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This presentation is intended for investment professionals and must not be relied on by anyone else                       ...
02                                         /0                                            1/                               ...
Diversification of fixed portfolios changesCorrelation of Global Equities with other market sectors         90%           ...
Synergy GARS performance since inception                                           4Source: Financial Express
Global Absolute Return Strategies performance                          Global Equities**                   Cash (Euribor)*...
Quarterly Performance                                   € GARS (gross) 2i then OJ*                                       C...
Key requirements• Take a longer term view• Allow greater investment freedom• Durable diversification                      ...
Balanced blend of investment risksShare of market risk exposure    Security Selection                                     ...
How do you deal with market stress?An absolute return investor has choices ….• Avoid• Exploit• Protect                    ...
SummaryAbsolute return investing provides a better outcome for the investor because it:• Flexible• Focuses on the same obj...
Appendices
Euro GARS       Composite Report      Composite Name:                         Euro GARS      Creation Date:               ...
The information shown relates to the past. Past performance is not a guide to the future. The value of investment can go d...
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2012 Sep 28 - Jennifer Richards - Absolute Return Investing

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2012 Sep 28 - Jennifer Richards - Absolute Return Investing

  1. 1. This presentation is intended for investment professionals and must not be relied on by anyone else Absolute Return Investing Jennifer Richards Joint Head of European Business Development Tel: 01-6397722 Email: jennifer_richards@standardlife.com 28 September 2012
  2. 2. 02 /0 1/ -10% 10% 20% 30% 40% 0% 19 80 02 /0 1/ 19 82 02 /0 1/ 19 84 02 /0 1/ 19 86 02 /0 1/ 19 88 02 /0 1/ 19 90 Average returns over 5 years 02 /0 1/ 19 92 02 /0 1/ 19 94 02 /0 UK Equity (Total Return) 1/ 19 96 02 /0 1/ 19 98 Cash 02 /0 1/ 20 00 02 How reliable is equity investment? /0 1/ 20 Cash+5% 02 02 /0 1/ 20 04 02 /0 1/ 20 06 02 /0 1/ 20 08 02 /0 1/ 20 102
  3. 3. Diversification of fixed portfolios changesCorrelation of Global Equities with other market sectors 90% 2000-2007 2008-2011 80% 70% 60% 50% 40% 30% 20% 10% 0% Property Currency Commodities Corporate Emerging High Yield Basket Bonds Market Bonds BondsSource: IPD UK Monthly Property Index, All Property; Federal Reserve Trade-Weighted Exchange Value of US Dollar vs 6 Countries; Dow Jones UBS –Commodity Index; Barclays Capital Global Corporate Index, Excess Returns; Barclays Capital Emerging Markets Index, Excess Returns; Barclays CapitalUS High Yield Index, Excess Returns; Standard Life Investments, 31 December 2011 3
  4. 4. Synergy GARS performance since inception 4Source: Financial Express
  5. 5. Global Absolute Return Strategies performance Global Equities** Cash (Euribor)** Target Return € GARS (gross)* 170 165 8.3% annualised return 160 (gross performance from inception 12/06/2006 to 31/08/2012) 155 Volatility, 5.9% p.a. 150 (annualised, using monthly data from 01/07/2006 to 31/08/2012) 145 140 135 130 125 120 115 110 105 100 95 90 85 80 75 70 65 60 55 06 6 07 7 08 8 09 9 10 0 11 1 12 /0 /0 /0 /0 /1 /1 n/ n/ n/ n/ n/ n/ n/ ec ec ec ec ec ec Ju Ju Ju Ju Ju Ju Ju D D D D D DSource: Standard Life Investments, gross performance from 12/06/2006 to 31/08/2012* Source: Standard Life Investments converted € performance of £ Fund to the 28 May 2008. Irish Unit Linked Fund performance from the 29 May 2008** Source: Thomson Datastream using MSCI World €Standard Life Investments claims compliance with the Global Investment Performance Standards (GIPS®). The fund specific data presented above is supplementary informationto the Euro GARS GIPS® composite report, which is enclosed in the Appendix for your reference.Delivering lower risk performance in challenging markets 5
  6. 6. Quarterly Performance € GARS (gross) 2i then OJ* Cash (Euribor) ** Global Equities (gross) *** 15% 10% 5% 0% -5% -10% -15% -20% -25% Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12Source: Standard Life Investments, Gross performance from 12/06/2006 to 30/06/2012* Source: Standard Life Investments converted € performance of £ Fund to the 28 May 2008. Irish Unit Linked Fund performance from the 29 May 2008** Source: Thomson Datastream*** Source: Thomson Datastream using MSCI World €Standard Life Investments claims compliance with the Global Investment Performance Standards (GIPS®). The fund specific data presented above issupplementary information to the Euro GARS GIPS® composite report, which is enclosed in the Appendix for your reference. 6
  7. 7. Key requirements• Take a longer term view• Allow greater investment freedom• Durable diversification 7
  8. 8. Balanced blend of investment risksShare of market risk exposure Security Selection Market Returns Regional Equity and bond portfolios’ tracking error High Yield Credit Russian Equity Global Equity Korean Equity European Equity US Equity UK Investment Grade Credit Global Inflation-Linked Bonds European Investment Grade Credit UK Equity Relative Value Directional Relative Variance Income US Long Bond Yields (Forward Start) US Equity Technology Sector vs US Equity Long US Dollar vs Canadian Dollar Small Cap Long US Dollar vs Euro European Financials Capital Structure Mexican Government Bonds vs Euro US Equity Large vs US Equity Small Cap Long US Dollar vs Japanese Yen Hang Seng vs S&P Volatility Long Brazilian Real vs Australian Dollar UK vs European Forward-Start Duration FX Hedging China Equity vs UK Equity Volatility Long Equity Volatility European Bond Yield SteepenerSource: Standard Life Investments GARS SICAV portfolio, 30 June 2012A portfolio built to deliver stable performance in a wide variety of outcomes 8
  9. 9. How do you deal with market stress?An absolute return investor has choices ….• Avoid• Exploit• Protect 9
  10. 10. SummaryAbsolute return investing provides a better outcome for the investor because it:• Flexible• Focuses on the same objectiveAnd good funds will be• Transparent• Well managed• Competitively pricedGARS: Exceptional rewards for modest risk levels 10
  11. 11. Appendices
  12. 12. Euro GARS Composite Report Composite Name: Euro GARS Creation Date: 01/07/2006 Firm: Standard Life Investments Currency: Euro Report End Date: 31/12/2011 Report: 10 Year Report Benchmark / Sector: 6 Month Euribor / LIBOR Top Level (factset) Class Order: All stocks (0) Fees (%): 3-Yr St Dev (%) 3-Yr St Dev (%) Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 to end Dec 2010 to end Dec 2011 Composite Weighted 6.88 7.31 -4.79 19.90 11.25 4.03 7.35 5.81 Average Benchmark Weighted 1.82 4.53 4.92 1.47 1.10 1.67 0.50 0.11 Average Composite 0.00 0.00 0.00 0.00 0.00 Dispersion Composite Final 46,559,943 328,936,430 858,822,210 2,424,300,230 8,013,954,428 1,421,412,636 Market Value Total Firm Assets 73,201,000,000 82,468,000,000 93,581,500,000 113,842,300,000 189,614,094,667 186,833,068,024 122,024,801,550 142,954,990,994 153,735,844,491 147,648,352,786 Percentage of Firms 0.02 0.18 0.70 1.70 5.21 0.96 Assets Number of Funds 0 0 0 0 1 1 1 1 1 1Firm DisclosureA complete list and description of all of the firms composites are available from Standard Life Investments. The change from Process Date to Trade Date was made during 1999. No valuations are based on Settlement Date. There are nominimum asset levels set below which portfolios are not included in a composite. All performance calculations and returns have been calculated gross of management fees. All returns are presented on an all-inclusive basis and as such allcapital gains interest income and withholding taxes have been taken into account in market valuations and returns. All indices are on a gross of tax basis apart from FTSE UK indices which are net of Withholding Tax There are no Non-Fee-Paying portfolios included in any composite. The Daily True Time Weighted Rate of Return methodology has been used from 2001 apart from unitised Cash Property GARS and Myfolio products where NAV performance is used. Priorto this NAV performance was used for all products. Additional information regarding policies for calculating and reporting returns is available upon request Dispersion is calculated using high/low difference Returns and market values inIrish punts prior to 1999 are converted from punts into Euros at the fixed conversion rate Standard Life Investments The Firm consists of all fee-paying funds managed by Standard Life Investments and its Subsidiaries which includeStandard Life Investments (Mutual Funds) Limited SLTM Limited Standard Life Investments (Corporate Funds) Limited Standard Life Investments (USA) Limited and Standard Life Investments (Asia) Limited Past performance results fromStandard Life Investments Limited UK Firm and Standard Life Investments Limited Irish Firm have been linked to form the performance record of the new firm Standard Life Investments. The new firm was created on 01/01/2008 StandardLife Investments claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Standard Life Investments has been independentlyverified by Pricewaterhouse Coopers for the periods 1996 to 2011. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPSstandards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific compositepresentationComposite DisclosureDerivatives may be used to vary exposure to markets and express views on the direction of currencies interest rates sectors and securities to enhance capital return limit downside volatility and preserve capital Includes part period returnfor 2006 from 01/07 The composite includes funds that invest in a highly diversified strategy including equities bonds property and cash with a derivative overlay in options futures swaps and currency forwards to deliver a positive absolute 12return. The fund is benchmarked against 6 month EURIBOR This composite includes GBP denominated funds that are converted into EUR using 3 month EUR LIBOR and 3 month GBP LIBOR rates
  13. 13. The information shown relates to the past. Past performance is not a guide to the future. The value of investment can go down as well as up.Any data contained herein which is attributed to a third party ("Third Party Data") is the property of (a) third party supplier(s) (the “Owner”) and is licensed for use byStandard Life**. Third Party Data may not be copied or distributed. Third Party Data is provided “as is” and is not warranted to be accurate, complete or timely. To the extentpermitted by applicable law, none of the Owner, Standard Life** or any other third party (including any third party involved in providing and/or compiling Third Party Data)shall have any liability for Third Party Data or for any use made of Third Party Data. Past performance is no guarantee of future results. Neither the Owner nor any other thirdparty sponsors, endorses or promotes the fund or product to which Third Party Data relates.**Standard Life means the relevant member of the Standard Life group, being Standard Life plc together with its subsidiaries, subsidiary undertakings and associatedcompanies (whether direct or indirect) from time to time."Standard Life Investments Limited is registered in Ireland (904256) at 90 St Stephen’s Green, Dublin 2 and Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL.Standard Life Investments Limited is authorised and regulated in the UK by the Financial Services Authority.Calls may be monitored and/or recorded to protect both you and us and help with our training.www.standardlifeinvestments.com© 2012 Standard Life, images reproduced under licence 13

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