Grr eur ppt citywire conference 11_13_05_2011(paper)_final_09052011

Prepared for professional investors only

Presentation on:

Achieving perspective in an uncertain world – Newton’s solution - BNY Mellon Global Real Return Fund (EUR)

Suzanne Hutchins – Investment Manager and lead fund manager for BNY Mellon Global Real Return Fund (USD) at Newton

Citywire Montreaux - 11th -13th May 2011

Curriculum Vitae Biography

2010 to date Newton Investment Management

2005 – 2010 Capital International Limited

1991 – 2005 Newton Investment Management

Suzanne Hutchins rejoined Newton in 2010 as global

investment manager and member of the Real Return team. She

moved to Capital International in 2005 as Investment Specialist

for global equity, income and absolute return based strategies.

She had additional client facing responsibility for ESG

(Environmental, Social and Governance) issues. Suzanne

joined Newton in 1991 as a research analyst after completing a

BA (Hons) at University College London. During her 14 years

with Newton, she worked closely with Stewart Newton before

becoming lead on the UK and Intrepid team. She managed

multi-asset, global equity mandates and RPI+ based strategies

for institutional and retail clients.

Responsibilities

Investment manager – global funds

Member of the Real Return investment team

Member of the global investment meeting

Qualifications

Associate member of the United Kingdom Society of Investment

Professionals (UKSIP)

BA (Hons)

15 years at Newton

20 years‟ investment experience

Suzanne Hutchins

Our culture is aligned with your objectives

Newton’s appeal

Business focus

* ECU prior to Euro ** As at 31 March 2011

Source: Newton

Total assets under management • Performance culture –

concentrates teamwork,

communication and resources

towards delivering

outperformance

• Global specialists – 70% of

mandates are global including

over €30 billion in global funds

• Long-term incentive plan attracts

and motivates staff. We operate

as „owners‟ of the business

6.9

16.0

34.8

41.9

53.6

0

10

20

30

40

50

60

1993 1997 2001 2005 2011**

€bn*

Institutional Retail Private

4

Newton’s Real Return strategy for long-term growth

The power of perspective and flexibility

Target

Strategy type

EURIBOR +4% p.a. gross of fees

over rolling 5 year periods

Absolute return

● Equities

● Government Bonds

● Corporate Bonds

● Cash

● Derivatives

● Other assets via tradeable securities e.g.

Real estate

Commodities

Currencies

„Alternative‟ strategies

Can invest in:

Allowable assets

● An unconstrained active multi-asset strategy with lower volatility

● Emphasis on long term investing and capital preservation

● Transparent, single portfolio of direct, liquid investments

● Maximum flexibility at the portfolio construction level;

emphasis on traditional asset classes

no asset allocation constraints

5

Low High

Global equities

UK equities

Global bonds

Newton Real Return

Hedge funds

UK Index-linked bonds

UK Govt bonds Property

Cash

0

2

4

6

8

10

12

14

0 2 4 6 8 10 12 14 16 18

Volatility (% p.a.)

Retu

rn

(% p

.a.)

Newton's absolute return credentials Newton Real Return Fund

● Unconstrained evolution of Newton's proven global multi-asset approach

● Compelling long-term return; not possible through market returns in broad asset classes

● Absolute return in every calendar year

● Achieved with absolute volatility closer to bonds than equities

Past performance is not a guide to the future

Source: Newton, weekly data, total return in sterling, gross of fees and income reinvested. Asset class statistics relate to the following measures: FTSE All Share, FTSE World,

FTSE Brit. Gov't Fixed All Stocks, FTSE Brit. Gov't Index IL All Mats, JPM Global Gov't Bond, HFRI Fund of Funds (net), IPD All Properties, LIBOR 1 Month

Risk versus return since inception 1 April 2004 to 31 March 2011

6

Newton’s real return strategies Overview as at 31 March 2011

Please see important information at the end of this presentation.

Source: Newton

Real Return Strategy

GBP version

Global Real Return Strategy

EUR version USD version

Investment team James Harries, Iain Stewart, Matt Brown,

Suzanne Hutchins, Aron Pataki

plus wider investment team

James Harries, Iain Stewart, Matt Brown,



James Harries, Iain Stewart, Matt Brown,



Benchmark UK Libor (1 month) Euribor (1 month) USD Libor (1 month)

Base currency risk GBP EUR USD

Base currency exposure (current) 69.2% 61.3% 81.8%

Target outperformance +4%pa +4%pa +4%pa

Time horizon 3-5 years 3-5 years 3-5 years

Strategy AUM £4.6bn €208m $65m

Pooled vehicle name Newton Real Return Fund (£3.0bn) BNY Mellon Global Real Return Fund (EUR) BNY Mellon Global Real Return Fund (USD)

Pooled vehicle country of domicile UK Ireland Ireland

Launch year 2004 2010 2009

Full flexibility Able to invest anywhere (including Private Equity,

HFOF, Convertibles, Property and other

Alternatives)

Able to invest anywhere (including Private Equity,


Alternatives)

Able to invest anywhere (including Private Equity,


Alternatives)

Expected long term volatility intermediate between equities

and government bonds

intermediate between equities


intermediate between equities


Use of derivatives yes yes yes

Equity sector constraints max 20% in one sector max 20% in one sector max 20% in one sector

Regional constraints no no no

Maximum position in one company 5% 5% 5%

Hedging capability yes yes yes

7

Newton’s structure and multi-asset investment approach The importance of perspective

● Highly interactive investment process

● Newton's structure of thinking globally from a single location allows us to utilise themes

● Themes provide valuable perspective

● Generalist multi-asset team supported by teams of specialists provide objective thinking and a powerful combination of perspectives;

global cross comparison of asset types

global cross comparison of securities within asset types

● Single ‘holistic’ portfolios enable global portfolio construction and enhanced risk awareness

Assessing the world as one investment opportunity

8

Global equity research – 22

Avg yrs’ experience: 14 Avg yrs at Newton: 6

Newton’s Real Return team Idea generation and input

James

Harries

Iain

Stewart

Matthew

Brown

Source: Newton, March 2011

Portfolio ideas come from everywhere – powerful combination of perspectives

Bond / FX Strategy Group Asset Class Strategy Group Macro Strategy Group Equity Strategy Group

Strategy – 3 Avg yrs’ experience: 16 Avg yrs at Newton: 11

Global equity – 14 Avg yrs’ experience: 16 Avg yrs at Newton: 13

Specialist regional equity – 18

Avg yrs’ experience: 12 Avg yrs at Newton: 7

Fixed income – 8 Avg yrs’ experience: 12

Avg yrs at Newton: 5

Other assets – 5 Avg yrs’ experience: 9 Avg yrs at Newton: 9

Real Return team

Aron

Pataki

Suzanne

Hutchins

Real Return Meeting

9

… and Newton's view

of the world…

…which defines the

portfolio structure…

… and provides the

building blocks… … to construct a single,

flexible portfolio

Newton's starting point

is the target…

Absolutely focused – flexibility is key

● Security

characteristics

● Capital

preservation

● Asset

allocation

● Regional mix

● Volatility

● Currency

Research

Recommended

Lists

Model

Portfolios

Return

(EURIBOR +%)

Risk

(Volatility%) A BNY Mellon Financial

CompanySM

Real Return

strategy Global Strategy

Unconstrained multi-asset investing The process

10

Idea generation How themes influence investment selection

Source: Newton, 28 February 2011

Information is for illustrative purposes only and should not be construed as investment recommendations.

The popping of the credit bubble marks the beginning of the end for rapid credit creation in the developed world, and the start of a period of deleveraging. Higher volatility anticipated as well as detrimental consequences for growth in consumer driven economies.

Selected developing

world currencies

(eg. Chinese RMB)

Strong mature

economy currencies

(eg. Norwegian

Krone)

Weak, deficit

economy currencies

(eg. Sterling, US

dollar)

Equity market

hedges

Government bond

options

Senior debt in more cyclical

sectors

„Surplus‟ economy

Government bonds

eg. Norway

Deficit economy sovereign

debt

Self financing, „stable‟ earnings, high

yields

Large capitalisation, global reach

Growth areas

Credit dependent sectors/leveraged

business models

CurrencyOther assetsFixed IncomeEquity

Selected developing

world currencies

(eg. Chinese RMB)

Strong mature

economy currencies

(eg. Norwegian

Krone)

Weak, deficit

economy currencies

(eg. Sterling, US

dollar)

Equity market

hedges

Government bond

options

Senior debt in more cyclical

sectors

„Surplus‟ economy

Government bonds

eg. Norway

Deficit economy sovereign

debt

Self financing, „stable‟ earnings, high

yields

Large capitalisation, global reach

Growth areas

Credit dependent sectors/leveraged

business models

CurrencyOther assetsFixed IncomeEquity

+

––

+

+

––

+

+

+

+

+

+

––

11

Idea generation Stock selection

• P/E 9.0x 2012

• EV/EBITDA 7.0x 2012

• Dividend yield 5.3%

• Market cap $150bn

• Product pipeline innovation

• Specialist product portfolio

• Low patent expiry

Identifying global winners

As at April 2011

Portfolio holdings are subject to change at any time without notice and should not be construed as investment recommendations

Stock example: Roche

Attractive valuation Strong fundamentals

12


• Senior paper

• Leverage of 4.3x net debt /

EBITDA

• Running yield of 7.6%

• Largest producer of processed meats in Europe

• Market leading positions in both branded and private labels in its key markets

• Company continues to delever and is targeting a range of 2.5-3.0x net debt / EBITDA

• Good liquidity with no near term debt maturing

As at April 2011


Stock example: Campofrio



13

BNY Mellon Global Real Return Fund (EUR) Equity analysis – Top ten holdings at 31 March 2011

Portfolio holdings are subject to change at any time without notice. This information should not be construed as a recommendation to purchase or sell any security.

Source: Newton, as at 31 March 2011

Stock Weighting (%)

Bayer 2.66

Newcrest Mining 2.46

Roche 2.19

GlaxoSmithKline 1.98

Reynolds American 1.96

Mtn Group 1.53

Novartis 1.50

Petroleo Brasileiro 1.49

Scottish & Southern Energy 1.47

Statoil 1.45

14

Newton Real Return positioning

Conceptual representation

Seamless management of „risk‟ and return

Source: Newton, 31 December 2010

● Emphasis on traditional asset classes

● A return seeking core with particular security characteristics

● Risk offsetting positions for dampened volatility and downside protection

● Not an asset allocation fund – flexibility to adjust risk hedging in addition to shifting asset allocation

Building an asymmetric multi-asset portfolio

15

BNY Mellon Global Real Return Fund (Euro) Strategic positioning at 31 March 2011

Source: Newton

Portfolio holdings are subject to change at any time without notice, are for information purposes only and should not be construed as investment recommendations.

Convertibles 3.0%

Bonds 17.3%

Equities 57.4%

Other 4.2%

Cash & equivalents 17.6%

UK 11.1%

North America 14.1%

Europe ex UK 19.4%

Pacific Basin ex Japan 2.6%

Japan 2.0% Emerging markets 8.3%

Government index linked 2.3%

Government bonds 4.7%

Corporate 10.7%

Derivatives 0.1%

Commodities 4.1%

Return enhancing assets

● Equities

High yielding global equities

Positions in unloved sectors (healthcare, telecoms) and emerging world growth

● Corporate debt

Selective exposure at compelling yield

Risk offsetting positions

● Derivatives

Euro Stoxx options providing downside protection if equity markets sell-off

AUD put options risk aversion commodity cooling

US Bond call options Providing protection if bond markets rally

Euro put options risk aversion increasing peripheral Europe contagion risk

● Currency

Approximately 40% exposure to overseas currencies not accounting for overseas earnings of domestic stocks

● Commodities

Inflation hedge – gold via physical gold ETF hedge against any inflation from the scale of loose policy and QE

Inflation hedge – soft commodities via agricultural ETF earth matters and developing economies support this

16

BNY Mellon Global Real Return Fund (Euro)* Historical analysis of fund positioning

Source: Newton, 31 March 2011


The chart above illustrates changes in asset allocation for the € Real Return Fund over five years. For illustrative purposes, delta adjusted equity market option exposure is shown below the main body of the chart, to demonstrate

the extent to which downside protection has been utilised over time. Similarly, synthetic bond positions (bond options) have been highlighted above the main body of the chart to illustrate clearly the different bond exposures -via

options and physical positions. Importantly, the strategy does not borrow to implement derivative strategies and risk controls exist to prevent exposing the strategy to open-ended losses. * Pre July 2007, delta has been adjusted

using end of day data sourced from the relevant exchanges. ** Data pre April 2010 relates to £ Newton Real Return Fund. Data post April 2010 relates to the € Newton real Return Fund

-60

-40

-20

0

20

40

60

80

100

120

140

Apr-

04

Jun-0

4

Sep-0

4

Dec-0

4

Mar-

05

Jun-0

5

Sep-0

5

Dec-0

5

Mar-

06

Jun-0

6

Sep-0

6

Dec-0

6

Mar-

07

Jun-0

7

Sep-0

7

Dec-0

7

Mar-

08

Jun-0

8

Sep-0

8

Dec-0

8

Mar-

09

Jun-0

9

Sep-0

9

Dec-0

9

Mar-

10

Jun-1

0

Sep-1

0

Dec-1

0

Mar-

11

Weig

hting

Equities Government bonds Corporate bonds

Index-linked Convertibles Commodities

Cash Equity hedge (delta adjusted protection*) Synthetic fixed income exposure (delta adjusted)

0

20

40

0

20

40

-40

-20

0

-40

-20

0

17

Newton’s Real Return Strategy Derivatives use since inception

Source: Newton, March 2011


Cash / income generation Synthetic exposureHedging / risk managementCash / income generation Synthetic exposureHedging / risk management

Eq

uit

yB

on

dC

ash

/

Cu

rren

cy

Oth

er

FTSE 100 Index, S&P 500 Index

Hang Seng Index, DJ Euro Stoxx

50 Index

Bought equity put options

FTSE 100 Index, S&P 500 Index

Hang Seng Index, DJ Euro Stoxx

50 Index

Bought equity put options

S&P 500 Index, FTSE 100

DJ Euro Stoxx 50 Index

Written equity index call options



Written equity index call options

US Long bond

US 10 year Notes

Euro – Bund 10 year future

Bought call options

on bond futures

US Long bond

US 10 year Notes

Euro – Bund 10 year future

Bought call options

on bond futures

Sterling to Singapore Dollar,

Japanese Yen, Swiss Franc

Sterling to Euro

USD to Chinese Rembini

(non deliverable forward)

Taken forward currency

positions

Sterling to Singapore Dollar,

Japanese Yen, Swiss Franc

Sterling to Euro

USD to Chinese Rembini

(non deliverable forward)

Taken forward currency

positions

14 stocks

Written covered

calls on securities

14 stocks

Written covered

calls on securities

VIX Index

(volatility index of S&P 500 index)

Bought volatility index put

options

VIX Index

(volatility index of S&P 500 index)

Bought volatility index put

options

Australian dollar to USD

Euro to USD

Taken exchange traded

currency option position

Australian dollar to USD

Euro to USD

Taken exchange traded

currency option position

Sterling to Yen

Sterling to USD

Taken OTC currency

option position

Sterling to Yen

Sterling to USD

Taken OTC currency

option position

BP

Single stock strategy /

stock replacement

BP

Single stock strategy /

stock replacement



Written equity index put options



Written equity index put options

18

Real Return investing Controlling the risks

Ensuring risk is appropriate, consistent and intended

* Based on long term volatility statistics

Portfolio

objectives

(1 month Euribor

+4% target)

Risk control

(portfolio guidelines)

Risk monitoring

Real Return

strategy

Risk parameters

Volatility expectations 10% – 12%*

Portfolio diversification Max 5% in any corporate issuer at purchase

Portfolio concentration Max 20% in any sector

Quantitative risk assessment

How much risk? – (stock weights, correlation, volatility) What kind of risk? – (currency, industry, stock specific) Is risk consistent? – (strategic views, stock & bond picks)

A BNY Mellon Financial

CompanySM

Bottom up risk management

Themes

Security selection

Portfolio construction

Fundamentals Proprietary research Price

Single portfolio approach Perspective

19

Newton Real Return Fund (GBP) Results analysis

Source: Newton

* Monthly data, total return, gross of fees. Rising and falling periods defined using quarterly MSCI World NDR returns

-20

-15

-10

-5

0

5

10

15

Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08

(%)

Equities BondsCash & currency Derivative InstrumentsCommodities Total Fund

Cumulative contribution month by month for 2008

Real Return +6.05%

Target return (LIBOR +4%) +9.52%

Global equities (MSCI World NDR) -17.92%

-10

-5

0

5

10

15

Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09

(%)

Cumulative contribution month by month for 2009

Real Return +10.93%


Global equities (MSCI World NDR) +15.73%

Contribution by asset class

109.3

6.9

123.7

-40.6

65.8

179.3

-50

0

50

100

150

200

Rising Markets Falling Markets Cumulative

(%)

New ton Real Return Fund MSCI World NDR

Results in differing equity markets since inception (to 31 March 2011)*

20

-4

-2

0

2

4

6

8

10

12

Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11

(%)

Equities Bonds Cash Derivative instruments Commodities Unitised/structured investments (other) Total fund

BNY Mellon Global Real Return Fund (EUR) Results contribution by asset class

Cumulative attribution month by month since inception to date

Source: Newton as at 31 March 2011

Past performance is not a guide to the future

Please remember that the value of shares and the income from them can fall as well as rise and investors may not get back the full amount originally invested

Different investments take the strain in different environments

BNY Mellon Global Real Return Fund (EUR) +10.30%

Target return (EURIBOR +4%) +4.93%


-60

-40

-20

0

20

40

60

80

100

120

140

Apr-

04

May-0

4Jun-0

4Jul-04

Aug-0

4S

ep-0

4O

ct-

04

Nov-0

4D

ec-0

4Jan-0

5F

eb-0

5M

ar-

05

Apr-

05

May-0

5Jun-0

5Jul-05

Aug-0

5S

ep-0

5O

ct-

05

Nov-0

5D

ec-0

5Jan-0

6F

eb-0

6M

ar-

06

Apr-

06

May-0

6Jun-0

6Jul-06

Aug-0

6S

ep-0

6O

ct-

06

Nov-0

6D

ec-0

6Jan-0

7F

eb-0

7M

ar-

07

Apr-

07

May-0

7Jun-0

7Jul-07

Aug-0

7S

ep-0

7O

ct-

07

Nov-0

7D

ec-0

7Jan-0

8F

eb-0

8M

ar-

08

Apr-

08

May-0

8Jun-0

8Jul-08

Aug-0

8S

ep-0

8O

ct-

08

Nov-0

8D

ec-0

8Jan-0

9F

eb-0

9M

ar-

09

Apr-

09

May-0

9Jun-0

9Jul-09

Aug-0

9S

ep-0

9O

ct-

09

Nov-0

9D

ec-0

9Jan-1

0F

eb-1

0M

ar-

10

Apr-

10

May-1

0Jun-1

0Jul-10

Aug-1

0S

ep-1

0O

ct-

10

Nov-1

0D

ec-1

0Jan-1

1F

eb-1

1M

ar-

11

Cum

mula

tive %

gro

wth

Newton Real Return MSCI World (NDR) Libor plus 4%p.a.

Newton Real Return Fund (£)

Long-term investment results

-2.0 -3.0 -1.8

1.9

-1.6-3.3-7.8 -5.5

-30.9

-11.5

-60

-40

-20

0

20

40

60

80

100

120

+123.74%

+69.74%

+65.83%

Newton Real Return in market downturn MSCI World in market downturn

Market downturn

March 05 – April 05

March 2004 Market downturn

April 06 – May 06

Market downturn

June 07 – July 07

Market downturn

December 07 – Feb 09

Market downturn

April 10 – June 10

Figures are based on sterling returns. Past performance is not a guide to the future Source: Newton, weekly data, total return, gross of management fees, gross income reinvested. 31 March 2011

-7.8 -3.3 -2.0 -3.0 -5.5 -1.8

-30.9

1.9

-11.5 -1.6

22

BNY Mellon Global Real Return Fund (EUR) Conclusion

Why BNY Mellon AM

Specialist approach to fund management. Appointed Newton to manage the portfolio as their Global Thematic specialist with expertise in global mixed funds. Newton has €9.7 bn in multi-asset/real return strategies.

Aims to beat cash returns

1 month EURIBOR +4% over a 3- 5 year rolling periods

Track record Based on the Newton Real Return Fund, managed by Newton since 2004, which has achieved this objective in this time frame and has AAA rating by Standard & Poor's, 5 stars Morningstar.

Resourceful Fund manager is supported by a team that generates ‘global themes’ and the macroeconomic strategy as well as by a team of 21 analysts responsible for the bottom-up input.

Experienced Strategy Director has 23 years investment experience at Newton. Fund manager, has 15 years’ experience managing multi-asset class portfolios.

Qualitative rating

Flexible approach Can invest in a variety of asset classes (equity, fixed income, cash instruments, REITS, commodities) with a global approach. Can also invest in simple derivatives to capture strong returns and preserve capital in all conditions.

The strategy was launched on 31 March 2004 (the Fund was previously called Newton Intrepid and followed a completely different strategy).

23

More information

Fund Microsites – www.bnymellonam.com/grr/en

24

Appendices

25

Newton Real Return Fund Investment team

Portfolio management team

Iain Stewart

Iain is investment leader of the global funds, a member of the Real Return team and a senior member of the strategy group, with particular responsibility for co-

ordinating the development of Newton‟s global investment themes. He joined Newton in 1985, and has specialised in the management of multi-asset and global

equity mandates. Iain is also responsible for a significant portion of Newton‟s pooled balanced portfolios.

James Harries

James is a member of the Real Return team, a global manager specialising in our global higher income and real return strategy. He joined Newton in 1995 and is a

member of the global investment and global model groups. Additionally, he worked at Veritas Asset Management between 2004 and 2005, where he established and

managed a global income fund.

Matthew Brown

Matthew is a global funds manager and a member of the Real Return team. He is also a member of both the multi asset and European equities groups. Since

joining the Newton multi asset team in 2000, Matthew has acquired varied experience in a range of mandates including multi asset, global equity and absolute return

portfolios. He is a chartered financial analyst (CFA).

Aron Pataki

Aron is a risk strategist for the Real Return strategy, with a particular focus on the use of derivatives and hedging. He joined Newton in 2006 as a member of the

portfolio analytics team, where he was responsible for risk analysis and portfolio construction across Newton‟s institutional and retail portfolios. Previously, he worked

as a quantitative analyst at Lacima Group.

Suzanne Hutchins

Suzanne Hutchins rejoined Newton in 2010 as global investment manager and member of the Real Return team. She moved to Capital International in 2005 as

Investment Specialist for global equity, income and absolute return based strategies. She had additional client facing responsibility for ESG (Environmental, Social

and Governance) issues. Suzanne joined Newton in 1991 as a research analyst after completing a BA (Hons) at University College London. During her 14 years with

Newton, she worked closely with Stewart Newton before becoming lead on the UK and Intrepid team. She managed multi-asset, global equity mandates and RPI+

based strategies for institutional and retail clients.

26

Investment team Overview at April 2011

Notes

Chart illustrates primary responsibilities. Regional fund management teams combine portfolio management with regional research responsibilities. 1 Combined Global Research/Investment Management roles. 2 Corporate Governance / SRI. 3 Combined Investment Management / Specialist Research. 4 Specialist Research. 5 Derivatives

Helena Morrissey

Chief executive officer

Jeff Munroe Chief investment officer

Simon Pryke

Head of private clients &

charities

Andrew Downs

Chief operating officer

Matt Duncan Head of business

strategy

Roger Wilkinson Investment leader,

global research

Campbell Watterson Deputy chief investment

officer

Chris Rexworthy Chief risk and

compliance officer

Strategy

Tim Wilson1

Peter Hensman

Douglas Reed

Credit

Howard Cunningham1

Parmeshwar Chadha1

Scott Freedman

Martin Chambers

Specialists

Paul Flood5

Aron Pataki5

Sophia Whitbread4

Yuko Takano4

Roger Wilkinson

Rosie Bichard

Duncan Bulgin

Robert Canepa-Anson

Tracey Dominick

Charles French

Robert Gullett

Paul Schenk

Christopher Smith

David Stephenson

Jeremy Stuber

Charles Whall

Ian Burger2

Amanda Young2

Elly Irving2

Gemma Kingsley

Tim Lucas

Jonathan McMullan

Fatemah Naraghi

Michael Plotkowiak

Russell Pointon

Stephen Rowntree

Robert Shelton Tineke Frikkee

Simon Nichols Ben Russon

Paul Stephany

Caroline Mair + International

Caroline Tye + Onshore

Mike Connor + Edinburgh

Aidan Butler + Leeds

Richard Wilmot

Gemma Woodward

Hilary Meades

James Korner

Peter Henderson

Wilfred Frost

Ian Enslin

Christopher Metcalfe

Robert Stewart

Paul Markham

James Harries

Matthew Brown Nick Moss

Jon Bell

Iain Stewart

Jeff Munroe

Robert Hay Charlotte Ryland

Suzanne Hutchins

Terry Coles

Rob Marshall-Lee3

Nick Clay

Alan Goodwin

Uzo Ekwue

Oliver Larminie

Paul Brain

Carl Shepherd

Howard Cunningham1

Jonathan Day

Parmeshwar Chadha1

Trevor Holder

Scott Freedman

Martin Chambers

US

Simon Laing

Emily Fletcher

Asia Pacific

Europe

Zoe Kan

Jason Pidcock

Caroline Keen

Thomas Beevers

Fred Moore

Rajesh Shant

Naomi Waistell

27

Newton Real Return Fund Performance contribution by asset class

5 years to 31 December 2009

-10

0

10

20

30

40

50

60

70

80

Dec-04 Oct-05 Aug-06 Jun-07 Apr-08 Feb-09 Dec-09

(%)

Equities Bonds Cash & currency Derivative Instruments Commodities Total fund

Annualised performance

Real Return +11.76%



Source: Newton, gross of fees

Different investments take the strain in different environments

28

Newton Real Return Fund (£) Longer term results

„Equity like‟ performance with lower volatility

Source: Newton, as at 31 March 2011, total return, gross of management fees, gross income reinvested

Figures are based on sterling returns. Past performance is not a guide to the future

Please remember that the value of shares and the income from them can fall as well as rise and

investors may not get back the full amount originally invested. †Restyle date

From 1 April 2004† to 31 March 2011

Real Return Fund

MSCI World NDR

UK Govt All Stocks LIBOR +4% UK RPI +5%

Total return (cumulative) 123.74 65.83 42.61 70.24 76.29

Total return (annualised) 12.19 7.47 5.18 7.87 8.41

Observed2 volatility (annual) 9.05 17.16 5.74 0.30 1.72

Sharpe ratio1 0.94 0.22 0.25

Algorithmics to 31 March 2011

Predicted volatility2 (annual) 5.5% 10.4% 6.7%

Value at risk3 – (annual) 8.8% 17.1% 11.2%

Value at risk – (monthly) 2.6% 4.9% 3.2%

Key

1. Return less risk

free rate

(LIBOR 1

month) divided

by standard

deviation

2. Standard

deviation

3. Value at risk:

worst case of

95% confidence

(normal

distribution

assumed)

Ex

Po

st

Ex

An

te

29

Newton Real Return Fund Calendar year results (since inception)

* 31 March 2004 to 31 December 2004

Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

The value of overseas securities will be influenced by fluctuations in exchange rates.

Source: Newton, as at 28 February 2011, gross of fees, COB prices

14.5

17.1

9.3

15.8

6.1

10.9 10.6

0.4

12.2

6.6

9.0 9.110.3 9.5

4.9 4.5

0.8

7.97.0

22.4

5.37.2

-17.9

15.7 15.3

7.5

1.9

-20

-15

-10

-5

0

5

10

15

20

25

2004* 2005 2006 2007 2008 2009 2010 2011 YTD Since

Inception

(%)

Newton Real Return LIBOR plus 4% MSCI World (NDR)

30 30

BNY Mellon Global Real Return Fund (EUR) Positioning

Source: Newton as at 31 March 2011

Portfolio holdings are subject to change at any time without notice, are for information purposes only and should not be construed as investment recommendations

Credit rating (% of credit exposure) Bond Sector breakdown (% of credit exposure)

Average maturity

(Years)

Investment grade 10.25

High Yield 5.17

Corporate bond positioning

6.59

11.39

35.66

0.90

45.45

A

BBB

BB

B

CCC & Below

11.52

9.24

3.97

1.53

73.74Industrial

Telco/Utility

Financial

Govt/Agency

Asset Backed

31

Newton Real Return Fund Distribution of weekly returns as at 31 March 2011

Newton Real Return

0

20

40

60

80

100

120

140

<-5

-4 to

-5

-3 to

-4

-2 to

-3

-1 to

-2

0 to

-1

0 to

1

1 to

2

2 to

3

3 to

4

4 to

5

>5

Fre

quency

MSCI World NDR index

0

20

40

60

80

100

120

140

<-5

-4 to

-5

-3 to

-4

-2 to

-3

-1 to

-2

0 to

-1

0 to

1

1 to

2

2 to

3

3 to

4

4 to

5

>5

Fre

quency

Source: Newton, weekly data, total return, gross of management fees, gross

income reinvested, since inception (1 April 2004 )

Weekly returns (%)

Narrower, less volatile return profile than global equities

32

Newton Real Return Fund (£) Relaunch (1 April 2004) to 31 March 2011

Figures are based on sterling returns. Past performance is not a guide to the future.

Please remember that the value of shares and the income from them can fall as well as rise and investors may not get back the full amount originally invested

Source: Newton, weekly data, total return, gross of management fees, gross income reinvested

Investment results

-20

0

20

40

60

80

100

120

140

Mar-

04

May-0

4

Jul-04

Sep-0

4

Nov-0

4

Jan-0

5

Mar-

05

May-0

5

Jul-05

Sep-0

5

Nov-0

5

Jan-0

6

Mar-

06

May-0

6

Jul-06

Sep-0

6

Nov-0

6

Jan-0

7

Mar-

07

May-0

7

Jul-07

Sep-0

7

Nov-0

7

Jan-0

8

Mar-

08

May-0

8

Jul-08

Sep-0

8

Nov-0

8

Jan-0

9

Mar-

09

May-0

9

Jul-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Jul-10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

Newton Real Return (gross of fees 1.0%) FTSE Govt. All-Stocks MSCI World NDR LIBOR 1 Month +4% p.a. UK RPI +5% p.a.

33

The benefits of appointing Newton

● Managing money is Newton's sole business

● Global specialists since Newton's inception

● Integrated single portfolio management a key strength for global target return mandates

● An investment process that has been in place for 30 years

“The first rule is not to lose money. The second rule is not to forget the first rule” – Warren Buffett

34

Idea generation How themes influence investment selection

Source: Newton 28 February 2011

Information is for illustrative purposes only and should not be construed as investment recommendations.

Theme

The inflation/deflation debate. The credit crisis is deflationary, but the response to the crisis could ultimately be inflationary and the developing world’s disinflationary impetus may be waning.

Consequences

Commodity influenced

currencies;

Australian $,

Norwegian Krone

Real assets

(Gold ETF,

Agriculture ETF)

Index-linked gilts

Corporate index-linked

Commodity related corporate

debt

Norwegian bonds (oil)

Government bonds generally

+ Food retailers

+ Gold/energy/commodity related stocks

CurrencyOtherFixed IncomeEquity

Consequences

Commodity influenced

currencies;

Australian $,

Norwegian Krone

Real assets

(Gold ETF,

Agriculture ETF)

Index-linked gilts

Corporate index-linked

Commodity related corporate

debt

Norwegian bonds (oil)

Government bonds generally

+ Food retailers

+ Gold/energy/commodity related stocks

CurrencyOtherFixed IncomeEquity

+ ++

+

+

+

+

+

––

35

Portfolio positioning

Source: Newton, January 2011

In a lower growth world, with more volatility,

investors should prize both growth and stability. At

the current time large capitalisation, diversified and

relatively defensive equities are selling at attractive

valuations.

Extremely selective in financials. Avoid

those challenged by government

interference.

The “all change” world will continue to pressure

financials. Divergent performances likely to yield

stock selection opportunities.

Focus on healthcare, telecoms,

selected technology areas and staples.

Developing world continue to have attractions in

terms of growth and fiscal positions. Low western

interest rates will continue to encourage capital

flows into these economies.

Selected developing economy exposure

The effort to reflate western economies with QE

type policies will continue to underpin demand for

‘real assets’. Longer term demand fundamentals

and real supply challenges in various resources

will continue to present opportunities.

Energy, commodities and basic

industries and their infrastructure

36


• Very strong, under levered balance

sheet and free cash flow positive

• Revenue growth of 9% expected

for 2011

• Pure play Mobile telecoms operator

in Latin America, Africa & Asia.

• Current low level of Mobile and

Fixed telephony penetration in

Africa & Asia gives great growth

potential for many years to come.

• Strong strategy which focuses on

brand and offering “Value” to

customer is well suited to current

tough economic environment.

• Strong management & balance

sheet means will be a survivor

Stock example: MTN


Source: Newton as at April 2011


37


• Senior secured paper

• Senior leverage of 2.7x net debt

/ EBITDA

• Running yield 8.5%

• One of the largest integrated chemical companies

• Broadly diverse operations including O&P, refining and chemical intermediaries

• Strong cash flow generation

• Committed to deleveraging

As at April 2011


Stock example: INEOS



38

Important information

This is a financial promotion and is not intended as investment advice. The information provided within is for use by professional investors and should not be relied upon by retail investors.

All information relating to Newton Investment Management Limited (Newton) and BNY Mellon Global Real Return Fund (EUR) has been prepared by Newton for presentation by BNY Mellon Asset Management International Limited (BNYMAMI). Any views and opinions contained in this document are those of Newton at the time of going to print and are not intended to be construed as investment advice. BNYMAMI and its affiliates are not responsible for any subsequent investment advice given based on the information supplied.

This document may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised.

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested.

The Prospectus and/or Simplified Prospectus should be read before an investment is made. The investment objectives and policies for each sub-fund are outlined in the Supplements to the Prospectus. This document can be obtained from BNY Mellon Global Management Limited, 33 Sir John Rogerson‟s Quay, Dublin 2, Ireland.

To help us continually improve our service and in the interest of security, we may monitor and/or record your telephone calls with us.


Tax treatment will depend on the individual circumstances of clients and may be subject to change in the future.

All rankings based on worldwide assets under management for The Bank of New York Mellon Corporation as at 31 December 2009, unless otherwise stated. Provisional AUM has been provided by each asset manager as at 31 December 2010. Total AUM includes the asset managers outlined in this presentation as well as BNY Mellon Wealth Management and external data.

The Bank of New York Mellon Corporation holds 94% of the parent holding company of Alcentra group, a 19.9% minority interest in The Hamon Investment Group Pte Limited, the parent company of Hamon Asset Management Limited, a 20% minority interest in Siguler Guff & Company LLC and certain related entities and a 50:50 joint ownership with WestLB AG in WestLB Mellon Asset Management. BNY Mellon Beta Management is a division of The Bank of New York Mellon, a wholly-owned banking subsidiary of The Bank of New York Mellon Corporation. BNY Mellon Cash Investment Strategies is a division of The Dreyfus Corporation. AUM outlined for Newton represents the aggregate AUM of the following affiliated companies: Newton Investment Management Limited, Newton Capital Management Limited, Newton International Investment Management Limited and Newton Fund Managers (CI) Limited. BNY Mellon ARX is the brand used to represent the Brazilian investment capabilities of BNY Mellon ARX Investimentos Ltda. The investment company dedicated to the management of any particular investment will depend on the strategy and domicile of the investment.

BNY Mellon Global Funds, plc is an open-ended umbrella type investment company with variable capital (ICVC) and segregated liability between sub-funds, incorporated with limited liability under the laws of Ireland. It qualifies and is authorised in Ireland by the Central Bank of Ireland as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (S.I. No 211 of 2003), as amended. The Manager of BNY Mellon Global Funds, plc is BNY Mellon Global Management Limited. BNY Mellon Global Management Limited, 33 Sir John Rogerson‟s Quay, Dublin 2, Ireland. The Manager is approved as a management company and regulated by the Central Bank of Ireland under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (SI No 211 of 2003), as amended. The Global (ex. US) Distributor of BNY Mellon Global Funds, plc is BNY Mellon Asset Management International Limited.

ICVC investments should not be regarded as short-term and should normally be held for at least five years.

Changes in the rates of exchange may affect the value of investments. The Fund can invest in overseas securities which may also generate profits overseas and pay dividends in foreign currencies, which means the fund is exposed to changes in currency rates. The Fund may invest in emerging markets. It should be noted that these markets have additional risks associated with local custody and registration practices that may be less developed than more mature markets. The Fund takes its charges from the income of the Fund. The impact of Fund charges may be material on the value of any income you receive from your investment. There is potential for future capital erosion if insufficient income is generated by the Fund to cover these charges. The Fund may hold sub-investment grade bonds that typically have a low credit rating and carry a high degree of default risk, which can affect the capital value of your investment. The Fund may hold fixed interest securities, which are particularly affected by trends in interest rates and inflation. This may affect the capital value of your investment.

39

Important information

The Fund may invest in illiquid securities, which means that there is a possibility that they cannot be readily converted into cash when required. The value of these securities is subject to greater fluctuation if they are not regularly traded. All of the sub-funds may use derivatives for efficient portfolio management (EPM) purposes. EPM restricts the use of derivatives for the reduction of risk, the reduction of cost and the generation of additional capital or income with no or an acceptable low level of risk. EPM transactions must be economically appropriate and the exposure fully covered. The Fund will, additionally to EPM, make use of the expanded regulations and use derivatives in pursuit of their investment objectives. All of these factors may affect the performance of the Fund.

Newton Real Return Fund

Newton Real Return Fund is a sub-fund of BNY Mellon Investment Funds, an investment company with variable capital (ICVC) incorporated in England and Wales under registered number IC27 and authorised by the Financial Services Authority. BNY Mellon Fund Managers Limited (BNY MFM) is the Authorised Corporate Director. BNY Mellon Fund Managers Limited, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1998251. Authorised and regulated by the Financial Services Authority. The investment adviser of the Newton sub-funds is Newton Investment Management Limited. BNY Mellon Investment Funds is a collective investment vehicle ("Institución de Inversión Colectiva") that is duly registered by the Comisión Nacional del Mercado de Valores on the Register of foreign Collective Investment Institutions commercialised in Spain (“Registro de Instituciones de Inversión Colectiva extranjeras comercializadas en España”) under the number 186. BNY Mellon Fund Managers Limited (BNY MFM) and Newton Investment Management Limited are members of the IMA.

Changes in the rates of exchange may affect the value of investments. The Fund can invest in overseas securities which may also generate profits overseas and pay dividends in foreign currencies, which means the Fund xposed to changes in currency rates. The Fund may invest in emerging markets. It should be noted that these markets have additional risks associated with local custody and registration practices that may be less developed than more mature markets. The Fund takes its charges from the capital of the fund. Investors should be aware that there is potential for future capital erosion if insufficient capital growth is achieved by the Fund to cover the charges. Capital erosion may result in the amount of income that can be drawn declining over time. The Fund may hold sub-investment grade bonds that typically have a low credit rating and carry a high degree of default risk, which can affect the capital value of your investment. The Fund may hold fixed interest securities, which are particularly affected by trends in interest rates and inflation. This may affect the capital value of your investment. The Fund may invest in illiquid securities, which means that there is a possibility that they cannot be readily converted into cash when required. The value of these securities is subject to greater fluctuation if they are not regularly traded. The Fund may use derivatives for efficient portfolio management (EPM) purposes. EPM restricts the use of derivatives for the reduction of risk, the reduction of cost and the generation of additional capital or income with no or an acceptable low level of risk. EPM transactions must be economically appropriate and the exposure fully covered. In addition to EPM, the Fund uses derivatives in pursuit of its investment objectives. All of these factors may affect the performance of the Fund(s).

In Switzerland, BNP Paribas Securities Services, Paris, succursale de Zurich acts as representative agent and paying agent for BNY MGF. The Prospectus, Simplified Prospectus, Articles of Association, Annual Report and Semi-Annual Report may be obtained free of charge from their offices at Selnaustrasse 16, 8002 Zurich, Switzerland. BNY Mellon Global Funds, plc is a collective investment vehicle ('Institución de Inversión Colectiva') that is duly registered by the Comisión Nacional del Mercado de Valores on the Register of foreign Collective Investment Institutions commercialised in Spain ('Registro de Instituciones de Inversión Colectiva extranjeras comercializadas en España') under the number 267.

This document is issued in the UK and mainland Europe (excl Germany) by BNY Mellon Asset Management International Limited. BNY Mellon Asset Management International Limited, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Services Authority.

BNY Mellon Asset Management International Limited, BNY Mellon Global Management Limited (BNY MGM), Newton and any other BNY Mellon entity mentioned are all ultimately owned by The Bank of New York Mellon Corporation.

CP6646-28-04-2011 (3M)

Grr eur ppt citywire conference 11_13_05_2011(paper)_final_09052011

Documents

london ec4v 4la

university college london

financial services authority

exposure fully covered

generate profits overseas

including private equity

york mellon corporation

low credit rating