Ignis Absolute Return Government Bond FundDiversified returns from global government bonds and currencies This presentation is intended for professional clients and investment professionals only and should not be relied upon by retail investors.
Ignis Absolute Return Government Bond FundApril 13Ignis Key facts Founded in 1899Pragmatic: outcome-focused and innovative Part of the Phoenix Group AuM: €84.2bn*Talent driven: creative and passionate people who look at 140 investment professionalsthe world differentlyBuilding on our heritage: evolving to address client needs Ignis capabilities**in a changing world Fixed Real Equities Income Estate €12.9bn €65.3bn €3.6bnAligned with clients: we are co-investors Advisors Solutions (FoF/Alts) (LDI/ALM) €2.2bn €39.2bn^*Source: Ignis at 31/12/2012 (including €11.4bn of stock-lending collateral). **AuM by business unit/investment capability (31/12/2012). 1^Ignis Solutions is responsible for €39.2bn of liabilities under management.
Ignis Absolute Return Government Bond FundApril 13Ignis Fixed Income: a broad range of capabilities Direct funds under management - €65.3bn* Stable, experienced team 3% Flexible, innovative approach 29% 37% Proprietary technology and investment tools Led by Ignis CIO Chris Fellingham 3% 28% Rates Credit Stock Lending Liquidity Other*Source: Ignis at 31/12/2012. 2
Ignis Absolute Return Government Bond FundApril 13Bonds have done well, but limited potential for long-only strategies14 G10 10 year sovereign yields Germany Performance:12 Japan UK Gains have been strong and yields are10 US close to historic lows (with some divergence) 8 Outlook: 6 Correction (when it comes) will lead to 4 capital losses 2 0Source: Datastream at 29/03/2013. 3
Ignis Absolute Return Government Bond FundApril 13Ignis absolute return philosophyWe believe: It is vital to separate alpha and beta Management of downside is critical Investors’ requirements for liquidity must be matched with the instruments invested in 4
Ignis Absolute Return Government Bond FundApril 13Ignis Absolute Return Government Bond FundAn innovative fund:Designed to deliver: Performance in all market conditions Low volatility: 4-6% standard deviation* Low correlation with other asset classes Alpha not betaInvesting in: Highest quality and most liquid debt instruments (long and short exposure) Foreign currency - max 25% of total risk budget (G10 only)*The fund’s target volatility is a standard deviation level of 4-6%, it is managed with the aim of delivering stable returns regardless of market moves. 5
Ignis Absolute Return Government Bond FundApril 13Broad universe; highly liquid instrumentsInstruments traded Derivatives management at Ignis G10 sovereign bonds Derivatives excellence programme Bond futures €127bn* notional derivatives traded in 2012 Interest rate swaps Independent counterparty risk committee OTC options (on rates and currencies) Positions collateralised daily for cash or government Swaptions bonds Currency forwards (currency restricted to 25% of risk) Inflation swaps and options*Source: Ignis at 31/12/2012. 6
Ignis Absolute Return Government Bond Fund April 13 Delivering performance in challenging markets Performance*15% Ignis Absolute Ret Gov Bond EUR I2 class (10.8%) EONIA (1.0%)10% Lipper Global Absolute Return EUR Low (2.0%) 5% 0%-5% Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 1315% Volatility** Ex Ante volatility Ex Post volatility10%5%0% Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13 *Source: Lipper, NAV to NAV, gross income reinvested since launch on 31/03/2011 to 28/03/2013. EONIA is the rate that large banks use to borrow from, and lend to, one another on the overnight market. The performance data does not take account of the commissions and costs incurred on the issue and redemption of shares (including the initial charge). Performance comparisons are inappropriate due to the diverse nature of the objectives of the funds populating this sector, including differing benchmarks, risk characteristics and timeframes for delivering performance. The Euro I2 Hdgd share class is closed to new investors. The Euro I Hdgd share class was launched on 02/01/2013 and has a limited past performance. **Source: Ignis, ex post volatility daily over one month since inception to 28/03/2013 based on Euro I2 Hdgd share class. 7 Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond FundApril 13Positive skew of returns Performance (since launch): 10.78%** Histogram showing distribution of weekly returns* Average weekly return: 0.10%* 30 Information ratio: 1.43 Normal distribution at 5% 25 volatility Realised tracking error: 3.34% 20Frequency 15 37 67 10 5 0 -1.6% -1.4% -1.2% -1.0% -0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8%0.8% 1.0% 1.2% 1.4% 1.6% -1.6% -1.4% -1.2% -1.0% -0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 1.0% 1.2% 1.4% 1.6%Source: Ignis, information since inception 31/03/2011 to 28/03/2013, based on EUR I2 Hdgd share class and net of fees.*Source: Lipper, based on weekly data from01/04/2011 to 29/03/2013. **Source: Lipper, NAV to NAV, gross income reinvested since inception to 28/03/2013 based on EUR I2 Hdgd share class. 8Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond FundApril 13Lowly correlated returnsSince launch the fund has exhibited low correlation with other asset classes, and a negativecorrelation with equities: Ignis Absolute Barclays Capital Correlation, % ETFS Physical Return Govt MSCI World Citigroup WGBI Global Agg Gold 100 Bond Fund Corporate 80 Ignis Absolute Ret 100% Govt Bond Fund 60 40 MSCI World -31% 100% 20 0 Citigroup WGBI 23% -52% 100% -20 Barclays Capital -40 Global Agg -7% 9% 31% 100% -60 Corporate -80 ETFS Physical Gold -8% 10% 6% 39% 100% -100Source: Morningstar Direct, correlation of daily returns in local currency based on EUR I2 Hdgd share class since fund launch on 31/03/2011 to 28/03/2013. 9Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond Fund April 13 Strong performance in all market conditionsCitigroup G7 GBI Weekly returns of Ignis Absolute Return Government Bond Fund versus Citigroup G7 weekly returns Government Bond Index 1.5% 22% 43% 1.0% 0.5% 0.0% -0.5% -1.0% 14% 21% -1.5% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% ARGBF weekly returns Source: Ignis, Lipper; ARGBF data based on EUR I2 Hdgd share class net, Citigroup G7 data shown in local currency; all information based on weekly data from 01/04/2011 to 10 29/03/2013. Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond Fund April 13 Ignis rates team: complementary skill set CIO Chris Fellingham (27) Manages €24.4bn* Head of Rates Specialises in government bonds Russ Oxley (15) and currencies Multi-specialist structure provides Product combination of perspectives Macro Portfolio Liquidity, Repo and Quant Team Economics Management Specialists Collateral Management Team includes chief economistAdam Purzitsky (8) Stuart Thomson Paul Shanta (4) Helen Farrow (26) Brian Jack (12) Josh Heming (14) (28) Ross Crawford (12) Joanna Howley (15) Colin Goymer (20) Stuart Thomson Jin Wong (6) Aaron Rock (7) *Source: Ignis at 31/12/2012 (Figures in brackets are number of years of investment experience) 11
Ignis Absolute Return Government Bond FundApril 13Ignis rates team: complementary skill set Idea generation Opportunity set Stuart Thomson Inflation Macroeconomic Ross strategy Crawford Paul Shanta Paul Adam Shanta Purzitsky Volatility Russ Nominal Russ Oxley Jin Oxley Wong Adam Stuart Market Quantitative Purzitsky Thomson timing Ross research Crawford FX Jin Wong Josh Aaron Rock Heming Aaron Rock 12
Ignis Absolute Return Government Bond FundApril 13Investment process Express each key Analysis of view through Monitor Portfolio Allocate risk to Identify key forward curves multiple intraday 5 key themes key themes macro- in clearcurve to positions to P&L and expressed depending on economic find optimal increase dynamically through 15- short term themes expression of diversification hedge as 20 different conviction view and reduce needed positions idiosyncratic risk 13
Ignis Absolute Return Government Bond FundApril 13The benefits of ClearCurveOur proprietary ClearCurve system: Breaks average yields into individual one year forward rates: - magnifies opportunities unseen by most - ensures optimal portfolio positioning Shows profit/loss the position would have made historically: - helps size positions according to clients’ risk budget Translates desired forward rate exposure into tradable investmentsSource: Ignis, ClearCurve; all data for illustrative purposes only 14
Ignis Absolute Return Government Bond FundApril 13ClearCurve: a key proprietary toolDeconstructing the forward rate curve 5.0 German forward rate curve Forward - 04/01/2012 Forward - 30/04/2012 4.0 3.0 2.0 % 1.0 0.0 -1.0 1Y0Y 1Y2Y 1Y4Y 1Y6Y 1Y8Y 1Y10Y Global competition for capital/global macro 1Y12Y 1Y14Y 1Y16Y 1Y18Y 1Y20Y 1Y22Y 1Y24Y 1Y26Y 1Y28Y 1.0 Expectation Dominated by changes in domestic of base rates structural supply and demand/regulation 0.5 0.0 % -0.5 -1.0 1y0y 1y2y 1y4y 1y6y 1y8y 1y10y 1y12y 1y14y 1y16y 1y18y 1y20y 1y22y 1y24y 1y26y 1y28ySource: ClearCurve, all data for illustrative purposes only 15
Ignis Absolute Return Government Bond FundApril 13Implementing views using ClearCurve German Forward Curve 1 year forward versus average yields Potential positions 5 Carry: 4 Long 1y4y fwd Average 20y DBR yield - Long 5yr bund, short 4yr bund October 2011: 3.09% 3 Relative value Directional: Directional opportunity opportunity Long 1y9y fwd 2 - Long 10yr bund, short 9y bund Carry 1 opportunity Relative value: Long 1y14y and 1y19y 0 short 1y16y and 1y17y - Long 15yr, 16yr and 20yr bund, short 14yr, 18yr and 19yr bundSource: ClearCurve, all data for illustrative purposes only 16
Ignis Absolute Return Government Bond Fund April 13 ClearCurve: insight from forward rates Operation Twist in September 2011 caused long-dated spot …our forward analysis enabled us to anticipate which rates would fall rates to fall slightly while short-dated rates rose… most, allowing us to implement positions precisely to capture value Nominal spot rates (US) Nominal forward rates (US)5% 1.0% 5.0% 1.0%4% 0.8% 4.0% 0.8%3% 0.6% 3.0% 0.6%2% 0.4% 2.0% 0.4%1% 0.2% 1.0% 0.2%0% 0.0% 0.0% 0.0%-1% -0.2% -1.0% -0.2%-2% -0.4% -2.0% -0.4%-3% -0.6% -3.0% -0.6%-4% -0.8% -4.0% -0.8% 0y 5y 10y 15y 20y 25y 0y 5y 10y 15y 20y 25y Change (%, RHS) 20/09/2011 30/09/2011 Change (%, RHS) 20/09/2011 30/09/2011 Source: Ignis, ClearCurve; all data for illustrative purposes only 17
Ignis Absolute Return Government Bond FundApril 13Diversification by design: the Arc of Alpha <2 years 2-15 Seven uncorrelated sources of alpha in our universe years > 15 Allows macro themes to be implemented in multiple ways years FX Reduces idiosyncratic risk Inflation Result: efficient portfolio with better risk adjusted returns Asset Swaps Volatility strategies 18
Ignis Absolute Return Government Bond Fund April 13 Using diversification to control risk Risk taken by independent risk buckets Risk mitigated by diversification 26 26 22.6 22 22 18Ex-ante tracking error % Ex-ante tracking error % 18 14 14 10 5.9 10 6 3.2 5.6 1.9 2.0 3.0 3.0 2.4 6 2 2 -2 -2 -6 -6 -10 -10 -14 -14 -17.0 -18 -18 -22 -22 Source: UBS Delta, data at 28/03/2013. The fund takes risks by implementing different strategies. If each strategy was well correlated, the total risk of the fund would 19 be a sum of the parts. In fact, the strategies are lowly correlated. This creates a diversification benefit, reducing the fund’s total volatility.
Ignis Absolute Return Government Bond FundApril 13Risk management at core of process 10% Volatility**Portfolio risk is controlled and managed through: 9% Ex ante volatility 8% Front, Barclays POINT, and ClearCurve 7% Ex post volatility 6% Fund manager parameters and oversight: 5% 4% - Target volatility range: 4-6% standard deviation 3% - Average monthly VaR of 3.1%* since inception 2% 1% Ex post volatility historically lower than ex ante due to 0% dynamic hedging Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13*VaR at 99% confidence level, source Ignis at 28/03/2013. **Source: Ignis at 28/03/2013. Ex post volatility daily over one month since launch based on EUR I2 Hdgd 20share class. Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond FundApril 13Performance driven by a range of strategies Contribution by strategy: cumulative since launch 500 451 450 400 350 325 300Bps 250 200 165 150 93 100 71 58 50 5 0 Rates < 2y Rates 2-15y Rates 15y+ Asset Swap Global Inflation FX: Active VolatilitySource: Ignis, internal trading systems, indicative only, base currency, data since launch on 31/03/2011 to 28/02/2013. The fund generates performance by implementingdifferent strategies. 21Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise and is not guaranteed.
Ignis Absolute Return Government Bond FundApril 13Positioning at end March 2013Theme: US and UK growth to accelerate Theme: China in growth recession Short US and UK front-dated forwards Short US 5y inflation Volatility Short volatility in long-dated rates Long US ultra-long forwards strategies Long volatility in short-dated ratesTheme: Crisis, Response, Anticipation, Theme: political and regulatory change Improvement, Complacency Short yen vs USD and GBP Short euro vs GBP Short inflation in UK Short French 5y5y inflation Long UK gilts versus swaps Long German short-dated real yields 22
Ignis Absolute Return Government Bond FundApril 13What sets us apart?List header one List header two List header three List header four Alpha not beta Diversified skill set Innovative approach Designed to deliver High level of experience in ClearCurve – developed performance in all market both long and short by Ignis in 2005 conditions investing Unique in extracting Non-directional (although Chief economist part of forward rates from core views taken) team government bonds Lowly correlated to credit, Risk management Provides a more accurate gilts, gold and equities embedded within process view of the path of interest rates Manager not constrained Team have dedicated by any particular biases quant specialists 23
Ignis Absolute Return Government Bond FundApril 13Fund profileFund manager Russ Oxley (lead manager), Stuart Thomson, Adam Purzitsky and Paul Shanta (co managers)Launch date 31 March 2011Sector Lipper Absolute Return Euro LowStructure UCITS IV SICAVDomiciled LuxembourgBenchmark EONIA^Liquidity Daily dealingMinimum investment EUR A Class: €1,000 EUR I Class: €1,000,000Annual management fee EUR A Class: 1% EUR I Class: 0.5%Performance fee* Fund manager is entitled to 10% of performance generated above EONIA^ with a high water markRegistered for sale: Luxembourg, UK, Spain, Germany, Austria, France, Italy, Sweden, Switzerland, Finland, Belgium and the Netherlands^This is the rate that large banks use to borrow from, and lend to, one another on the overnight market. In Europe this is EONIA (Euro Over Night Index Average). 24*Performance fee is net of fees, over compounded cash rates and subject to a high water mark.
Ignis Absolute Return Government Bond FundApril 13Contact us Your main contact Your regional support Roger de Passe Christina Kniep Regional Director - Benelux Sales Support Executive Mob: +32 (0) 470 99 16 68 Tel: +44 (0)20 3003 3124 Email: firstname.lastname@example.org Email: email@example.com Philip Goldsmith Dee Clarkin Managing Director Europe European Sales Support Manager Mob: +41 (0)79 753 35 74 / +44 (0)7836 243 999 Tel: +44 (0)20 3003 3127 Email: firstname.lastname@example.org Email: email@example.comTelephone calls may be monitored and/or recorded for the purpose of security, internal training, accurate account operation, internal customer monitoring and to 25improve the quality of service.
Ignis Absolute Return Government Bond FundApril 13DisclosureThis information is intended for professional clients and investment professionals only and should not be relied upon by retail investors.The opinions expressed here represent the views of the fund manager at the time of preparation and should not be interpreted as investment advice.Distribution of this document and the offering of shares in certain jurisdictions may be restricted by law and accordingly persons into whose possession this documentcomes are required to inform themselves about and to observe such restrictions. This document does not constitute an offer or solicitation to anyone in any jurisdiction inwhich such an offer is not authorised or to any person to whom it is unlawful to make such offer or solicitation.Further detailed information regarding the Fund, its Prospectus, its Key Investor Information Document (KIID), its latest annual reports and any subsequent half-yearlyreports (including information on how to switch, buy and sell units of the Fund and other unit classes available), is available free of charge from Ignis Investment ServicesLtd. You can also obtain these documents through our website www.ignisasset.com/international.Past performance is not a guide to future performance.The fund takes long and short positions based on the fund manager’s views of the market direction. This means the fund’s performance is unlikely to track theperformance of broader bond and equity markets. While this creates the opportunity for the fund to deliver positive returns in falling markets, it also means that the fundcould deliver negative returns in rising markets. The value of investments and any income from them can fall as well as rise and is not guaranteed. Exchange ratemovements may cause the value of investments to fluctuate. Please note the Euro I2 share class is closed to new investors.The fund is a sub fund of Ignis Global Funds SICAV, an investment company organised under the laws of the Grand Duchy of Luxembourg as a Self Managed SICAV. Theinvestment company has its registered office at Vertigo-Polaris, 2-4 Eugene Ruppert, L-2453 Luxembourg, and is authorised and regulated by the Commission deSurveillance du Secteur Financier (CSSF) in Luxembourg.The sub fund is currently registered for public distribution in the following countries: Luxembourg, UK, Spain, Germany, Austria, France, Netherlands, Belgium, Sweden,Switzerland, Finland and Italy. Copies of all relevant scheme documentation can be obtained free of charge from the locally appointed paying agents. Austrian PayingAgent: Unicredit Bank Austria, 8398 Global Securities Sales & Services, P.O. Box 35, A-1011 Vienna; Belgium Paying Agent: Fastnet Belgium SA, B-1000 Brussels, Avenue dePort 86C, b320; French Paying Agent: Société Générale SA, 29 Boulevard Haussmann, F-75009 Paris; German Information Agent: Société Générale SA, Neue MainzerStraße46-50, D-60311 Frankfurt / Main; Italian Paying Agent: RBC Dexia, via Vittor Pisano 26, 20124 Milan; Luxembourg Paying Agent: Société Générale, 11 Avenue Emile Reuter,L-2420 Luxembourg; Netherlands Paying Agent: ING Bank NV, Van Heenvlietlaan 220, Location Code BV.06.01, NL-1083 CN Amsterdam; Spanish Paying Agent: RBC DexiaInvestor Services España SA, calle Fernando El Santo no20, Madrid 28010; Swedish Paying Agent: SEB Merchant Banking, Sergels Torg 2, SE-106 40 Stockholm; Swiss PayingAgent: NPB Neue Privat Bank AG, Limmatquai 1, P.O. Box, CH-8022 Zurich.This document has been issued by Ignis Investment Services on behalf of Ignis Global Funds SICAV. Ignis Investment Services is registered in Scotland Number SC101825.Registered Office: 50 Bothwell Street, Glasgow G2 6HR. Authorised and regulated by the Financial Conduct Authority. 26