Issuu on Google+

April 2013

Perspective WELCOME

| MACRO OUTLOOK

| INNOVATION

| INDIA

| NEWS

| PERFORMANCE

A record quarter

Look to the future

Data mining

Visible progress

Latest news

Our latest fund performance figures

Ashburton’s Managing Director, Peter Bourne, sums up the quarter.

Assessing broad asset class returns for the next five years.

Where the smart money is looking for growth.

The dynamics of infrastructure and logisitcs.

Swimarathon, investment briefings and Sunset Concerts.

As at 31 March 2013.

The great rotation Equities are back in favour, but will the run continue? We consider the outlook for future returns and where we see potential for long-term growth. www.ashburton.com A member of the FirstRand Group


Contents Welcome Ashburton’s Managing Director, Peter Bourne, looks back on a quarter filled with records and surprises.

Contributors

03

Macro Outlook Look to the future By Tristan Hanson

04

We assess broad asset class returns for the next five years in light of record highs in some equity markets.

Innovation The smart phone evolution By Jonathan Aldrich-Blake

06

As demand from consumers continues, we consider where the investable opportunities lie within the smart phone market.

India moving forward By Simon Finch Simon reports on the improvements he witnessed to infrastructure and logistics during a recent trip to India.

08

News Ashburton staff take the plunge for charity, East meets West at our Jersey investment briefings and diary dates for this year’s Sunset Concerts.

10

Performance Our latest fund performance figures as at 31 March 2013.

11

Contacts Details for our contacts in Jersey, South Africa and the UK.

12

Tristan Hanson Tristan Hanson is Ashburton’s Head of Asset Allocation and has responsibility for Multi Asset strategy and related research. Tristan joined Ashburton in 2008 and has 11 years experience in the investment industry. He holds a Masters in Public Administration in International Development (MPA/ID) from Harvard University’s Kennedy School of Government and the Securities Institute Diploma.

Jonathan Aldrich-Blake Jonathan Aldrich-Blake is an Investment Manager in the Global Equities team. He focuses on the research of Ashburton’s thematic and bottom-up equity views as well as related idea generation for global equities. Jonathan joined Ashburton in 2005. He holds the Investment Management Certificate (IMC), the Securities Institute Diploma, and is a Chartered Fellow of the Chartered Institute for Securities and Investments.

Simon Finch Simon Finch is the Assistant Investment Manager for the Chindia Equity Fund. Simon joined Ashburton in 2007 and has 11 years experience in the finance industry. Simon qualified as a Chartered Accountant in 2004 and holds the IMC designation as well as a BA (Hons) in Finance from the Nottingham Business School.


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

| 2 | 3 |

Welcome

Records and surprises By contrast, equity markets have been considerably warmer. The FTSE approached all-time highs in early March with the Dow and Standard & Poor’s 500 following suit in early April. Indeed equity markets have been enjoying something of a stellar rise for the best part of 12 months now. Many regard this as evidence of what’s termed a Great Rotation: a pattern of investment behaviour favouring equities over bonds, and an indication of long-term growth in the equities market, particularly in the US. And, while it’s true to say that stocks and shares are attracting increasing amounts of money, it may be equally plausible that this could be a sign that the markets could soon pause after what’s been a pretty good run.

2013 has already proved to be full of records and surprises: some good, some not so good. Here in Jersey we’ve been enduring some of the coldest and wettest weather on record; Easter was the coldest since records began in 1894 and between 11th and 12th March, we had an almost unprecedented 33 hours of continuous snowfall. Testing times for everyone, not least the Jersey tourist board whose slogan ‘The Warmest Place in the British Isles’ might require a significant meteorological change to ring true.

“...equity markets have been enjoying something of a stellar rise for the best part of 12 months now. Many regard this as evidence of what’s termed a Great Rotation: a pattern of investment behaviour favouring equities over bonds, and an indication of long-term growth in the equities market, particularly in the US.” These are broad brush strokes and as ever there are conflicting views amongst analysts, so the need to dig deeper and look beyond the headlines is essential. Jonathan Aldrich-Blake, Investment Manager for Global Equities, has been doing just this in the mobile telecoms market. While the headlines tend to be all about smart phones, Jonathan reveals that in terms of the opportunity, both the devil and the detail lie in the data.

A recent visit to India by Simon Finch, Assistant Investment Manager on our Asia team, revealed that while political elections are making the headlines, improvements in logistics and cold storage facilities are unlocking the potential of this enormous market. In removing political and legislative barriers the government are embracing and facilitating change. As I mentioned in my foreword in the January edition of Perspective, there are changes afoot at Ashburton too. Ashburton International will now play a central role within Ashburton Investments, our parent company FirstRand Group’s “new generation” investment management business. This restructure will effectively bring together all the existing asset management capabilities within the Group under the Ashburton Investments brand. The business will focus on providing global investors with traditional and alternative investment solutions. We are also adding to our global capabilities by launching a UCITS platform domiciled in Luxembourg. This will provide investors with access to a series of exciting new funds via a best of breed and globally recognised platform. You can expect to hear a lot more about this new development in the coming months. So as we move into the second quarter it’s going to be fascinating to see what the future holds. Whether the markets continue to rise remains to be seen, but careful analysis, research and intelligent selection within multi asset funds continues to provide resilient protection in a low interest rate environment. And, as we edge closer to summer here in the northern hemisphere, let’s hope that protecting ourselves against the elements becomes a little less challenging, and the Jersey tourist board’s mantra bears closer scrutiny.

Peter Bourne Managing Director


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

On 5th March 2013 the most totemic stock market index of all, the Dow Jones Industrial Average, hit a record high by closing at 14,253 - surpassing the previous record in October 2007 of 14,164. From its lowest point following the 2008/09 financial crisis, the index had returned 143% including dividends over four years (source: Bloomberg).

Look to

the future

With a new-found enthusiasm for equities among many investors, other markets have enjoyed similar rallies - major indices in Germany, India, Indonesia, Mexico, South Africa and the UK have all recently registered or are approaching record highs1. Of course, some large markets remain a long way from all-time highs including much of Europe, Japan and China. But before either cracking open the champagne in celebration or shedding a tear at having missed the boat, it is worth assessing the real significance of these figures other than as a clear indication that these markets have performed well in recent years. First, we should look at performance in inflation-adjusted terms (‘real’ not ‘nominal’), or in hard currency terms if the local currency has been particularly weak. Far fewer of these markets have actually achieved record highs once inflation is taken into account.

Written by Tristan Hanson Head of Asset Allocation

Second, dividends should be accounted for. Third, and more importantly for investors today, is the outlook for future returns. Are new highs a sign that investors should sell or a reason to be confident of a continued rise in the markets? How can, or indeed, should you assess potential future investment returns from the various asset classes?

Dow Jones Industrial Average reaches a new all-time high price level 450

DJ Industrial Average PR USD

S&P 500 PR

MSCI World PR USD

400

There are several reasonable approaches to this challenge.

350

250 200 150 100 50 0 1993

1995

1997

1999

2001

2003

2005

2007

2009

2012

Source: Morningstar as at 2 April 2013

300

One option is to look at historic returns in the expectation that, so long as we have sufficient data, the past will provide a reasonable indication of performance in the future. Another is to forecast various fundamental factors (e.g. dividends, inflation, interest rates etc.) and choose an appropriate “end-period” valuation to come up with an overall forecast of returns.


| 4 | 5 |

A third method is to analyse the relationship between valuations and future returns and then use this as a guide for future returns based on current valuations. At Ashburton, we use all of these approaches to provide an indication of how we think the various asset classes will perform over the mediumto-long term; the next five years for example. The results then shape how we think about the various asset classes on a strategic basis. Very much in the spirit of a quotation often attributed to Keynes, we can be fairly certain that the results from this exercise will be “precisely wrong” – the world is largely random and historic relationships are only broad guides – but we hope to be “roughly right”. Valuations give the strongest signals at extremes. While investing based on valuations is not reliable over the short-term, there is significant evidence from across the various asset classes that buying assets on depressed valuations improves the probability of achieving above-average returns over the longer term2. In this way, it can be helpful, as suggested by Professor of Finance and Economics at the University of Chicago, John Cochrane3, to think of the predictive power of valuations like a gradual change in the weather. For example, in London, the temperature will rise on average by 1/10th of a degree Celsius each day through spring. As Cochrane says, such a forecast “explains very little of the day to day variation in temperature [as UK residents know only too well this year] but tracks almost all of the rise in temperature from January to July”. Just like daily swings in the weather, short-term market returns are “noisy”.

We believe it is a reasonable assumption to expect global equities to achieve their long-run average real total return of 5% p.a. over the coming five years.

How does this compare to other asset classes?

As policy rates increase, we expect bond yields to rise. This will mean negative real returns from developed market government bonds as well.

We expect cash rates in the major developed markets to remain low, although increasing gradually over the forecast horizon. Real returns from US, EU and Japanese cash deposits are therefore expected to be negative on average over the next five years. As policy rates increase, we expect bond yields to rise. This will mean negative real returns from developed market government bonds as well. We expect the higher yield on corporate bonds to deliver better returns than cash, or government bonds, but close to zero in real returns over the forecast horizon. High yield corporate bonds and a basket of emerging market local currency bonds may deliver better returns, although hard currency investors will face exchange rate risk and may want to choose currencies selectively. Taking all of this into account, equities are, in our view, the most attractive asset class from a medium-term perspective for the buy-andhold investor. Fixed income returns, on the other hand, are expected to be poor by historic standards.

That said, in the absence of perfect foresight it is critically important to be aware of the uncertainty around such forecasts. Hard to predict events such as wars, revolutions, terrorist attacks, political developments and numerous other “shocks” (negative or positive) will show up in historic return statistics but are rarely included in one’s central forecast. Under these circumstances a flexible and dynamic approach is essential. For the more cautious investor, a multi asset fund may be an attractive option as a means of mitigating the risk of investing solely in equities. Balancing risk against reward, our Multi Asset Funds will generally be invested in line with our medium-term views, although we also seek to enhance returns through tactical asset allocation and superior security selection.

Historic equity and bond returns - Cumulative real returns (% p.a.)

Overall, at Ashburton we believe it is a reasonable assumption to expect global equities to achieve their long-run average real total return of 5% p.a. over the coming five years.

Equities Bonds

World

World ex-USA

USA

0

1.0

2.0

3.0

4.0

5.0

6.0

%

1. Germany’s DAX, India’s NIFTY, Indonesia’s Jakarta Composite, Mexico’s IPC, South Africa’s TOP40 and the UK’s FTSE All-Share indices. 2. Interested readers may want to look at the work of John Cochrane, John Campbell and Robert Shiller among others. 3. See Cochrane (1999), “New Facts in Finance”.

7.0

Source: Dimson, Marsh & Staunton, Credit Suisse Global Investment Returns Sourcebook 2013

1900-2012 While several equity indices are at record highs, the good news is that global equity valuations are not as expensive as they were in 2007 or the massive overvaluation that occurred in developed markets in 2000. Broadly speaking, equity valuations seem reasonable with the US perhaps being the sole area of concern if one looks at longer-run valuation ratios such as Price/Book or Price/cyclically-adjusted Earnings.


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

Data mining

The smart phone evolution

Smart phones have revolutionised the way we consume data. Indeed, the phone has changed from a rudimentary device for calling people, to a sophisticated handheld computer that finally fulfils the promise which the PDA of the 90’s singularly failed to deliver. And while penetration in developed markets is high, there’s still plenty of room for growth in the developing world. For the past few years Apple have effectively dominated the market in terms of internet connectible handsets, wrestling the mantle from Blackberry who had initially led the way, albeit largely in the corporate space. Typically of Apple, although theirs was not the first smart phone to the market, they were arguably the first to realise its full potential; building a user-friendly device which they then leveraged still further, exploiting the “halo” effect - the interoperability of all their devices - to keep users coming back for more. More recently, as the smart phone market has become increasingly commoditised and competitors in the field have caught up, Apple’s proposition, not to mention its margins, seems a little less compelling.

For the past few years Apple have effectively dominated the market in terms of internet connectible handsets, wrestling the mantle from Blackberry who had initially led the way...

Written by Jonathan Aldrich-Blake Investment Manager

As the smart phone market continues to evolve, the smart money is looking for growth not from the usual suspects but instead from those handling the ever-increasing quantity of data we’ve all come to expect.

Similarly, industry commentators are watching with interest to see whether Blackberry’s new Z10, which many regard as possibly the company’s last throw of the dice, will actually stop the rot or whether indeed this is a classic case of too little too late. An interesting new trend, and one which is likely to concern hardware manufacturers, Blackberry perhaps most of all, is BYOD (Bring Your Own Device). Instead of having two phones, one for the office and one for personal use, BYOD is a policy allowing


| 6 | 7 |

employees to bring personally owned mobile devices (laptops, tablets, and smart phones) to their workplace, and use these devices to access privileged company information and applications. There are, inevitably, security implications which the more fleet of foot in the market are already addressing: Samsung’s S4 effectively splits your phone in two: one secure part for work, and the other for personal use. So when looking for new investable opportunities in the smart phone market it’s important to look a little further afield and dig a little deeper. It’s an approach Google adopted some time ago. Their Android operating system, installed on 70% of all new smart phones sold globally, dominates the market. And while they make no money from selling the operating system per se, it guarantees the continuing dominance of the search market and increases revenue paid search and ancillary products, as well as app sales.

At the other end of the technical spectrum, another sector worthy of note that has, and should continue to benefit from data proliferation is the tower companies. Simply, they provide the metal towers that the wireless operators put their antennas on. As the data networks become ever more stretched, the next generation LTE networks will, inevitably, require more tower sites. The revenue the tower companies receive increases with the addition of each new piece of equipment to any existing tower.

The industry is currently led by a few key players with the rest being very fragmented, which would suggest significant acquisition potential. And existing mobile operators are selling off their tower assets to release capital to build out the new networks and buy additional spectrum. No longer linked to a mobile operator, anyone purchasing these towers can make them available for multiple tenant use, improving the cash flow and return per tower.

The industry is currently led by a few key players with the rest being very fragmented, which would suggest significant acquisition potential. And existing mobile operators are selling off their tower assets to release capital to build out the new networks and buy additional spectrum.

The smart phone market will continue to evolve but the smart money will look beyond the commoditisation of hardware and, to some degree, even the software to find opportunities that play towards the changing dynamics of mobile data and how that affects users’ lives.

Smartphone as % of handset sales

90.0% APAC Ex Jap

80.0%

North America

70.0% 60.0% 50.0% 40.0% 30.0% 20.0%

As the seemingly endless demand from consumers continues, data could very well be where the new opportunities lie.

10.0% 0.0% 1Q 07

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

3Q 10

1Q 11

3Q 11

1Q 12

3Q 12

Source: Raymond James and Gartner as at 31 December 2012

As the seemingly endless demand from consumers continues, data could very well be where the new opportunities lie. Anritsu, for example, is an interesting stock listed in Japan that plays into the continuing build out of evermore data intensive networks. They offer unique exposure to the growing wireless handset and network test industry that continued adoption of high-end wireless devices demands. Anritsu has a strong product line and solid market shares for 3G and LTE (Long Term Evolution) wireless testing. As such, we believe Anritsu is well positioned to benefit from the adoption of these standards, which in our view will be the drivers of growth in the industry. The ever increasing complexity of the networks and data standards demand higher and more in-depth levels of testing and performance monitoring.


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

India - moving forward Written by Simon Finch Assistant Investment Manager

India, one of the fastest growing emerging economies, has been plagued by legislative and political bottlenecks stalling development in a variety of sectors; however, as witnessed on my recent trip, progress is definitely now being made.

On a recent fact finding visit to India, Simon Finch experienced first hand how political change and inward investment are ensuring the subcontinent’s logistics are gradually improving to match consumer demand. Having visited India a number of times over more than a decade, I never fail to be amazed by the sense of chaos that greets you on leaving the airport. The noise and sheer volume of traffic is a sight to behold, with drivers seeming to demonstrate little or no regard for the rules of the road. On closer inspection, however, what at first appears to be total chaos, turns out to be quite the opposite - an appropriate metaphor for other parts of the economy and, indeed, India as a whole.


| 8 | 9 |

India, one of the fastest growing emerging economies, has been plagued by legislative and political bottlenecks stalling development in a variety of sectors; however, as witnessed on my recent trip, progress is definitely now being made. The government has been pushing through a number of reform measures and one area where there has been significant improvement, thanks to increased inward investment, is logistics. Following the recent launch of the Ashburton Indian Equity Opportunities Fund in September 2012, the main focus of my trip was to investigate and experience for myself the dynamics of the “Infrastructure & logistics” dual theme within the Fund. As many readers will know, India is one of the world’s largest importers of goods such as oil, gas, coal and gold. I wanted to better understand the processes involved in moving these goods around the sub-continent in amongst this “organised chaos”, and also how the logistics network was improving connectivity across the region. Less than two hours’ flight north of Mumbai lies Gujurat state, which is currently developing India’s latest deep port in Mundra. A vast area has been designated a Special Economic Zone (SEZ) as the State’s governor, Narendra Modi, seeks to attract inward investment to enable Mundra to compete directly with neighbouring ports in Mumbai, as well as those on India’s southern-most regions. The new port, built and run by India’s largest private port operator, Adani Ports, has undergone a colossal transformation since its inception in 1998. Over 9,000 hectares of land have been developed to create four separate ports, set to be fully operational by 2015/16.

Containers at Allcargo Logistics One of the primary aims is to increase the efficiency of coal use: two power stations, located at the port, supply power to the rest of the state and beyond, up into the northern hinterlands and Delhi itself. Indeed 45% of India’s imported coal comes through Mundra, where there have already been incremental improvements in power capabilities as the two power plants, the rail network and the port operators work more closely together.

be just one factor in improving productivity, and will also ultimately help India reduce their current account deficit. A widening current account deficit is harmful to the growth prospects of any country and India’s was a key topic for debate when I visited the Reserve Bank of India on the day of the Indian Budget announcement. During the trip, I was also able to meet companies that we invest in directly; including an expanding logistics company with interests

As consumption of goods in both the urban and rural areas increases, the requirement for efficient logistics and operational excellence will be paramount.

in the rail network, trucking and, more recently, expanding cold storage facilities. One of our overriding themes in the Fund is that of the Asian Consumer. As consumption of goods in both the urban and rural areas increases, the requirement for efficient logistics and operational excellence will be paramount. The cold storage facilities will enable food to be transported across greater distances. It will also encourage households to install

Late in 2012 the Indian government re-initiated the Cabinet Committee on Investments (CCI) to fast-track infrastructure projects, with the Prime Minister Manmohan Singh being elected as chairman. In the last few months the CCI has already approved a number of projects, an admirable achievement given how often in the past developments have been hampered by legislative and political impediments. Upon returning to Mumbai, I spent a day visiting container depots in the JNTP port, witnessing first hand the level of investment in the logistics sector. Computerised recording of containers, including GPS tracking and automated customs procedures, are significantly reducing the time containers are held in port, meaning customers receive their goods more efficiently.

Adani Ports and SEZ in Mundra

This improvement in turnaround times will

refrigerators to benefit from the goods now available to them. We own Whirlpool, the white goods manufacturer, and they should be a direct beneficiary of a consumer move towards cold storage. So, whilst on the surface India’s complex network of rail and road may seem cumbersome, and a barrier to progress, recent government announcements and initiatives have led to investment at all levels and significant improvements in the logistics supply chain. From port, through customs, to rail, road, and ultimately to the end user, things are moving forward for India. The challenge now will be to keep that momentum going as India moves through its complex regional assembly election process.


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

News Making a splash for charity

East meets West

On 14 March 2013, the Jersey office entered a team into the annual Jersey Swimarathon and by swimming 70 lengths, contributed over £100 towards the £110,000 raised in total at this year’s event.

In February, Ashburton hosted its first series of investment briefings for 2013 in Jersey, the theme of which was ‘East meets West’. Speakers Tristan Hanson, Head of Asset Allocation, and Jonathan Schiessl, Ashburton’s Asian Equities specialist, discussed their outlook on the global economy and provided insights into the changing economies and governments of India, China and Japan and what possible opportunities and threats may lie ahead this year. Our new venue choice, Banjo, as well as our line up of speakers, proved popular with our local audience, with attendees totalling 180 spread across three events. We were also pleased to welcome some of our South African colleagues to these briefings, including Head of Ashburton Investments, Boshoff Grobler.

The first Swimarathon took place in Jersey in 1972 and to date has raised almost three million pounds for charity, most of which has been spent in the Island. Funds from the Swimarathon have been used for building an indoor swimming pool for the handicapped, a day care centre for children, a day care centre for the elderly, establishing a hospital radio service and supporting many other local and international charities. Well done team for taking the plunge, despite the snowy weather which hit Jersey that week.

Preparing for the sun to set

This summer marks the fifth year of Ashburton sponsoring the National Trust’s open-air Sunset Concerts in Jersey. Described as Ashburton’s very own mini version of the popular Starlight Classics Concerts in South Africa, these events have grown to attract over 5,000 people over the two nights.

The 2013 dates have been announced as Friday 28 and Saturday 29 June 2013. The Friday night features local folk band The Badlabecques, who sing some songs in Jèrriais, Jersey’s patois. Whilst Cleveland Watkiss Jazz Dance Live will bring a vibe of upbeat soul and jazz from London on the Saturday night. The Sunset Concerts provide

a perfect showcase for Jersey’s amazing coastline and the importance of its preservation for generations to come. Funds raised at the events go directly to support the National Trust’s Coastline Campaign and Ashburton is proud to continue its association with such a worthwhile campaign.


WELCOME | MACRO OUTLOOK | INNOVATION | INDIA | NEWS | PERFORMANCE

Performance % Growth

| 10 | 11 |

as at 31 March 2013

YTD

1 year

3 year

5 year

10 year

Since Launch

Launch Date

Yield (%)

Sterling Asset Management - Accumulating*

3.96

5.59

14.23

16.86

77.46

271.92

04/02/92

n/a

MSCI, JPM & Cash GBP (Hedged)

3.40

5.81

12.44

15.20

67.81

266.60

-

-

Sterling Asset Management - Distributing*

4.02

5.71

15.36

17.72

76.61

299.28

01/01/92

0.71

MSCI, JPM & Cash GBP (Hedged)

3.40

5.81

12.44

15.20

67.81

268.23

-

-

Dollar Asset Management - Accumulating*

2.01

3.72

11.94

7.07

73.92

222.96

04/02/92

n/a

MSCI, JPM & Cash USD (Hedged)

3.28

5.64

12.12

13.21

54.67

-**

-

-

Euro Asset Management - Accumulating*

2.91

4.53

14.59

17.36

-

58.48

25/04/03

n/a

MSCI, JPM & Cash EUR (Hedged)

3.22

5.27

11.69

13.10

-

49.26

-

-

Multi Asset Cautious Fund GBP

1.97

2.65

9.47

8.23

-

20.22

19/06/06

0.45

MSCI, JPM & Cash GBP (Hedged)

3.40

5.81

12.44

15.20

-

25.65

-

-

Multi Asset Balanced Fund GBP

4.39

5.03

13.26

12.89

-

27.58

19/06/06

n/a

MSCI, JPM & Cash GBP (Hedged)

3.40

5.81

12.44

15.20

-

25.65

-

-

Multi Asset Balanced Fund USD

2.10

2.98

11.09

4.68

-

25.99

19/06/06

n/a

MSCI, JPM & Cash USD (Hedged)

3.28

5.64

12.12

13.21

-

23.09

-

-

Multi Asset Balanced Fund EUR

3.02

3.50

12.34

10.91

-

7.58

18/02/08

n/a

MSCI, JPM & Cash EUR (Hedged)

3.22

5.27

11.69

13.10

-

12.17

-

-

Multi Asset Aggressive Fund GBP

5.52

6.40

13.08

8.68

-

19.68

19/06/06

n/a

MSCI World Hdg PR GBP

9.44

11.51

17.15

1.91

-

4.67

-

-

Global Sterling International Equity Fund PC

11.22

10.89

10.75

3.17

81.26

339.32

01/01/92

nil

MSCI World TR GBP

15.48

18.41

29.65

50.48

157.03

427.11

-

-

Global Dollar International Equity Fund PC

4.88

5.38

10.73

-15.12

85.66

7.61

06/04/00

nil

MSCI World TR USD

7.87

12.53

29.79

14.96

146.91

35.79

-

-

Chindia Equity Fund

-2.18

5.50

-13.15

-18.15

-

-4.63

01/12/06

nil

Chindia Benchmark

-1.95

5.29

1.95

3.22

-

32.86

-

-

European Equity Fund PC

1.55

6.78

20.29

5.93

199.59

256.84

06/01/97

nil

MSCI Europe TR USD

5.58

15.42

23.65

14.80

127.10

165.87

-

-

Chindia Equity Fund - £ Feeder PC

4.61

10.76

-13.73

5.63

-

21.71

01/12/06

nil

European Equity Fund - £ Feeder PC

5.08

7.16

13.69

11.10

-

36.67

01/12/06

nil

0.02

0.55

1.46

6.54

-

32.30

25/10/02

0.25

-0.07

-0.17

0.00

1.82

-

16.89

25/10/02

0.01

Multi Asset Funds

Equity Funds

Feeder Funds

Money Market Funds Sterling Money Market Fund Dollar Money Market Fund

Please note: The comparative performance benchmarks for the Multi Asset Funds have changed to composite benchmarks, which we feel are more representative of the underlying asset allocation of each Fund. Abbreviations: MSCI: Morgan Stanley Capital International Global Equity Index, JPM: JP Morgan Global Bond Index. *Accumulating applies to Ashburton Replica Portfolio Ltd. Distributing applies to Ashburton Global Funds PCC. **Historic data for one component of the benchmark does not go back as far as the launch date of the Dollar Asset Management Fund. FOR PROFESSIONAL ADVISERS ONLY. Issued by Ashburton (Jersey) Limited. Registered Office 17 Hilary Street, St Helier, Jersey JE4 8SJ, Channel Islands. Regulated by the Jersey Financial Services Commission. Figures are calculated on a bid to bid price basis, ignoring initial charge, with gross income reinvested. The value of investments, and the income from them, can go down as well as up, is not guaranteed, and you could receive back less than you invested. This could also happen as a result of changes in the rate of currency exchange, particularly where overseas securities are held. Past performance is not necessarily a guide to future performance. If you undertake investment business with a non-UK firm, you will be excluded from the benefit of the rules and regulations made under the UK’s Financial Services and Markets Act 2000, including the UK Financial Services Compensation Scheme. Approved for issue in the UK by FirstRand Bank Limited (London Branch) whose Registered office is at 20 Gracechurch Street, London EC3V 0BG and which is authorised and regulated by the UK Financial Services Authority.


Global Contacts JERSEY

SOUTH AFRICA

Ashburton (Jersey) Limited PO Box 239 17 Hilary Street St Helier Jersey JE4 8SJ

Johannesburg Merchant Place 1 Fredman Drive Sandton 2196 South Africa

Cape Town The Pavilion 155 Campground Road Newlands 7700 South Africa

Gavin Fraser Direct dial: +44 (0)1534 512234 Email: gavin.fraser@ashburton.com

David Christie Direct dial: +27 (0)82 897 6695 Email: david.christie@ashburton.co.za

Adam Benzimra Direct dial: +27 (0)72 268 8791 Email: adam.benzimra@ashburton.co.za

Tom Zambon Direct dial: +44 (0)1534 512010 Email: tom.zambon@ashburton.com

Claire Davies Direct dial: +27 (0)83 624 4286 Email: claire.davies@ashburton.co.za

Lara Ellis Green Direct dial: +27 (0)83 283 2227 Email: lara.ellisgreen@ashburton.co.za

Kellie Christian Direct dial: +44 (0)1534 512118 Email: kellie.christian@ashburton.com

Adriaan Van der Merwe Direct dial: +27 (0)82 450 2142 Email: adriaan.vandermerwe@ashburton.co.za

Stefan Heiberg Direct dial: +27 (0)82 560 3814 Email: stefan.heiberg@ashburton.co.za

UK

Trevor Lee Direct dial: +27 (0)82 458 2298 Email: trevor.lee@ashburton.co.za

Durban 17 The Boulevard Westway Office Park Westville 3610 South Africa

London 5th floor 20 Gracechurch Street London EC3V 0BG United Kingdom

Clare Buthelezi Direct dial: +27 (0)72 064 6561 Email: clare.buthelezi@ashburton.co.za

Terry James Direct dial: +44 (0)207 939 1803 Email: terry.james@ashburton.com

Issued by Ashburton (Jersey) Limited. Registered Office 17 Hilary Street, St Helier, Jersey JE4 8SJ, Channel Islands. The views expressed in this document represent the collective views of the Ashburton investment team and its external advisers, which will change with altering market conditions and may not necessarily be reflected in the composition of portfolios managed by Ashburton. The value of investments, and the income from them, can go down as well as up, is not guaranteed, and you could receive back less than you invested. This could also happen as a result of changes in the rate of currency exchange, particularly where overseas securities are held. Past performance is not necessarily a guide to future performance. Ashburton (Jersey) Limited and Ashburton Fund Managers Limited are regulated by the Jersey Financial Services Commission. Ashburton (Jersey) Limited is also registered as a Foreign Investment Services Provider in South Africa in accordance with Section 8 of the Financial Advisory & Intermediary Services Act 2002. If you undertake investment business with a non-UK firm, you will be excluded from the benefit of the rules and regulations made under the UK’s Financial Services and Markets Act 2000, including the UK Financial Services Compensation Scheme. Approved for issue in the UK by FirstRand Bank Limited (London Branch) whose Registered office is at 20 Gracechurch Street, London EC3V 0BG and which is authorised and regulated by the UK Financial Services Authority.

Debbie Miskin Direct dial: +27 (0)82 449 8639 Email: debbie.miskin@ashburton.co.za Wendy Hobson Direct dial: +27 (0)82 496 5416 Email: wendy.hobson@ashburton.co.za


The Great Rotation - Ashburton's Perspective