Every cycle is differentAre investors paying too high a price for risk aversionNew Model Adviser Retreat – 13-14 September...
A typical range of UK model portfolios                           UK       UK Index Risk                   Corporate    Lin...
The methodologyExpected returns, volatilities and correlations were derived from the data series history foreach asset cla...
What is risk?● Risk is “the risk of a permanent loss of capital” – Benjamin Graham● This can be split into three sets of r...
The perfect investment?Risk free returns?                                                                                 ...
Meet the managerPage 6 | CONFIDENTIAL10353
Do bonds always diversify equity risk?Rolling 10 year correlation; 12 m % change in S&P 500 & Bond yields● In the 1960s an...
Does equity diversification reduce risk?MSCI World index sector returns● In the 2000-2003 bear market, yes. Avoiding TMT a...
Does equity diversification reduce risk?MSCI World index sector returns● But in 2008-2009, it didn’t workSource: Investec ...
The right base currency can help…MSCI AC World index returns in $ and £: 2000-2003 and 2008-2009                          ...
The rear view mirror: UK gilts3.5% War loan rose from £20 in late 1974 to £98 at the end of 2011, resulting in acompound n...
The rear view mirror: US equitiesThe 10 year rolling return on US equities turned negative in late 2008, discouraging even...
Value matters: equities                                  W ORLD-DS Mar ke t - P E R        35                     FROM 1/1...
Value matters: bondsBonds promoted as offering risk free returns are now poised to deliver return-free risk        Real* 1...
Volatility is just a coincident indicator of bear markets12 month rolling S&P volatility        35%                       ...
What happened next?Total return                                                   Rolling 18 month volatility        200  ...
What happened next – 10 year Greek bondsTotal return                                                                 Rolli...
What happens next? – 10 year US Treasuries   25.0%                                                                        ...
Buy high, sell lowUK pension fund equity holdings as % of total● Pension funds, supposedly long term investors, have reduc...
The psychology of investmentInvestor behaviour                   Market is           Good thing I                   going ...
The risk of risk aversion● Few people save enough or own sufficient assets to provide for their retirement or other  long-...
Conclusions● The characteristics of each cycle are different and subject to changing dynamics● Portfolio construction stra...
Managed Solutions from Investec                   Multi-Asset Protector Fund      Diversified Income Fund             Caut...
Our approach to multi-asset investment (1)Invest in funds with alpha!                                                     ...
Our approach to multi-asset investment (2)Invest in thematic opportunities!                                               ...
Our approach to multi-asset investment (3)Other key objectives● Timely tactical asset allocation● Search for new opportuni...
Investec Asset Management – RDR ready● A comprehensive range of Managed Solutions        − Market leading and innovative f...
Thank youwww.investecassetmanagement.com
Appendix
Investment teamPhilip Saunders – Head of Strategy               Max King – Investment ManagerMA History (Cambridge) 1980  ...
Investec Diversified Growth Fund (DGF)Objective● The Fund aims to provide investors with Real Returns of UK CPI +5%*A mode...
Diversified Growth: a modern approach to portfolio construction                                         Overall asset allo...
Current portfolio positioningDiversified Growth as at 31 July 2012                                                        ...
Investec Diversified Growth FundComparative index performance track recordAnnual performance in GBP                       ...
Investec Multi-Asset Protector Fund   “An opportunity for investors to access the market through a multi-assetportfolio ai...
Investec Multi-Asset Protector Fund (MAP)MAP Fund vs. Cautious Managed sector                       40         Investec Mu...
Investec Diversified Income Fund● Aims to provide an attractive yield through an actively managed multi-asset portfolio● M...
Investec Diversified Income FundComparative index performance track recordAnnual performance in GBP                       ...
Investec Cautious Managed Fund● Managed by IAM’s highly regarded “contrarian” team headed by Alastair Mundy● The investmen...
Investec Cautious Managed FundOutperformer and portfolio diversifier        120                                           ...
Investec Managed Growth Fund   “A ‘one-stop shop’ for the sterling based private investor seeking capitalgrowth from a div...
Managed Growth: PerformanceThe pursuit of superior investment returnsPercentage Growth Total Return, Tax UK Net, In GBP   ...
Contact detailsCharlie Wilson                                                                 Fergus McCarthySales Directo...
Important information                                                                                                GSY B...
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Investec asset management

  1. 1. Every cycle is differentAre investors paying too high a price for risk aversionNew Model Adviser Retreat – 13-14 September 2012Max King, portfolio manager and strategist
  2. 2. A typical range of UK model portfolios UK UK Index Risk Corporate Linked International International Level UK Cash Bonds Bonds Bonds UK Gilts UK Equity Equity UK Property 1 100% 0% 0% 0% 0% 0% 0% 0% 2 44% 5% 0% 5% 27% 5% 4% 10% 3 5% 20% 0% 15% 25% 10% 5% 20% 4 5% 33% 0% 0% 0% 27% 16% 19% 5 5% 22% 0% 0% 0% 29% 31% 13% 6 0% 16% 0% 0% 0% 43% 33% 8% 7 0% 8% 0% 0% 0% 50% 40% 2% 8 0% 0% 0% 0% 0% 57% 43% 0% 9 0% 0% 0% 0% 0% 30% 70% 0% 10 0% 0% 0% 0% 0% 5% 95% 0%● Rising risk levels result in asset allocation shifting from cash through bonds to UK equities, then emerging marketsSource: Investec Asset ManagementPage 2 | CONFIDENTIAL10353
  3. 3. The methodologyExpected returns, volatilities and correlations were derived from the data series history foreach asset classbut“People are habitually guided by the rear-view mirror and, for the most part, by the vistasimmediately behind them.”Warren Buffett If “past performance is of little or no value in itself as an indicator of future performance” (FSA 2001 report) how can it be an appropriate way to study risk?Page 3 | CONFIDENTIAL10353
  4. 4. What is risk?● Risk is “the risk of a permanent loss of capital” – Benjamin Graham● This can be split into three sets of risk: valuation risk, business/earnings risk and balance sheet/financing risk – James Montier● Risk is generally highest when it appears lowest and lowest when it appears highest● Risk is not constant: it varies over the cycle and in a pattern influenced by human nature and unpredictable eventsPage 4 | CONFIDENTIAL10353
  5. 5. The perfect investment?Risk free returns? Value of $100, invested in 1990 Fairf ield Sentry S&P 500 800 700 600 500 USD 400 300 200 100 0 1990 1991 1992 1992 1993 1994 1995 1995 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2008 1991 1993 1994 1996 2007 TimeSource: BloombergPage 5 | CONFIDENTIAL10353
  6. 6. Meet the managerPage 6 | CONFIDENTIAL10353
  7. 7. Do bonds always diversify equity risk?Rolling 10 year correlation; 12 m % change in S&P 500 & Bond yields● In the 1960s and the current decade, yes but in between, only in the short term● For significant periods of time, government bonds reduced the performance of multi- asset funds without significantly reducing riskSource: Absolute Strategy ResearchPage 7 | CONFIDENTIAL10353
  8. 8. Does equity diversification reduce risk?MSCI World index sector returns● In the 2000-2003 bear market, yes. Avoiding TMT and high growth stocks for lowly- valued “old-economy” stocks enabled investors to avoid the bear marketSource: Investec Asset ManagementPage 8 | CONFIDENTIAL10353
  9. 9. Does equity diversification reduce risk?MSCI World index sector returns● But in 2008-2009, it didn’t workSource: Investec Asset ManagementPage 9 | CONFIDENTIAL10353
  10. 10. The right base currency can help…MSCI AC World index returns in $ and £: 2000-2003 and 2008-2009 1/5/12 1/5/12 110 110 100 100 90 90 80 80 70 70 60 60 50 50 40 2000 2001 2002 2003 MSCI WORLD U$ - TOT RETURN IND J A S O N D J F M A M J J A S O N D J F M A M J MSCI WORLD £ - TOT RETURN IND MSCI AC WORLD U$ - TOT RETURN IND MSCI AC WORLD £ - TOT RETURN IND Source: Thomson Reuters Datastream Source: Thomson Reuters Datastream● …but only sometimes. Sterling based investors were insulated in 2008-2009 but not in 2000-2003Source: DataStreamPage 10 | CONFIDENTIAL10353
  11. 11. The rear view mirror: UK gilts3.5% War loan rose from £20 in late 1974 to £98 at the end of 2011, resulting in acompound nominal return of 22% per annum… W AR LOAN 3 1 /2% IRR . RUMP - MARKE T P RICE 100 FROM 01/01/74 T O 16/02/12 MONT HLY 90 80 70 60 50 40 30 20 10 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 Source: Thomson Reuters Datastream ● ...but it was issued at par, and the coupon was cut from 5% in 1932, when trading well above par! In real terms, the capital loss was about 96% between 1932 and late 1974Source: DataStreamPage 11 | CONFIDENTIAL10353
  12. 12. The rear view mirror: US equitiesThe 10 year rolling return on US equities turned negative in late 2008, discouraging evenlong term investors…S&P 10 year compound total return● …but bad decades have led to good decades. “Following the 13 prior periods since 1871 in which 10 year real stock returns turned negative, stocks averaged a real return of more than 10% per year over the next 10 years”Source: Legg Mason, 2010Page 12 | CONFIDENTIAL10353
  13. 13. Value matters: equities W ORLD-DS Mar ke t - P E R 35 FROM 1/1/85 T O 4/4/12 MONT HLY 30 25 20 15 10 5 85 87 89 91 93 95 97 99 01 03 05 07 09 11 Source: Thomson Reuters Datastream● Prospective p/e is 12.5 X consensus 2012 earnings and 11 X the 2013 consensus● Prospective p/e at March 2009 low was over 10 with earnings forecasts falling fast● But note that mid 2007 saw neither euphoria nor despairSource: DataStreamPage 13 | CONFIDENTIAL10353
  14. 14. Value matters: bondsBonds promoted as offering risk free returns are now poised to deliver return-free risk Real* 10 yr government bond yields 6.0 5.0 4.0 3.0 2.0 (%) 1.0 0.0 -1.0 -2.0 -3.0 2006 2007 2008 2009 2010 2011 Germany US UK● How can government bonds at historical lows and with negative real yields be an attractive investment proposition?Source: NewtonPage 14 | CONFIDENTIAL10353
  15. 15. Volatility is just a coincident indicator of bear markets12 month rolling S&P volatility 35% Bear markets 30% 25% 20% 15% 10% 5% 0% 1946 1952 1956 1961 1965 1968 1970 1974 1978 1983 1987 1992 1996 2001 2005 2011 1945 1948 1950 1954 1957 1959 1963 1967 1972 1976 1979 1981 1985 1989 1990 1994 1998 2000 2003 2007 2009● Risk aversion based solely on volatility would lead to investors avoiding equities at market lows● Volatility is the inevitable counterpart to excess returnsSource: Investec Asset Management, BloombergPage 15 | CONFIDENTIAL10353
  16. 16. What happened next?Total return Rolling 18 month volatility 200 14.00% 190 12.00% 180 170 10.00% 160 8.00% 150 6.00% 140 130 4.00% 120 2.00% 110 100 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009● January 2000 – December 2009 compound return of 5.7% with annualised volatility of 6.9%Source: Investec Asset Management, BloombergPage 16 | CONFIDENTIAL10353
  17. 17. What happened next – 10 year Greek bondsTotal return Rolling 18 month volatility 200 40.00% 180 35.00% 30.00% 160 25.00% 140 20.00% 120 15.00% 100 10.00% 80 5.00% 60 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012● January 2010 – December 2011 compound return of -41% with annualised volatility of 28.7%Source: Investec Asset Management, BloombergPage 17 | CONFIDENTIAL10353
  18. 18. What happens next? – 10 year US Treasuries 25.0% 300 12 Month Rolling Volatility Total Return 20.0% 250 15.0% 200 10.0% 150 5.0% 0% 100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012● January 2000 – April 2012 compound return of 9% with rolling 12 month volatility of 13.8%● “past performance is of little or no value in itself as an indicator of future performance”Source: Investec Asset Management, BloombergPage 18 | CONFIDENTIAL10353
  19. 19. Buy high, sell lowUK pension fund equity holdings as % of total● Pension funds, supposedly long term investors, have reduced equity holdings in favour of bonds as equities have become cheaper and bonds more expensive● Bond weightings have risen from 19% in 2000 (when equities were 72%) to 43%Source: Oriel SecuritiesPage 19 | CONFIDENTIAL10353
  20. 20. The psychology of investmentInvestor behaviour Market is Good thing I going up – didn’t wait DAMN! I’ll we need to buy again. It’s still cheap watch this I’ll use this correction to increase my position I knew this market was going up Brilliant, at this price Damn! I missed lets add some more the consolidation, but if I wait any Ouch. As longer, I won’t I don’t believe it, its soon as it The trend is profit from the below 5000. It’s hit The buyers of this holding – I’ll buy goes back trend. BUY! its absolute bottom market are going at the next up, I’m selling to get buried consolidation It’s going to tank anyway What’s going on? OK, let’s wait for it to recover – otherwise Must be this will have to be a hedge funds really long-term selling I’m selling out Good thing I Told you shorts investment so sold● Is risk assessment any different?Source: Investec Asset ManagementPage 20 | CONFIDENTIAL10353
  21. 21. The risk of risk aversion● Few people save enough or own sufficient assets to provide for their retirement or other long-term spending requirements − Investment returns are usually essential to bridge the gap● Is regret more painful than risk? − This can lead to capitulation to the bull case at precisely the wrong time● “Low risk” strategies often don’t work − How did hedge funds perform in 2008? In many cases, badly − Are government bonds really low risk?Page 21 | CONFIDENTIAL10353
  22. 22. Conclusions● The characteristics of each cycle are different and subject to changing dynamics● Portfolio construction strategies based on past experience are an exercise in preparing to re-fight the battles of the last war: they don’t work● Volatility should not be the sole basis for assessing risk● Tools for short term traders have limited relevance for long term investors● Investors are in severe danger of becoming locked into strategies which condemn them, at best, to mediocre return● “Avoidance of risk” will be a poor excuse for disappointed investors● The key to investment strategies which deliver attractive low risk returns is to be flexible, forward thinking and proactive. This has at least a chance of success whereas hindsight trading doesn’t Our solution for UK investors? Investec Managed SolutionsPage 22 | CONFIDENTIAL10353
  23. 23. Managed Solutions from Investec Multi-Asset Protector Fund Diversified Income Fund Cautious Managed Fund Diversified Growth Fund Managed Growth Fund Growth & Protection Attractive Income Growth & Income Real Returns Growth ● An actively managed multi- ● Aims to provide an ● Aims for growth & income ● Aims to provide investors ● Aims to provide capital asset fund with additional attractive, sustainable yield ● Blends equities with with a real return of CPI growth from a diversified downside protection ● Seeks the most attractive complementary assets +5%pa** over the long-term equity centric portfolio ● Aims to protect at 80% of yield opportunities across a ● Managed by renowned ● Multi-asset portfolio aiming ● Multi-asset and the highest ever share global multi-asset portfolio contrarian, Alastair Mundy to limit drawdown and unconstrained price* volatility ● Dynamic asset allocationPotential return Potential RiskSource: Investec Asset Management. For illustrative purposes only based on the risk profiles of the FundsDynamic Planner is a registered trademark of Distribution TechnologyRatings as at 31 May 2012. *Protection is not guaranteed. **This is an aim and is not guaranteedPage 23 | CONFIDENTIAL10353
  24. 24. Our approach to multi-asset investment (1)Invest in funds with alpha! 9/2/12 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FTS ALL S E HARE - PRICE INDEX B GROUP G ROYA B NK OF S L A CTL.GP . BRITIS AM H ERICAN TOB CCO A B GROUP T BP NE T X Source: Thom son Reuters Datastream● Good stock selection, as much as asset allocation, has been the key to equity performance in the UK since 2000Source: DataStreamPage 24 | CONFIDENTIAL10353
  25. 25. Our approach to multi-asset investment (2)Invest in thematic opportunities! 09/02/12 9/2/12 9/2/12 1000 450 130 900 120 400 800 110 700 350 100 600 90 300 500 80 400 250 70 300 60 200 200 50 100 150 40 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 MSCI AC WORLD U$ - P RICE INDEX MSCI AC WORLD U$ - PRICE INDEX MS AC WORLD U$ - P CI RICE INDE X MSCI EM U$ - PRICE INDEX MSCI ACWI CONS STAPLES $ - PRICE INDEX MS ACWI IT $ - PRICE INDE CI X Source: Thomson Reuters Datastream Source: Thomson Reuters Datastream Source: Thomson Reuters Datastream Emerging markets: more upside? Consumer staples: more upside? Technology: more upside? 9/2/12 14/2/12 9/2/12 1000 800 650 600 900 700 550 800 600 500 700 450 500 600 400 500 400 350 400 300 300 300 250 200 200 200 150 100 100 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MS AC WORLD U$ - P CI RICE INDEX MSCI AC WORLD U$ - PRICE INDEX MS AC WORLD U$ - P CI RICE INDEX HS C WORLD INCL. US S B MA LLE COS $ - P R . RICE INDEX HSBC GLOBAL GOLD $ - PRICE INDEX MS ACWI ENE CI RGY $ - PRICE INDEX Source: Thomson Reuters Datastream Source: Thomson Reuters Datastream Source: Thomson Reuters Datastream Smaller companies: more upside? Gold mining: Struggling badly Energy: run out of steam?Source: DataStream, 09 February 2012Page 25 | CONFIDENTIAL10353
  26. 26. Our approach to multi-asset investment (3)Other key objectives● Timely tactical asset allocation● Search for new opportunities and exercise vigilance for fading ones● Evolution of strategic asset allocation as the market cycle advances● Real diversification within as well as between Growth, Defensive & Uncorrelated categories● Control costsPage 26 | CONFIDENTIAL10353
  27. 27. Investec Asset Management – RDR ready● A comprehensive range of Managed Solutions − Market leading and innovative funds − Managed by highly experienced fund managers − Risk profiled and highly regarded● RDR friendly, clean share classesPage 27 | CONFIDENTIAL10353
  28. 28. Thank youwww.investecassetmanagement.com
  29. 29. Appendix
  30. 30. Investment teamPhilip Saunders – Head of Strategy Max King – Investment ManagerMA History (Cambridge) 1980 MA Economics (Cambridge) 1978, ACA● 31 years investment experience ● 28 years investment experience● Originally a currency and fixed income ● Qualified chartered accountant specialist ● LF Rothschild proprietary equity trading team● Founder director of Guinness Flight Global ● 1987 to 1997 director / senior investment Asset Management (acquired by Investec manager Finsbury Asset Management in 1998) ● JO Hambro director and UK investment● Led Guinness Flight’s award winning currency manager 1997 – 2003 and fixed income team from 1987 to 1995 ● Joined Investec in 2004● Established and led Investec’s multi manager activity 1999● Head of Strategy 2004Page 30 | CONFIDENTIAL10353
  31. 31. Investec Diversified Growth Fund (DGF)Objective● The Fund aims to provide investors with Real Returns of UK CPI +5%*A modern approach to multi-asset investing● Dynamic and flexible asset allocation across a diverse range of asset classes, including active, passive and alternatives● Asset classes are grouped into Growth, Defensive and Uncorrelated baskets with similar returns characteristics● The process seeks to limit volatility and client losses● Unlike MAP, no protection. More active asset allocation than Cautious Managed with a higher allocation to risk assets in growth environments, but not full risk-on, as is Managed GrowthManaged by Investment Specialists● Managed by IAM’s Multi-Asset Investment Team,● Leverages Investec’s specialist in-house investment capabilities*Over a 3 to 5 year rolling time period, gross of fees. This is an aim and is not guaranteedPage 31 | CONFIDENTIAL10353
  32. 32. Diversified Growth: a modern approach to portfolio construction Overall asset allocation and currency overlay Growth Defensive Uncorrelated • Public and private • Government bonds • Infrastructure equities • Index linked bonds • Relative value • High yield • Investment Grade debt • Multi-strategy • Property • Gold • Trend followers • Emerging markets debt • Currencies • Global Macro • Commodities 20 - 70% 20 - 75% 5 - 30% Risk overlay (Hedging, Tactical management) An integrated approachThese internal parameters are subject to change without notification necessarily to investorsPage 32 | CONFIDENTIAL10353
  33. 33. Current portfolio positioningDiversified Growth as at 31 July 2012 % of NAV % of Risk % portfolio exposureCash 21.5 0.0Defensive 20.3 22.1 100% Investment Grade 11.3 8.1 Uncorrelated Gold 1.9 4.2 90% Volatility 3.9 5.2 Absolute Return Fixed Income 3.2 4.5 80%Growth 47.7 70.4 70% Global Equities (full beta) 9.5 17.4 Global Equities (defensive) 11.2 11.5 60% Thematic Equity 17.2 29.1 Technology 0.9 1.9 50% Growth Emerging Markets 1.0 2.4 Japan 2.7 4.3 40% Healthcare 1.4 1.9 Private Equity 5.0 8.1 30% Small Cap 6.2 10.6 Commodities 1.8 4.5 20% Property 3.1 5.5 High Yield 4.9 2.4 10% DefensiveUncorrelated 10.5 7.6 Diversified Hedge Beta 5.1 3.5 0% Infrastructure 4.1 2.0 NAV RISK Timber 0.3 0.5 Catastrophe Reinsurance 1.0 1.6 100.0 100.0The portfolio may change significantly over a short period of timeSource: Investec Asset Management, Data as at 31 July 2012Page 33 | CONFIDENTIAL10353
  34. 34. Investec Diversified Growth FundComparative index performance track recordAnnual performance in GBP Cumulative performance in GBP 40.0% 40.0% 30.0% 28.5% 30.0% 26.3 20.0% 18.4% 20.0% 20.0% 17.7 12.3% 10.0% 10.0% 4.1% 5.9% 4.9% 3.2% 0.0% 0.0% 0.1% 0.0% -10.0% -5.6% -10.0% -5.6% -20.0% -20.0% -30.0% -21.8% -30.0% -25.1% -40.0% 2006 (Dec) 2007 2008 2009 2010 2011 2012 (YTD) Dec 06 Oct 07 Jul 08 May 09 Mar 10 Dec 10 Oct 11 Jul 12 Investec Diversified Growth A Inc Net Investec Diversified Growth A Inc Net Comparative index** Comparative index** Since inception 1 month 3 months YTD 1 year 3 years p.a. 5 years p.a. p.a.*Comparative index** 2.3% 0.1% 4.9% -0.7% 7.9% 1.2% 1.5%Investec Diversified Growth A Inc Net 2.4% -0.3% 5.9% -1.0% 11.2% 3.1% 3.0%Relative performance 0.1% -0.4% 1.0% -0.3% 3.2% 1.9% 1.4%Past Performance figures are not audited and should not be taken as a guide to the futureLipper, dates to 31 July 2012, NAV based, net of UK basic rate tax (inclusive of management fees but excluding any initial charge), in GBP* Since inception: 28 December 2006** Comparative index = 45% MSCI AC World NR USD, 35% BofA ML UK Gilts 1-10 Year and 20% FTSE All-SharePage 34 | CONFIDENTIAL10353
  35. 35. Investec Multi-Asset Protector Fund “An opportunity for investors to access the market through a multi-assetportfolio aiming to provide unlimited upside with the comfort of downsideprotection.” Four elements of protection:1. Multi-asset universe allows for greater diversification and potential enhanced returns for the same or less risk as an equity-only portfolio2. Active management aims to guard against market downturns and enhance the benefit of market upturns3. Dynamic allocation through a pre-defined model to the cash portfolio, seeks to ensure the Fund is less exposed to investment markets when markets are falling4. Downside protection mechanism. The Fund will invest in a derivative contract, with a single counterparty*. The Fund aims, through this contract, to provide protection against the risk of a decline in the share price below 80% of the highest price ever achieved; however, such an outcome is not guaranteed* The Fund aims to provide downside protection at 80% of the Fund’s highest ever price.Page 35 | CONFIDENTIAL10353
  36. 36. Investec Multi-Asset Protector Fund (MAP)MAP Fund vs. Cautious Managed sector 40 Investec Multi Asset Protector A Acc Net IMA Protected 35 9 August 2012 MAP IMA Money Market 37.8 30 IMA Mixed Investment 20-60% Shares Bid price 126.9 31.8 Protected price 108.9 25 26.3 Effective level Percentage Growth 86.0 20 of protection Max investment 15 70.0% level 10 9 August 2012 MAP 2 5 4.3 Bid price 100.5 1.5 0 Protected price 80.4 -5 Effective level 80.0 of protection -10 Max investment Mar-09 Jun-09 Oct-09 Feb-10 May-10 Sep-10 Jan-11 May-11 Aug-11 Dec-11 Apr-12 Jul-12 99.0% level 1246 days f rom 30 January 2009 to 31 July 2012Past performance figures are not audited and should not be taken as a guide to the future Lipper, dates to 31 July 2012, NAV based, income reinvested (inclusive of management fees but excluding any initial charge) net ofUK basic rate tax, in sterling* Launch date 30 January 2009Page 36 | CONFIDENTIAL10353
  37. 37. Investec Diversified Income Fund● Aims to provide an attractive yield through an actively managed multi-asset portfolio● Managed by highly experienced portfolio managers John Stopford and Max King, backed by a specialist Multi-Asset team● Uses the breadth and depth of Investec’s global investment capabilities across the developed and emerging world● Actively manages downside risk● RDR-ready share class and part of Investec’s Managed Solutions Range Distribution yield: 5.5%* Underlying yield: 3.9%* Attractive income from a diversified portfolio of “global best ideas”* The Distribution Yield reflects the amount that may be expected to be distributed over the 12 months beginning 1 October 2012, as a percentageof the mid-market unit price of the Fund. The Underlying Yield reflects the annualised income expected to be received by the Fund. Both are basedon a snapshot of the portfolio as at 31 August 2012, are not guaranteed, will vary over time and take no account of any preliminary charge. TheDistribution Yield is higher than the Underlying Yield because the Fund’s expenses are charged to capital. This has the effect of increasing theFund’s distribution (which may be taxable) whilst reducing its capital to an equivalent extent and may constrain future capital and income growth.Page 37 | CONFIDENTIAL10353
  38. 38. Investec Diversified Income FundComparative index performance track recordAnnual performance in GBP Cumulative performance in GBP 40.0% 34.2% 180.0% 30.1% 160.0% 164.2 30.0% 20.9% 22.0% 19.3% 17.4% 140.0% 20.0% 13.5% 16.8% 15.9% 14.5% 12.8% 120.0% 116.0 9.2% 8.5% 10.0% 5.3% 5.3% 4.7% 100.0% 0.0% 80.0% -0.3% -3.5% 60.0% -10.0% 40.0% -14.0% -20.0% 20.0% -30.0% 0.0% -29.9% -40.0% -20.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Dec 02 May 04 Sep 05 Feb 07 Jun 08 Nov 09 Mar 11 Jul 12 (YTD) Comparative index** Comparative index** FTSE All-Share TR FTSE All-Share TR Since inception 1 month 3 months YTD 1 year 3 years p.a. 5 years p.a. p.a.*Comparative index** 2.1% 2.6% 9.2% 6.3% 13.1% 8.6% 10.7%FTSE All-Share TR 1.3% -1.0% 4.7% 0.4% 11.3% 1.3% 8.4%Relative performance 0.8% 3.6% 4.5% 6.0% 1.9% 7.3% 2.3%Past Performance figures are not audited and should not be taken as a guide to the futureLipper, dates to 31 July 2012, NAV based, net of UK basic rate tax (inclusive of management fees but excluding any initial charge), in GBP*Since inception: 31 December 2002** Comparative index: 33% Equities = FTSE All Share; 33% Bonds = B of A ML European Currency Non-Financial High Yield ConstrainedGBP Hedged; 17% Emerging Markets Bonds = JPM GBI-EM; 17% Emerging Markets Bonds = EMBIG Global DiversifiedPage 38 | CONFIDENTIAL10353
  39. 39. Investec Cautious Managed Fund● Managed by IAM’s highly regarded “contrarian” team headed by Alastair Mundy● The investment approach aims to ensure the Fund is protected against as many different outcomes as possible● The portfolio is built from an equity centric platform... with complementary assets added to dampen the natural equity volatility● The Fund is happy to use cash, international equities and international bonds as well as UK equities● The Fund is currently using index-linked government bonds, Norwegian krone and gold shares to protect against the risks of high levels of inflation, currency crises and a general lack of confidence in central banks and politicians● Most recently, we have been adding significantly to Japanese equities as the market is as cheap as it has been for forty years and investor disinterest is as extreme as it has ever beenPage 39 | CONFIDENTIAL10353
  40. 40. Investec Cautious Managed FundOutperformer and portfolio diversifier 120 Sector 100 Period ranking 91.9 1 year 90/151 80 3 years 46/122 60 5 years 15/81 56.9 10 years 5/23 % 40 37.6 20 -20 -40 Aug 02 Aug 03 Aug 04 Aug 05 Aug 06 Aug 07 Aug 08 Aug 09 Aug 10 Aug 11 Investec Cautious Managed A Acc IMA Mixed Investment 20-60% Shares UK Retail Price Index FTSE All-SharePast performance figures are not audited and should not be taken as a guide to the futureSource: Lipper, dates to 31 July 2012, NAV based, income reinvested (inclusive of management fees but excluding any initialcharge) net of UK basic rate tax, in GBP. Sector rankings based on IMA Mixed Investment 20-60% SharesPage 40 | CONFIDENTIAL10353
  41. 41. Investec Managed Growth Fund “A ‘one-stop shop’ for the sterling based private investor seeking capitalgrowth from a diversified equity centric portfolio, which pursues the bestinvestment opportunities within a prudent, risk-controlled framework” ● Fund of funds (invests predominantly in open and closed end collective investment schemes) ● Objective of long term capital appreciation / total return focus ● Benchmark: FTSE APCIMs Private investor series growth (total return) ● Thematic approach: value added from asset type, geographic, sector, style and structure opportunities ● Access to many of the best investors in the market at reasonable cost ● Broad diversification by asset category and manager ● Low turnoverPage 41 | CONFIDENTIAL10353
  42. 42. Managed Growth: PerformanceThe pursuit of superior investment returnsPercentage Growth Total Return, Tax UK Net, In GBP 200 Investec Managed Growth A Acc Net (MF) % Growth TR UKN GBP 180 FTSE All-Share TR (IN) % Growth TR UKN GBP 160 IMA Flexible Investment (IN) % Growth TR UKN GBP 140 Percentage growth 127.1 120 113.1 100 80 84.7 60 40 20 0 -20 Apr-04 Oct-07 Apr-08 Oct-11 Apr-03 Oct-03 Apr-07 Apr-12 Feb-05 Feb-09 Jul-07 Jul-08 Jul-11 Jul-03 Jul-12 May-05 May-09 Jan-04 Jan-08 Jan-12 Jun-06 Jun-10 Aug-04 Nov-04 Dec-10 Dec-02 Aug-05 Dec-05 Sep-06 Dec-06 Nov-08 Aug-09 Nov-09 Sep-10 Mar-11 Mar-06 Mar-10 115 months f rom 31/12/2002 to 31/07/2012Past performance figures are not audited and should not be taken as a guide to the futureSource: Lipper, dates to 31 July 2012, NAV based, income reinvested (inclusive of management fees but excluding any initialcharge) net of UK basic rate tax, in GBPPage 42 | CONFIDENTIAL10353
  43. 43. Contact detailsCharlie Wilson Fergus McCarthySales Director Sales DirectorTel: + 44 (0) 20 7597 2184 Tel: + 44 (0) 20 7597Email: charles.wilson@investecmail.com Email: fergus.mccarthy@investecmail.comInvestec Asset Management2 Gresham StreetLondonEC2V 7QPUnited Kingdomwww.investecassetmanagement.comTelephone calls may be recorded for training and quality assurance purposes.Issued by Investec Asset Management, September 2012Page 43 | CONFIDENTIAL10353
  44. 44. Important information GSY B OEICThis communication is not for general public distribution. If you are a private investor and receive it as part of a general circulation, pleasecontact us at +44 (0)20 7597 1900. The value of this investment, and any income generated from it, will be affected by changes ininterest rates, general market conditions and other political, social and economic developments, as well as by specific matters relating tothe assets in which it invests. The Fund’s investment objective will not necessarily be achieved and investors are not certai n to makeprofits; losses may be made. Past performance should not be taken as a guide to the future. Performance would be lower had initialcharges been included and will vary between different share classes dependant upon their applicable charges. Returns to individualinvestors will vary in accordance with their personal tax status and tax domicile.All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opini ons statedare honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particularsecurity. The portfolio may change significantly over a short period of time.This communication is provided for general information only. It is not an invitation to make an investment nor does it consti tute an offer forsale. The full documentation that should be considered before making an investment, including the Prospectus and Key InvestorInformation Documents or Offering Memorandum, which set out the fund specific risks, is available from Investec Asset Management.This communication should not be distributed to private customers who are resident in countries where the Fund is not registe red for saleor in any other circumstances where its distribution is not authorised or is unlawful. Please visitwww.investecassetmanagement.com/registrations to check registrations by country. For Funds registered in Switzerland, the Prospectus,Key Investor Information Documents and Report & Accounts may be obtained free of charge from the Swiss Representative and PayingAgent, RBC Dexia Investor Services Bank S.A., Esch-sur-Alzette, Badenerstrasse 567, P.O. Box 101, CH-8066 Zurich.In the USA, this communication should only be read by institutional investors, professional financial advisers and, at their exclusivediscretion, their eligible clients, but must not be distributed to US Persons.THIS INVESTMENT IS NOT FOR SALE TO US PERSONS.Telephone calls may be recorded for training and quality assurance purposes. Issued by Investec Asset Management Limited, whi ch isauthorised and regulated by the Financial Services Authority, September 2012.Page 44 | CONFIDENTIAL10353
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