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  • Bullet Point comments are provided by Paul Nivern Performance is taken Quarterly for the chart from the CAPS book Performance Monthly are taken from the managed funds prices and CAPS provisional numbers that are sent from Performance Team N.B: This needs to be Net of Fees
  • Bullet Point comments are provided by Paul Nivern Performance is taken Quarterly for the chart from the CAPS book Performance Monthly are taken from the managed funds prices and CAPS provisional numbers that are sent from Performance Team N.B: This needs to be Net of Fees
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    1. 1. F&C Stewardship Funds 20 th May 2008 Ted Scott - Director, Head of Stewardship Funds
    2. 2. Agenda <ul><li>Introduction & Market Overview </li></ul><ul><li>Ethical Overview </li></ul><ul><li>Stewardship Funds Performance Review </li></ul><ul><li>Market Outlook </li></ul>
    3. 3. Introduction and Market Overview
    4. 4. CAF Socially Responsible Portfolio <ul><li>The CAF SR Portfolio has been specifically designed for CAF investors </li></ul><ul><li>The vehicle uses the award winning F&C Stewardship ethical fund range: </li></ul><ul><ul><li>UK Stewardship Income </li></ul></ul><ul><ul><li>UK Stewardship Growth </li></ul></ul><ul><ul><li>UK Stewardship International </li></ul></ul><ul><li>F&C manage £3.0 billion of AUM* on Stewardship principles </li></ul><ul><li>The CAF SR Portfolio provides the opportunity for charity investors to: </li></ul><ul><ul><li>align their investment policy with their ethical convictions; </li></ul></ul><ul><ul><li>tailor their investments and obtain diversification </li></ul></ul>*Source: F&C Management Limited, as at 31/03/08
    5. 5. About the manager – UK Stewardship <ul><li>Over 25 years industry experience </li></ul><ul><li>Citywire’s Equity Income Manager of 2005 </li></ul><ul><li>Shares Magazine UK Equity Income Manager of the Year 2007 </li></ul><ul><li>Impressive track record </li></ul><ul><li>Highly regarded by independent ratings agencies </li></ul><ul><li>Stewardship Income – Principle White List for 5 consecutive years </li></ul><ul><li>Manages funds rated by both Forsyth OBSR and Standard & Poor’s </li></ul>Introducing Ted Scott
    6. 6. Market Overview <ul><li>Cyclical bear market erodes 2007 gains. </li></ul><ul><li>Deteriorating US growth, the deepening credit crisis, and expectations for earnings downgrades trigger the sell – off </li></ul><ul><li>Sovereign bond prices rise as rate cuts are priced in </li></ul><ul><li>Risk appetite recently recovers from depressed levels </li></ul>Cyclical Bear Market As at 18 April 2008. Source: F&C Asset Management/ Datastream
    7. 7. Stewardship: Ethical Overview
    8. 8. F&C Stewardship Ethical Screening <ul><li>Rigorous ethical screening process </li></ul><ul><li>Decisions made by an independent Committee of Reference </li></ul><ul><li>Responsible Engagement Overlay (reo ® ) : engagement to improve company behaviour </li></ul><ul><li>Investing in companies that are positive for society and the environment </li></ul><ul><li>Avoid investing in companies that do particular harm </li></ul>Our credentials
    9. 9. F&C Ethical Screening Process Thorough and Independent Ethical Process Committee of Reference (principles) Investment Sub Committee (acceptable list) Fund Management Stewardship Funds GSI Team Research Corporate Governance Engagement
    10. 10. Independent Committee “Safeguards” Ethical Funds <ul><li>Committee of Reference oversees criteria and policies </li></ul><ul><ul><li>Reviews ethical criteria </li></ul></ul><ul><ul><li>Develops ethical policies </li></ul></ul><ul><ul><li>Meets on a quarterly basis </li></ul></ul><ul><li>Investment Sub-Committee decides which companies are acceptable </li></ul><ul><ul><li>Assesses application of the criteria </li></ul></ul><ul><ul><li>Reviews GSRI research </li></ul></ul><ul><ul><li>Makes final decisions on which companies are acceptable </li></ul></ul><ul><ul><li>Meets on quarterly basis </li></ul></ul>
    11. 11. Stewardship Funds: Performance Review
    12. 12. F&C Stewardship International Track Record Source: F&C Management Limited, as at 31/03/08, Inception date 13/10/87; Performance shown is taken from our Stewardship International OEIC, shown on a Gross of fees basis in Sterling. Performance to 31 March 2008
    13. 13. F&C Stewardship UK Income Fund Performance to 31 March 2008 Source: F&C Management Limited, as at 31/03/08, Inception date 01/01/95; Performance shown is taken from our Stewardship Income OEIC, shown on a Gross of fees basis in Sterling.
    14. 14. F&C Stewardship UK Growth Fund Performance to 31 March 2008 Source: F&C Management Limited, as at 31/03/08, Inception date 01/01/95; Performance shown is taken from our Stewardship Growth OEIC, shown on a Gross of fees basis in Sterling.
    15. 15. F&C Stewardship Fund Fears of a recession hurt small companies.. Source: DATASTREAM
    16. 16. F&C Stewardship Fund Non-ethical stocks benefit from international exposure.. Source: DATASTREAM
    17. 17. Market Outlook
    18. 18. UK Market outlook <ul><li>We are in an earnings bubble and not a PE bubble (as in 1999-2000) </li></ul><ul><li>Credit crunch has significantly raised risk to equities </li></ul><ul><li>But valuations are reasonable </li></ul><ul><li>Equities supported by attractive earnings and dividend yield </li></ul>
    19. 19. Appendices
    20. 20. Why F&C for ethically screened funds? 1832: Founding of Friends Provident – ‘Sin stocks’ excluded 1980: Friends Provident drops ethical exclusions 1984: Launch of Stewardship Unit Trust – Enhanced screening criteria 1987-99: Launch of market leading Institutional and Retail ethical funds 2000: Responsible Engagement Overlay – reo ® 2002 – 2005: 10 Awards, 15 reo® mandates The history of Stewardship Funds Over 170 years of ethical heritage 1987: Launch of Stewardship Income Unit Trust 2007: One of the largest, award winning, market leaders in ethical investments
    21. 21. <ul><li>Ted Scott </li></ul><ul><li>Director, Head of Stewardship </li></ul><ul><li>Ted graduated with an Economics degree and worked three years for a private client stockbroker before joining Friends Provident on the same day that Stewardship was launched on the 1 June 1984. He has remained on the UK Equity desk ever since and has worked exclusively on Stewardship from 1992. In between, he worked as an analyst on a range of sectors as well as managing other non-Stewardship funds. In early 1998, he was given responsibility for the Stewardship Income Fund when its strategy was changed to the current successful barbell approach. He assumed overall responsibility for all of the Stewardship Funds early in 2000. </li></ul><ul><li>Hilary Aldridge </li></ul><ul><li>Fund Manager, Stewardship Funds </li></ul><ul><li>Hilary graduated with a Law degree from Birmingham University and joined F&C in February 2001. Previously she had worked for Capel Cure Sharpe (part of Old Mutual) as a Fund Manager, specialising in Ethical Funds. She now works with Ted as part of the Stewardship team and focuses mainly on the smaller companies in the fund. </li></ul>Stewardship UK Management Team
    22. 22. <ul><li>Providing the basic necessities of life eg healthy food, housing, </li></ul><ul><li>Offering customers ethical product choices eg. fair trade, organic </li></ul><ul><li>Improving quality of life through the responsible use of new technologies  eg internet access </li></ul><ul><li>Meeting sustainable development challenges eg clean energy, low carbon technologies </li></ul><ul><li>Good environmental management  </li></ul><ul><li>Actively addressing climate change e.g. renewable energy, energy efficiency </li></ul><ul><li>Promotion and protection of human rights  </li></ul><ul><li>Good employment practices </li></ul><ul><li>Positive impact on local communities  </li></ul><ul><li>Good relations with customers and suppliers </li></ul><ul><li>Effective anti-corruption controls </li></ul><ul><li>Transparent communication . </li></ul>Stewardship Criteria - Positive
    23. 23. <ul><li>Tobacco production </li></ul><ul><li>Alcohol production </li></ul><ul><li>Gambling  </li></ul><ul><li>Pornography or violent material </li></ul><ul><li>Manufacture and sale of weapons  </li></ul><ul><li>Exploitation of animals  </li></ul><ul><li>Nuclear power generation </li></ul><ul><li>Poor environmental practices </li></ul><ul><li>Human rights abuses  </li></ul><ul><li>Poor relations with employees, customers or suppliers </li></ul>Stewardship Criteria - Negative x
    24. 24. Tony Stoller, Chair (as of January 2007) Tony has enjoyed a varied career in newspapers, broadcasting, retailing and regulation. He has run both a radio station and a department store, the latter as a Principal Director of the John Lewis Partnership.  He was Chief Executive of The Radio Authority for eight years until it was merged into the new Office of Communications, and then helped to set up the new regulator as its External Relations Director until his retirement at the end of 2005. He is a Trustee of the Joseph Rowntree Foundation and the Joseph Rowntree Housing Trust and a Governor and Director of Leighton Park School. Tony is a Quaker and was the 2001 Swarthmore Lecturer. His book Wrestling with the Angel examines the ethical position of the individual in commerce and public life. He has degrees in modern history and public law, and was awarded the CBE in 2003 for services to broadcasting. Brian Sweetland Brian, a Solicitor, is the Company Secretary of Cancer Research UK, a Trustee of the Friends Provident Charitable Foundation and a director of F&C Commercial Property Trust Limited.  Until his retirement in 2005, he was director of a number of companies including Friends Provident plc and F&C Asset Management plc.  He was the Secretary of the Friends Provident Group of Companies for over 20 years until end-2004 and drafted the original Stewardship Unit Trust prospectus in 1984. Jiggy Lloyd Jiggy was appointed to the Committee in 2006.  She is an independent consultant in public policy, corporate strategy and sustainable development. Between 1993 and 2005 she held a series of senior posts covering environmental policy and corporate social responsibility with Generale des Eaux (1993-2000), Severn Trent Plc (2000-2003) and AWG Plc (2003-2005).  Her earlier career included work with the mining industry and in local government. She is a Trustee of Transport 2000 Trust, a Vice-President of the Town and Country Planning Association and an Associate of Green Alliance. Her academic background is in ecology and planning; she is a Nuffield Scholar. Justin Welby Justin was appointed to the Board in 2007. He is Sub Dean & Canon for Reconciliation Ministry at Coventry Cathedral, working on inter faith relations, reconciliation and conflict resolution in the UK, Africa and the Middle East. He has been ordained in the Church of England since 1992, before which he worked at a senior level in the oil industry in France and the UK. He is Personal and Ethical Adviser at the UK Association of Corporate Treasurers. He has also chaired an NHS general hospital trust, and two school boards. He lectures on ethics and finance in the UK and Switzerland, and is on the Board of the International Association for Catholic Social Teaching. Committee of reference
    25. 25. Committee of reference <ul><li>Sheila Forbes, CBE   Sheila is a non executive director of Tribal Group plc and OCS Group Ltd, with a background in employment issues as a Human Resources Director.  She is also a Board member of the British Library and a Trustee of the Crafts Council. Sheila acts as independent Chair of the Nominations Committee of the National Trust.  Since 1996 she has worked as an independent consultant on issues of governance, organisation and people management. </li></ul><ul><li>Kwabena Mate   Kwabena currently lives and works at the Krishnamurti Study Centre at Brockwood Park in Hampshire.   He was called to the Ghana Bar in 1980 and has gai ned wide experience of development issues in West Africa including foreign investment, labour standards, human rights and environmental impacts, with special knowledge of the mining and mineral extraction industries.  He has experience of working with NGOs including two and-a-half years as Co-ordinator of Social Alert, a human rights NGO in Brussels.  Kwabene has been an independent consultant in these and related fields. </li></ul><ul><li>Baroness Janet Whitaker Janet is Vice-Chair of the Parliamentary Labour Party Civil Rights and International Development Committees and vice-chair of the All Party Group on Ethiopia.  She is a member of Transparency International (UK)'s Advisory Council and of the Council of the Overseas Development Institute.  Baroness Whitaker is also council member of SOS Sahel, vice-president of One World Trust, a patron of the Runnymede Trust and a member of Population Concern.  She is currently the Labour Party International Development Liaison Peer. </li></ul><ul><li>Nick Boakes  Nick is Director of Friends Provident’s group communications which includes corporate responsibility and community activities.  He trained as an accountant and subsequently directed and managed two corporate and financial public relations consultancies based in London, where he advised a broad range of international and national client companies on issues affecting their reputation. </li></ul>
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