Jupiter

Citywire Private Client Manager Retreat 2012

May 2012

Conservative multi-asset investing

Thursday 17th May – Friday 18th May 2012

Institutional investors and advisors only

Presented by:

Miles Geldard – Fund Manager

Louis Wood – Business Development Director, UK Wealth Management

FOR PROFESSIONAL AUDIENCES ONLY. NOT FOR RETAIL INVESTORS.

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89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 110%

2%

4%

6%

8%

10%

12%

14%

UK CPI YoY UK 10 Year Gilt

Avoiding fixed allocations in over-valued assets

The problem for many funds during the previous decade was… too much in equities

Will the problem in this decade be… too much in bonds?

Source: Bloomberg, 31.03.89 to 31.12.11.

Bonds should come with a warning label

Warren BuffettReal interest rates are -2.2%

Flexibility to move between asset classes

Where absolute return sits within the investment universe

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Target Risk

Target Return

Money Market & Liquidity Funds

Lower Risk Absolute Return

Funds

Traditional Gov’t Bond Funds

Corporate Bond Funds

Traditional Equity & Higher Risk Absolute Return Funds

High Yield & Emerging Equity

Funds

Diversified core investments

Aggressive funds enhancing portfolio returns

Cash reserves & cautious section of portfolio

Absolute return can be a complementary fit with traditional investments

Jupiter Strategic Total Return (STR)

Multi-asset strategy that has evolved since 1998

Global multi-asset portfolio with focus on capital growth

Seeking cash +3% over a rolling 3 year basis*

Target volatility <5%

Wide opportunity set of direct investments

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Global Multi-Asset

PortfolioConvertibles

Equities

Corporate bonds

Money markets

Currency

Sovereign bonds

*Fund Manager aim

The portfolio managers

Managed multi-asset portfolios for 14 years

Previously head of strategic and tactical asset allocation at JP Morgan

Proven track record in bonds, currencies, equities and convertibles

Hands-on experience working in Asia, Africa, Middle East and Europe

Industry recognition: Sauren gold medal winners 2009 and 2011 (Germany)

Proven team with long experience in different regions and markets

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Fund Manager:

Lee Manzi

Head of Team & Fund Manager:

Miles Geldard

Past performance should not be seen as a guide to the future. The awards detailed above were based on the managers’ past performance figures which are a representation of the fund manager’s experience and are not necessarily indicative of the potential performance of the Jupiter Strategic Total Return SICAV or Jupiter Strategic Reserve UT.

Source: Bloomberg in USD. Past performance should not be seen as a guide to the future. The JF Pacific Income fund was not a UCITS scheme, and therefore not subject to the same regulatory framework as the Jupiter Global Fund. The performance figures of these funds are shown as a representation of the fund manager’s experience and are not necessarily indicative of the potential performance of the Jupiter Strategic Total Return SICAV.

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Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03-40

-20

0

20

40

60

80

100

120

140

JPM Pacific Balanced / JF Pacific Income Fund 122.22 MSCI AC Pacific 30.48

% G

row

thPortfolio management process has evolved over 14 years

JPM Pacific Balanced Fund (previously named JF Pacific Income Fund)

1999 % 2000 % 2001 % 2002 % 2003 %

Fund 44.8 -1.5 9.3 2.6 30.8

MSCI Pacific 57.6 -25.8 -22.1 -8.9 39.8

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Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2.5

1.6

Jupiter - JGF Strategic Total Return I Acc EUR in EU 2.5 EURIBOR 1M TR in EU 1.6

Fund Return Cash Benchmark Fund Volatility Max. Drawdown

2005 6.8% 2.2% 1.9% 1.3%

2006 – March 0.4% 0.6% 2.9% 1.0%

2007 6.2% 4.2% 2.1% 1.2%

2008 0.9% 4.5% 2.1% 2.7%

2009 – November 4.1% 0.9% 0.9% 0.4%

2011 0.4% 1.2% 2.0% 1.2%

2012 – 31 March 1.7% 0.2% 2.1% 0.8%

Fund volatility since inception: 2.1%

Jupiter Strategic Total Return

Strategy track record

Track record of low volatility and minimizing drawdowns

Note: Funds shown are JPMorgan Global Capital Preservation 2005-March 2006, RWC Strategic Reserve 2007-November 2009, Jupiter Strategic Total Return 2011 - Source: Jupiter / FE, I Share Class (EUR), gross income reinvested, net of fees from 01.10.10 to 31.03.12. Past performance should not be seen as a guide to the future.

Fund manager support and idea sharing

Speed of decision making and flexibility within global fund manager

Jupiter is a highly regarded and established firm in UK since 1985

Substantial employee ownership aligns our interests with yours

No investment committees or mandatory house views

But… active discussion of macro and micro with experienced managers

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Multi-Asset and Fixed Income team

Jupiter Merlin Fund of Funds

team

Emerging Equity team

Financials team

Developed Equity teams

Our investment philosophy

Long term, value driven

Flexible asset allocation within global opportunity set

Agnostic to asset class – aim to choose assets with best risk-reward to implement views

Maximum limits, no minima, no neutral positions

If a core asset class is overvalued, then have none

No funds* or structured products

Conservative strategy seeking asymmetric return profile

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*The fund may invest in money market funds for cash management purposes.

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Top down macro views combined with bottom up security selection

Asset allocation decisions

Formal monthly review of a range of macro factors

Proprietary value driven equity screening model

Jupiter Equity and Fixed Income Managers

Security selection

Quantitative screening of global opportunity set

Followed by qualitative research of short list

Flexibility in choice of investment instrument to implement view

Long term strategic views across assets, regions and sectors

Opportunistic and agnostic to asset class, geography and sector

Seeking most favourable risk-reward themes

Active discussion / interaction with macro thinkers in Jupiter

Proprietary credit scoring models

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Portfolio construction, risk controls and limits

Position sizing

Position size dependent on:

Conviction of view

Volatility of security

Liquidity of security

Diversification from other holdings

Stress testing of positions and portfolio

Based on real world experience learnt over a number of market cycles

Equity: Bonds: Currency:

Maximum 40% (including CB delta)

Highly diversified holdings

Maximum 5 year duration

Average implied credit quality investment grade, albeit with no credit limitation on individual issues

Maximum non-base currency 30%

Lower exposures on single cross currency positions

Target volatility <5%

Focus on liquidity and traded securities

Portfolio transparency

These are not fund limits, but represent fund manager style.

0.12%0.04%

0.10%

0.07%

0.04%

0.12%

0.07%

0.08%

0.14%

Strategic Total Return – risk budget

Strict risk budgeting for each position and portfolio

Stop loss disciplines

Maximum limits but no minima

Blend of traditional strategies with relative value

Seeking uncorrelated positions

Diversified, liquid portfolio:

9 strategies

78 securities

Risk budgeting – Absolute VaR per strategy

Source: Jupiter 20.03.12. Note: The VaR shown is the 99% 1-day VaR for the strategy in isolation weighted by the position size - it does not take into account the correlations between strategies and so overstates the risk in the portfolio. The total portfolio 1-day 99% VaR is 0.23%.

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Long S&P Short Russell

Equity

Convertible Bonds

Financial + Corporate Debt

Sovereign Debt

Short Sovereign Bond Futures

Long MXN Short ZAR

Long USDShort AUD

Long USDShort JPY

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Jupiter Strategic Total Return (STR)

Lower risk fund

Proven investment approach

Experienced and established team

Flexible asset allocation

Diversified portfolio

Low correlation to traditional asset classes

Transparent portfolio

Appendix

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Portfolio positioning

Currency exposure: Deviation from base currency

Current portfolio positioning

Asset allocationKey characteristics

Fund size €124m

Net equity exposure (including hedges) 7%

YTM/P 1.04%

Current yield 2.5%

Modified duration 0.3 years

Average explicit credit rating A+

Average implied credit rating A

No. securities 80

Fund volatility 1.9%

Source: Jupiter as at 31.03.12.

Sov

erei

gnbo

nds

Cor

pora

tebo

nds

Bon

dFu

ture

Con

vert

ible

bond

s

Equ

itie

s

-20%

-10%

0%

10%

20%

30%

40%

USD MXN HKD Other EUR JPY AUD ZAR

-6%

-4%

-2%

0%

2%

4%

6%

8%

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Interest rate exposure by maturity (duration)

0-1 1-3 3-5 5-7 7-10 10+

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7 EUR USD GBP JPY HKD

Yea

rs

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Flexible exposure to asset classes based on macro-economic insights. Aims to avoid over-priced assets

Bottom up security selection: Equity, convertible, credit

Equity-related: Regional and sectoral thematic bets

Interest rate:

Duration positioning

Relative value; inter / intra yield curve

Forex: Non core, reserved for long term structural anomalies

Futures used for hedging and relative value strategies

Options: Premium paid to improve asymmetric return profile

Sources of return

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UK is highly indebted

Combining government, business, bank and household debt reveals the true scope of a country’s obligations

Source: ZeroHedge 23.11.11.

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“There’s too much froth in the Australian currency” RBA board member

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

Australian govt bond foreign ownership AUDUSD

Au

stra

lian

go

vt.

bo

nd

fo

reig

n o

wn

ersh

ipA

UD

/US

D F

X R

ate

Source: Reserve Bank of Australia, Bloomberg 31.12.11.

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Japan is a rentier economy

Source: MizuhoSecurities, Japan MOF.

85 87 89 91 93 95 97 99 01 03 05 07 090%

20%

40%

60%

80%

100%

120%

140%

160%

180%

Trade balance ratio Income ratio

Contribution from trade balance and the income to the current account

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Bank of Japan is now explicitly targeting 1% inflation

Source: Bloomberg, 2011.

87 89 91 93 95 97 99 01 03 05 07 09 11-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Jap

an C

PI

Infl

atio

n

Japanese CPI

The portfolio managers – biographies

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Proven, experienced investment team with award winning track record

Lee ManziFund Manager

Lee started his fund management career at JP Morgan Asset Management (formerly Flemings) in 1998, working in the fixed income team. After spells working on the European fixed income team and UK desk, he took over the management of the firm’s UK Sterling accounts before joining the Global Portfolios Group in 2001 where he managed the fixed income portion of the balanced funds

He then worked in the Global Multi Asset Group with Miles, focusing primarily on fixed interest and convertibles

In 2006 he moved to MPC / RWC to work with Miles as a Portfolio Manager

Miles GeldardHead of Team & Fund Manager

In the 13 years prior to his appointment Miles built and managed global convertibles, fixed income and multi asset franchises. In 2009, he was recognised in the Sauren Awards with three gold medals in the convertibles category, two gold medals in the absolute return category and two gold medals in the multi strategy international category

Having spent much of his early career managing derivative teams in the Far East, Miles became an adviser on fixed income portfolio management and foreign exchange to the Central Bank of Botswana in 1994. In 1997 he joined JP Morgan Asset Management (formerly Jardine Fleming) in Hong Kong and became Head of Fixed Income, Currencies, Convertibles and Balanced

In 2004 Miles moved to London and became Chief Investment Officer and Head of the Global Multi Asset Group and Global Strategy Team at JP Morgan Asset Management. In addition to building the convertibles business, he also built and managed the JPM Capital Preservation Fund, a global multi asset absolute return fund. Miles left JP Morgan in 2006 to join RWC Partners (previously MPC Investors), where he founded and headed the multi asset and convertibles team

Past performance should not be seen as a guide to the future. The awards detailed above were based on the managers’ past performance figures which are a representation of the fund manager’s experience and are not necessarily indicative of the potential performance of the Jupiter Strategic Total Return SICAV or Jupiter Strategic Reserve UT.

Disclosure

Jupiter Asset Management Limited (‘JAM’) is registered in England and Wales (no. 2036243). The registered office is 1 Grosvenor Place, London SW1X 7JJ. JAM is authorised and regulated by the Financial Services Authority for business conducted in the UK whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS.

This presentation is intended for investment professionals and not for the benefit of private retail investors. However any one attending the presentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investments and the income from it can go down as well as up. It may be affected by exchange rate variations and you may not get back the amount invested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Quoted yields are not guaranteed. Current tax levels and reliefs will depend on the nature of the holding and details are contained in the key features documents. Past performance should not be seen as a guide to future performance.

This document contains information based on the MSCI AC Pacific and MSCI Pacific Indices. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

For your security we may record or randomly monitor all telephone calls. If. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given.

The Jupiter Strategic Total Return Fund can use derivatives to speculate as to the direction a market index, currency or share will move and can cause periods of high volatility. The Fund may incur losses greater than its initial investment into derivative contracts (although investors will not incur any liabilities beyond their initial investment). The Fund is able to gain market exposure in excess of its net asset value which can increase or decrease the value of units to a greater extent than would have occurred had no additional market exposure beyond the Fund’s net asset been in place. The Fund’s value is unlikely to mirror increases and decreases in line with the respective markets it is invested in to. Further information is contained within the simplified prospectus

This document is for information only. In particular, it does not constitute an offer or solicitation in any jurisdiction where it is unlawful or where the person making the offer or solicitation is not qualified to do so or the recipient may not lawfully receive any such offer or solicitation. It is the responsibility of any person in possession of this document to inform themselves, and to observe, all applicable laws and regulations of relevant jurisdictions. The information and any opinions contained herein have been obtained from or are based on sources which are believed to be reliable, but the accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss from this information.

3809_SCV_STRAT TOT RET.

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