 100%Source: LGIM to 31 July 2012. HIT benchmark is ML/BoA Global High Yield BB- B Rated 2% Constrained Ex-Financial (GBP Hedged) with 5% in Cash
    34. 34. SEPTEMBE BATH INCOME DINNER 34 R 2012Top 10 issuers HIT BENCHMARK Issuer Holding Issuer Holding Unitymedia Gmbh 2.72% Nextel Communications 1.80% Host Hotels & Resorts Lp 2.02% Petroleos De Venezuela 1.67% Aes Corporation 1.94% Hca Inc 1.62% Intelsat Jackson Hldg 1.93% Lafarge Sa 1.25% Ziggo Bond Co 1.84% Century Tel Entp 1.04% Inversiones Alsacia Sa 1.76% Dish Dbs Corp 0.96% Virgin Media Finance Plc 1.74% El Paso Corp 0.86% Marina District Finance 1.67% Mgm Mirage 0.86% Wyndham Worldwide 1.67% Fiat Finance Na 0.84% Cb Richard Ellis Service 1.63% Cco Holdings Llc 0.79%Source: LGIM to 31 July 2012
    35. 35. SEPTEMBE BATH INCOME DINNER 35 R 2012Portfolio characteristics HIT BENCHMARK Yield to worst 6.13% 6.17% Option adjusted spread 547 546 Duration 3.7 3.5 Average bond price 104.7 104.1 Average maturity (years) 7.0 6.7 Number of issuers 117 1,031 Number of issues 154 2,086 % with security 37% 0%Source: LGIM to 31 July 2012. HIT benchmark is ML/BoA Global High Yield BB- B Rated 2% Constrained Ex-Financial (GBP Hedged) with 5% in Cash
    36. 36. SEPTEMBE BATH INCOME DINNER 36R 2012DisclaimerImportant InformationThis presentation, and any information it contains, has been produced for use by financial advisers only and should not be distributed without thepermission of Legal & General (Unit Trust Managers) Limited.The Legal & General is an authorised unit trust, managed by Legal & General (Unit Trust Managers) Limited, authorised and regulated by the FinancialServices Authority.The risks associated with the funds are set out in the Prospectus and these should be understood before making any investment decisions for clients.Additional information in relation to the Risk Management process is available on request. A copy of the Prospectus can be obtained from Legal &General (Unit Trust Managers) Limited.Past performance is not a guide to future performance. The value of investments and any income taken can fall as well as rise and is not guaranteed.Investors may get back less than they invest. Exchange rate changes may cause the value of any overseas investments to rise or fall. Lines are openMonday to Friday, 9am to 5pm. Call charges will vary. We may record and monitor calls.The views expressed within this document are those of Legal & General Investment Management Limited (LGIM), who may or may not have actedupon them. LGIM are the Investment Advisers to the fund.Issued by Legal & General (Unit Trust Managers) Limited. This document should not be taken as an invitation to deal in Legal & General investments orthe stated investment..
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