barings final 2012 nma - multi asset fund presentation fa

Baring AssetManagement Limited155 Bishopsgate, London EC2M 3XY

Tel +44 (0)20 7628 6000Fax +44 (0)20 7638 7928

www.barings.com

Authorised and regulated by theFinancial Services Authority

Baring Multi Asset FundNew Model Advisers Conference

January 2012

For Professional Advisers only

2

Multi Asset FundThe Baring Multi Asset team

Team formed in 2002

Drawing on circa 91 investment professionals*

2007 launched Dynamic Asset Allocation Fund

2009 launched Multi Asset Fund

£5.0bn assets under management in the strategy as at 30th November 2011

Source: Barings as at 30th November 2011 * Investment Professionals as at 1st December 2011

3

Multi Asset FundOur approach

We target RPI+4% absolute returns within 70% of equity risk

Focus on dynamic asset allocation

Recognise that one disastrous year destroys several years’ growth

Source: Barings as at 20th October 2011

4

Multi Asset FundWhy RPI +4%

Source: Barclays Equity Gilt Study 2011, 1899 – 2010 (pg 107 & 126) * Cumulative ~ Annual

RPI + 4% = equity like returns with less risk

1

10

100

1,000

10,000

100,000

1,000,000

10,000,000

1899 1904 1909 1914 1919 1924 1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009

-60

-40

-20

0

20

40

60

80

100

120

140

UK equity returns (RHS) UK Equity Nominal TR Index (LHS) UK Cash + 4% Index (LHS) UK Cost of Living + 5% Index (LHS)

5

Source: Barings as at 31.11.11 * Provisional figures only, subject to changeNet of fees. Reference to the index is for comparative purposes only. The composite returns should be considered as supplemental information which complements the Multi Asset GBP Inflation/Cash Targeted Solutions: High Return Composite presentation as provided in appendix.

Multi Asset FundHas it worked?

Return (%) Risk (%)

Past performance is not a guide to future performance

Baring Composite FTSE All Share RPI +4%

9.88.4

7.4 7.8

14.6

0.5

Composite return & risk annualised: 1st January 2003 – 30th November 2011*

6

Multi Asset FundRisk/Return - Investor Reward

AB

CD

E

FG

-7.0

-6.0

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

3.0 4.0 5.0 6.0 7.0 8.0 9.0

Performance (%)

Ann. Volatility

Mean

Mean

Total Return Bid-Bid performance vs. volatility scatter chart over 12 months (from 31 Oct 2010 to 31 Oct 2011) from UK IMA UT and OEICs universe. Rebased in Pounds Sterling

Source: FE Analytics , 9th January 2012


Key Name Performance Ann. Volatility

A: Baring - Multi Asset A Inc TR in GB 0.69 3.97

B: Cazenove – Multi Manager Diversity A Acc TR in GB 0.43 4.36

C: Newton - Real Return TR in GB -0.35 6.08

D: Jupiter - Merlin Income Portfolio Acc TR in GB -0.63 7.01

E: Thames River - Distribution A Acc TR in GB -4.80 8.24

F: SWIP - MultiManager Diversity A TR in GB -5.56 7.66

G: Henderson - Multi Manager Income & Growth A TR in GB -6.05 7.71

7

Multi Asset Fund3 months that proved a process – July, August, September 2011

Customise Columns Custom Period Performance

Baring Multi Asset TR in GB -1.4

IMA Cautious Managed Sector Average -6.0

FTSE All Share -14.2

Source: Barings as at 20th October 2011


8

Multi Asset FundAvoiding a disastrous year is key!

17/01/2007

31/12/2007

01/01/2008

31/12/2008

01/01/2009

31/12/2009

01/01/2010

31/12/2010

01/01/2011

31/12/2011

17/01/2007

31/12/2011

Group/Investment Return Return Return Return Return Return

DAAF vs IMA Cautious Managed

Baring Dyn Asset Alloc I GBP 8.86 -5.44 20.23 10.29 1.47 38.50

IMA OE Mixed Investment 20-60%

Shares (Cautious Managed Sector)1.57 -15.68 16.32 9.08 -1.85 6.89

Dynamic Asset Allocation Fund vs. Cautious Managed

Source: Morningstar, 9th January 2012


9

Multi Asset FundRise of Baring Multi Asset Service

2009 Year End AUM £ 9.6m

2010 Year End AUM £25.0m

2011 Year End AUM £95.8m

£5.0bn in our inflation plus strategy (inc. Dynamic Asset Allocation & Multi Asset Funds)

Source: Barings as at 30th November 2011


Tel +44 (0)20 7628 6000Fax +44 (0)20 7638 7928

www.barings.com


Master ClassNew Model Advisers Conference

Andrew Cole

11

Philosophy & Approach

Active Management of asset allocation

- the most important generator of returns

Understanding Risk & Diversification

- recognising changing correlations & risk characteristics

Simple building blocks

- clear and transparent implementation

Seeking equity like returns with less risk than equities

Disciplined process with strong risk controls

12

Dynamic Asset Allocation Critical

Source: Barings as at 31st December 2011

The right asset class at the right time is key

2007 2008 2009 2010 2011

Emerging Equity 37.4 Overseas Bonds 58.1 Emerging Equity 59.4 Gold Bullion 33.4 Index Linked Gilts 23.3

Gold Bullion 29.6 Gold Bullion 42.8 Asia ex Japan 53.3 Asia ex Japan 24.0 UK Gilts 15.6

Asia ex Japan 29.0 UK Bonds 12.8 UK Equity 30.1 Emerging Equity 22.9 Gold Bullion 11.9

Europe Equity 15.3 Cash 4.7 Europe Equity 19.4 N. America Equity 19.0 Property 8.1

Overseas Bonds -7.5 Japan Equity -6.5 Emerging Equity -35.2 Overseas Bonds -9.7 Asia ex Japan -13.0

Japan Equity -7.4 Property -5.5 Asia ex Japan -31.3 Japan Equity -5.9 Japan Equity -13.1

UK Bonds 0.7 Corporate Bonds 1.8 UK Equity -29.9 UK Bonds -1.2 Europe Equity -15.2

Corporate Bonds 0.8 Hedge Funds 4.5 Europe Equity -24.4 Cash 0.5 Emerging Equity -17.6

13

Changes to asset allocation since inception

Source: Barings, as at 31st December 2011, Gross ExposureDAA Inception date: 16th January 2007; MAF Inception date: 20th March 2009*Themed Fixed Fund composition: Aug ’07-Feb ’08: 0-3yr Ster bonds. Mar ’09-June ’10: Overseas ILGovt; Aug 10-to date: EMD

0

20

40

60

80

100

31-J

an-0

7

21-M

ar-0

7

30-J

un-0

7

28-S

ep-0

7

31-D

ec-0

7

31-M

ar-0

8

30-J

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8

30-S

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8

31-D

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8

31-M

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9

30-J

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9

30-S

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9

31-D

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9

31-M

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30-J

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31-D

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0

31-M

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1

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1

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1

31-M

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9

30-J

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31-D

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9

31-M

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30-J

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31-D

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0

31-M

ar-1

1

30-J

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1

30-S

ep-1

1

31-D

ec-1

1

(%)

UK Equity Overseas Equity UK Gilts Overseas Govt Bonds Corporate/Convertible Bonds Themed Fixed Fund* Property Alternatives Cash/Near Cash

Dynamic Asset Allocation Fund Multi Asset Fund

14

Macro Matters

Source: Barings as at 31st December 2011

The economy will tell you a lot about earnings

Global Growth

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Dec-79 Dec-84 Dec-89 Dec-94 Dec-99 Dec-04 Dec-09 Dec-14-120.0%

-70.0%

-20.0%

30.0%

80.0%

12mth Change in MSCI World Earnings (RHS)

15

Current Issues

European Growth to remain weak

USA & UK retain some flexibility

China Adjusting only, slowly

Financial Repression keeps bond yields low and equities seemly cheap but volatile

Who – credit and at what prices and important discipline

More fixed income like assets available

Diversification tricky

Source: Barings as at 12th December 2011

Markets to remain volatile still!

16

Choosing the best investments pragmatically

No obligation to buy Barings

No double charging on Barings funds-100% rebate on long only funds

Large, liquid third party alternatives and property

Index funds if active managers underperform

Source: Barings as at 12th December 2011

Simple & transparent building blocks

17

What’s different about Barings?

Active Management of asset allocation

- the most important generator of returns

Understanding Risk & Diversification

- recognising changing correlations & risk characteristics

Simple building blocks

- clear and transparent implementation

Pragmatic, consistent delivery

18

What are you being paid to own an asset class?

UK Asset Class Risk Premia , January 2012Government Bonds Breakeven Inflation Rates Credit SpreadsInflation Linked Bonds

2.8

3.3

3.8

4.3

4.8

2.3

2.5

2.7

2.9

3.1

3.3

3.5

3.7

3.9

4.1

64

114

164

214

264

314

364

414

464

514

564

614

-0.2

0.3

0.8

1.3

1.8

2.3

Source: Barings, January 2012

19


EquitiesERP Tradeoff

Current Consensus Consensus - 1 Year(s) Ago Consensus - 5 Year(s) Ago

Current Tradeoff Tradeoff - 1 Year(s) Ago Tradeoff - 5 Year(s) Ago

0.25%

2.25%

4.25%

6.25%

8.25%

10.25%

12.25%

-60% -40% -20% 0% 20% 40% 60% 3%

4%

5%

6%

7%

UK Asset Class Risk Premia , January 2012


20


2.7

3.2

3.7

4.2

4.7

5.2

5.7

0.5

1.0

1.5

2.0

2.5

72

122

172

222

272

322

372

422

472

522

572

622

672

0.5

1.0

1.5

2.0

2.5

3.0

3.5

US Asset Class Risk Premia , January 2012Government Bonds Breakeven Inflation Rates Credit SpreadsInflation Linked Bonds


21


Equities



ERP Tradeoff

1.25%

1.75%

2.25%

2.75%

3.25%

3.75%

4.25%

4.75%

5.25%

5.75%

6.25%

-60% -40% -20% 0% 20% 40% 60% 1%

2%

3%

4%

5%

6%


US Asset Class Risk Premia , January 2012

22


3.5

4.0

4.5

5.0

5.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

3.3

40

90

140

190

240

290

340

390

1.0

1.5

2.0

2.5

3.0


Europe Asset Class Risk Premia , January 2012Government Bonds Breakeven Inflation Rates Credit SpreadsInflation Linked Bonds

23


EquitiesERP Tradeoff

0.25%

2.25%

4.25%

6.25%

8.25%

10.25%

12.25%

-60% -40% -20% 0% 20% 40% 60% 3%

4%

5%

6%

7%

8%

9%




Europe Asset Class Risk Premia , January 2012

24

Current Portfolio & Themes (as at 31st December 2011)

Baring Multi Asset Fund

Source: Barings as at 31st December 2011 Risk = standard deviation of annualised return from asset allocation

Predicted Risk* 5.55%

Fixed Income 47%

Alternatives 14% Cash 13%

UK Equities 20%

Intl Equities 7%

UK Equity 19.8

Direct 15.7

Third party 4.1

International Equity 7.2

Global Equity

In house 5.8

Third party 0.5

Emerging Equity

In house 0.9

Alternatives 13.6

Fund of Hedge Funds / Private Equity

Third party 0.2

Commodities

Gold ETC 9.3

Portfolio Insurance

Direct 0.5

Property

In house 0.6

Third party 3.1

Cash 12.6

Fixed Income 46.9

Emerging Market Debt

In house 1.9

Corporate Debt

In house 3.0

Third party 3.3

Convertible Bonds

Third party 2.3

Australian Bonds

Direct 18.8

US Gov’t

Direct 14.3

Canadian Gov’t

Direct 3.3

Third Party: 23%

In-House: 12%

Direct: 53%

Cash: 13%

Total: 100%


Tel +44 (0)20 7628 6000Fax +44 (0)20 7638 7928

www.barings.com


Appendix

26

Baring Multi Asset Targeted ReturnComposite Performance as of 30th September 2011

The Firm’s claim of GIPS compliance has been verified by our Independent Examiners (KPMG Audit plc) for the period from 1st July 1999 to 31st December 2010. Inception of the Firm is 1st July 1999. KPMG’s opinion is available upon request. The firm as defined herein, has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). A complete list and description of all composites is available on request by sending an email to [email protected]

27

Baring Multi Asset Targeted ReturnComposite Performance as of 30th September 2011

The Firm’s claim of GIPS compliance has been verified by our Independent Examiners (KPMG Audit plc) for the period from 1st July 1999 to 31st December 2010. Inception of the Firm is 1st July 1999. KPMG’s opinion is available upon request. The firm as defined herein, has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). A complete list and description of all composites is available on request by sending an email to [email protected]

Composite Multi Asset: GBP Inflation / Cash Targeted Solutions: High Return

For the purpose of GIPS compliance, the “Firm” is defined as the investment firm Baring Asset Management Limited (and its relevant subsidiaries which are registered with the appropriate regulatory authorities to undertake investment business in those jurisdictions in which they operate) and Baring Asset Management LLC from 31st December 2010, Baring Asset Management Inc. prior to 31st December 2010, (together hereinafter referred to as “the Firm”).

At 27th May 2011 the Private Client Business, comprising both Onshore and Offshore private clients was sold to SG Hambros. From this date all Private Client portfolios that were transferred to SG Hambros (or are in the process of being transferred to SG Hambros) and those Private Client portfolios that have terminated (or are in the process of being terminated) were excluded from the "Firm" as defined herein. This is disclosed as a significant event for the purposes of the GIPS standards.

Performance results are total, time-weighted and calculated monthly. Gross-of-fee performance results are presented before management and custody fees but after transaction costs and non-reclaimable foreign withholding taxes. Net-of-fee performance results are presented after management fees, transaction costs and non-reclaimable foreign withholding taxes but before custody fees with the exception of North American commingled funds which include custody fees within the management fee. The actual returns will be reduced by the investment management (advisory) fees and other expenses.

Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

The Baring Asset Management pricing policy (or the relevant Fund Administrator pricing policy) is applied to funds in this Composite. These policies include provision that where markets are closed due to holidays or political events, the prices of securities in that market may be adjusted. This may on occasion cause differences to the valuation sources used by the benchmark, and to other funds in the Composite.

The Composite is comprised of multi asset accounts managed for Sterling based clients, which can invest across a broad spectrum of assets with an absolute return target. The investments strategy is to take an extended degree of risk in order to seek to achieve a return in line with the accounts investment objectives. The individual portfolios within the composite have the following current target objectives: 3mth LIBOR +4%; CPI +4.5%; CPI +5%; Produce Income; RPI +4% (net of fees), RPI +4.5%; RPI +6%; RPI +7%; To protect Capital & Produce Income; Total Return 7.5%, Total Return 8%, FTSE UK Govt > 15 yr Index. With effect from 1st April 2007 the Composite was renamed from 'Multi Asset Targeted Solutions GBP RPI +4.5% to + 5.5%'. Prior to 1st July 2006 the Composite was named 'Extended Risk Solutions GBP’.

To be included in the composite, each account must be managed with a similar mandate for at least one full month.

Net-of-fee performance for the Firm is calculated at the constituent account level and deducted monthly using actual client fee schedules. Investment Trusts, Mutual Funds, other Common Investment Funds apply the equivalent standard Institutional Fee scale, which is the maximum fee that institutional clients would be charged for this product. Rebates apply to any Institutional clients invested in Common Investment Funds, thereby the fee that would be charged to Institutional clients would not exceed that deducted. Where performance fee arrangements exist the actual fee paid is applied. Where performance fees are billed annually, in between billing dates the base fee is applied, applying the performance fee for the entire period at the point that it becomes due.

The Composite includes a Commingled Vehicle. The Commingled Vehicle Net of fees performance for inclusion in the Composite Net of Fees performance reflects the deduction of the highest applicable management fee ("Model Net Fee")

that would be charged based on the fee schedule appropriate to you for this mandate. Please be advised that the Commingled Vehicle may include other participants that are subject to management fees that are inapplicable to you but are in

excess of the Model Net Fee. Therefore, the actual performance of all the participants in the Commingled Vehicle on a net-of-fees basis will be different, and may be lower, than the Model Net Fee performance. However, such Model Net Fee performance is intended to provide the most appropriate example of the impact management fees would have by applying management fees relevant to you to the gross performance of the Commingled Vehicle. Composite net-of-fee performance reflects the weighted average of constituent account net-of-fee returns. Based on the above and taking into account individual client fee arrangements the fee deducted over the last 12 months to the stated reporting date for the composite was 0.50%.

On January 1st 2003 the investment business of Barings (Guernsey) Limited was re-contracted to Baring Asset Management (C.I.) Limited, a legal subsidiary of Baring Asset Management Limited. The Barings (Guernsey) Limited portfolios included in this composite were therefore not contracted legally to BAM Ltd before January 1st 2003, the track record however is portable for GIPS purposes. This performance is representative of Baring Asset Management’s fully discretionary management capabilities. All similar mandates would be managed by the same team following the same philosophy and process.

The Composite contains at least one fund valued using midday GMT prices and exchange rates calculated by the Fund Administrator. This may on occasion cause differences to the valuation and exchange rate sources used by the benchmark, and to other funds in the Composite. At 31st March 2011, the valuation basis for midday valued funds changed to a close of business price in each market, using the 4pm WM/Reuters exchange rate. The valuation was calculated by the Fund Administrator. From 1st April 2011 the valuations will be continue to be valued on a close of business basis, using BAM's internal valuation system.

For Private Client portfolios the minimum portfolio size for inclusion in the composite is GBP250,000 Each monthly return for the CPI/RPI is calculated on an average of the monthly rate over the prior 12 months.

As at the reporting date 2 portfolios reinvests capital gains and part of income is paid away and the remainder is reinvested, 13 portfolios reinvests capital gains and but not income and 10 portfolios reinvest capital gains and income, (including dividends and other earnings).

In accordance with BAM's error correction policy, the annualised since inception return to 31st March 2011 has been restated. The incorrect numbers were; 5.31% gross, 4.87% net, 7.46% RPI +4.5%, 7.12% UK CPI +5%, & 8.39% £ 3 month LIBOR +4%. The corrected figures are; 6.88% gross, 6.42% net, 7.39% RPI +4.5%, 7.08% UK CPI +5%, & 8.46% £ 3 month LIBOR +4%. The inception date of the composite is 30/06/1999.

In accordance with BAM’s error correction policy, 3 year ex post annualised standard deviation numbers have been restated for the 3 year periods to the year ends at 2002 & 2003. The amendments are: 2002 composite originally 14.93 now N/A, benchmark originally 0.17 now N/A & 2003 composite originally 13.59 now 13.66, benchmark originally 0.22 now 0.21. Prior to Jan 2001 return data for accounts in the composite was not produced on a monthly basis. As a result there are not 36 monthly observations available for year end 2002 & therefore 3 year annualised standard deviation is not available.

This composite may include performance from certain funds that are not offered in the US and not available to US residents.

Some portfolios run according to Baring Asset Management’s Multi Asset: GBP Inflation / Cash Targeted Solutions: High Return strategy, have on occasion, used equity index futures for the purpose of adjusting asset exposure, asset allocation, liquidity and efficient portfolio management. Leveraged strategies have not been employed.

28

ImportantInformation

For Professional Investors/Advisers only. It should not be distributed to or relied on by Retail Investors. This document is approved and issued by Baring Asset Management Limited, authorised and regulated by the Financial Services Authority and in jurisdictions other than the UK it is provided by the appropriate Baring Asset Management company/affiliate whose name(s) and contact details are specified herein. The information in this document does not constitute investment, tax, legal or other advice or recommendation. It is not an invitation to subscribe and is for information only.

Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed. Past performance is not a guide to future performance. Where yields have been quoted they are not guaranteed. Changes in rates of exchange may have an adverse effect on the value, price or income of an investment. There are additional risks associated with investments (made directly or through investment vehicles which invest) in emerging or developing markets. Investments in higher yielding bonds issued by borrowers with lower credit ratings may result in a greater risk of default and have a negative impact on income and capital value. Income payments may constitute a return of capital in whole or in part. Income may be achieved by foregoing future capital growth. We reasonably believe that the information contained herein from 3rd party sources, as quoted, is accurate as at the date of publication. The information and any opinions expressed herein may change at any time. Companies and employees of the Baring Asset Management group may hold positions in the investment(s) concerned. This document may include internal portfolio construction guidelines. As guidelines the fund is not required to and may not always be within these limits. These guidelines are subject to change without prior notice and are provided for information purposes only.

This document may include forward looking statements which are based on our current opinions, expectations and projections. We undertake no obligation to update or revise any forward looking statements. Actual results could differ materially from those anticipated in the forward looking statements.

This document must not be used, or relied on, for purposes of any investment decisions. Before investing in any product, we recommend that appropriate financial advice should be sought and all relevant documents relating to the product, such as Reports and Accounts and Prospectus should be read. Compensation arrangements under the Financial Services and Markets Act 2000 of the United Kingdom will not be available in respect to any Offshore Fund.

Research Material

Baring Asset Management only produces research for its own internal use. Where details of research are provided in this document it is provided as an example of research undertaken by Baring Asset Management and must not be used, or relied upon, for the purposes of any investment decisions. The information and opinions expressed herein may change at anytime.

The following wording must be included when the material includes performance data that is sourced from Morningstar -

For data sourced from Morningstar: © Morningstar, Inc. all rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Version 07/SD

barings final 2012 nma - multi asset fund presentation fa

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