1. 1
Performance is calculated on I class shares, pre management fees of between 1.50% and 2.25% per annum
2
Performance inception date is 31 July 2009
3
The UBS Developed Infrastructure & Utilities Index is a USD hedged, total return index
IMPORTANT NOTES
This report has been prepared for information only, and it does not represent an offer to purchase or subscribe for shares. While Nucleus Global Investors Pty Ltd ( Nucleus ) believes that the information is correct at the date of
production, no warranty or representation is given to this effect and no liability can be assumed for the correctness or accuracy of the given information, which may be subject to change at any time, without notice. Returns can be
volatile, reflecting increases and decreases in the value of underlying investments. Changes in market conditions and exchange rates can cause a decrease or an increase in the share value. Past performance does not guarantee the same
results in the future.
The WIOF Global Listed Utilities Fund (the Fund ) is a sub fund of World Investment Opportunities Funds (the SICAV ), an open-ended investment company registered on the official list of collective investment undertakings pursuant to
part I of the Luxembourg law of 20th December 2002 on collective investment undertakings (the 2002 Law ). Julius Baer (Luxembourg) S.A is the designated management company of the SICAV, authorised under the provisions of
Chapter 13 of the 2002 Law. Applications can only be made on the form in the current WIOF Prospectus dated April 2010. Prospectus can be obtained by contacting the Nucleus investment team on
+61 2 9356 2866, by fax +61 2 9357 6640, or by emailing kteale@nucleusglobal.com.au or at http://www.wiof.eu/institutional/download/prospectus/. Before investing in the Fund, investors should contact their financial adviser and refer
to all relevant documents relating to the Fund, such as the latest annual report and prospectus, which specify the particular risks associated with the Fund, together with any specific restrictions applying, and the basis of dealing. In the
event an investor chooses not to seek advice from a financial adviser, he should consider whether the Fund is a suitable investment for him.
WIOF Global Listed Utilities Fund March 2011
Performance Summary (total return before fees) Performance 1
1 Month 3 Months 12 Months Inception 2
WIOF Global Listed Utilities Fund 0.7% 2.4% 5.5% 17.9%
Benchmark (UBS Developed Infrastructure & Utilities Index 3
) (3.1%) 1.2% 4.9% 16.3%
Sector Allocation
Semi Regulated
Utility
54%
Regulated Utility
22%
Cash
1%
Generation
11%
Toll Roads
5%
Airports
2%
Rail
2%
Communications
Infrastructure
3%
Geographic Allocation
US
46%
Europe ex UK
21%
UK
14%
Asia excl. Japan
4%
Cash
1%
Canada
6%
Japan
8%
Overview
The fund s share price increased by 2.4% over the quarter, compared to a 1.2%
increase in our benchmark index. The nuclear crisis in Japan cast a shadow over
world equity markets during March. Whilst the earthquake and tsunami caused a
huge amount of damage in their own right, equity markets were far more
concerned with the radiation emissions from the Fukushima nuclear plant. The
Nikkei fell by 4.6% over the quarter, not a bad performance considering the extent
of the damage to Japan s economy caused by the disaster. The S&P500 rose by
5.4%, the FTSE 350 was flat and continental European markets were generally
strong.
The outperformance of the fund was driven by three factors: the fund had no
holding in Tokyo Electric Power - the owner of the Fukushima plant (whose share
price fell by 78%); an underweight position in Japanese equities which we felt
were relatively expensive before the crisis; and an underweight position in utilities
with nuclear generation capacity in Europe - as we were concerned by the political
uncertainty surrounding nuclear generation in Europe and in Germany in particular.
We have never considered Tokyo Electric Power as an appropriate holding for the
fund. As we noted in our September 2010 Quarterly Report, the company has a
record of systematic concealment from Japan s nuclear authorities of safety
incidents at its reactors stretching over decades. This alone should be enough to
make any investor avoid holding any shares in the company.
The best performing stocks in the fund over the quarter were Verbund AG (an
Austrian hydro electric generator) +12.4%, American Water Works Co Inc (a US
water utility) +11.8% and Portland General Electric (a US electricity utility)
+10.7%. The worst performing stocks were Flughafen Wien AG (Vienna Airport) -
12.6%, Inmarsat (a satellite operator) -10.3% and Central Japan Railway Co
(operator of the high speed rail link between Tokyo and Osaka) -2.4%.
Portfolio Changes
During the quarter, we established positions in Verbund AG, Drax Group, Electric
Power Development Co, Okinawa Electric Power Co and Scottish & Southern
Energy. We exited positions in E.On, SES, Vopak, Centrica and Southern Co.
Company Name Country Sector
% of
Portfolio
Consolidated Edison Inc US Regulated Utility 5.0%
Sempra Energy US Semi Regulated Utility 4.7%
Vinci France Toll Roads 4.5%
Fortum OYJ Finland Generation 4.1%
GDF Suez France Semi Regulated Utility 3.8%
Top 5 Holdings
Outlook
The Fukushima plant represents about 6% of Japan s electricity generation capacity. The power shortages caused by the plant shutdown has
resulted in temporary shutdowns of a large number of factories. In addition to the lost output from the Fukushima plant, other nuclear plants
in Japan are likely to see temporary closures for safety tests. Power shortages will result in excess profits for generators with non-nuclear
capacity for many years, until the destroyed capacity is rebuilt. The Fukushima crisis will doubtless have impacts far beyond Japan. In
Germany, Chancellor Merkel has ordered the temporary closure of seven of the countries seventeen nuclear plants while a safety review takes
place. This drastic action was not enough to stop Germany s Green party scoring their best ever state election result in this quarter s Baden-
Württemberg state election, with the Greens doubling their share of the primary vote to 24%. They will now form a coalition government with
the SPD, with Green s leader Winfried Kretschmann the likely new Minister-President the first Green party member to hold such an office.
The voter backlash against nuclear power in Germany means that there is a significant risk that the temporary closure of reactors will become
permanent. This would lead to significantly higher power prices in Germany and surrounding areas for many years and probably also marks a
major turning point in public support for nuclear power in Europe and to a lesser extent the US. One thing is clear, very few approvals to
build nuclear plants will be given for many years across the Western world and older plants face the threat of closure or at the very least
increases in safety and decommissioning costs. With CO2 emitting coal fired plants also unpopular with voters, gas fired plants will comprise
the bulk of new (and replacement) capacity built, as renewables will only be able to meet a small portion of this demand in the next decade
or so. Higher gas and CO2 prices, as well as excess profits for gas fired and coal fired generators seem almost inevitable and as a
consequence we have significantly increased our exposure to companies with gas fired, coal fired and hydro electric generating capacity.