quarterly client update: first quarter 2014 · between 350,000 and 500,000 premature deaths in the...

Quarterly Client Update: First Quarter 2014

1 January – 31 march 2014

First State Stewart Sustainability Strategies

FOR PROFESSIONAL INVESTORS ONLY

Investment philosophySince 1988 we have had an approach to investment founded on:

– Stewardship– An absolute return mindset– Bottom-up analysis– Long-term thinking– Searching for quality companies– Finding sustainable and predictable growth– Strong valuation disciplines

Investment objectiveTo generate attractive long-term, risk-adjusted returns by investing in the shares of those companies which we believe are particularly well positioned to benefit from, and contribute to, the sustainable development of the countries in which they operate.

Commentary

air Pollution

In Scotland, the hotels hand out umbrellas to guests. In China, they now hand out pollution masks, along with detailed pollution forecasts.

Asia’s air pollution crisis continues to worsen. Li Keqiang, China’s Premier, recently admitted that “the first thing people do in the morning is check the PM 2.5 figure.” Only 3 of China’s largest 74 cities met national air quality standards last year. Beijing’s concentration of PM2.5 particles now regularly exceeds 500 micrograms per cubic metre. The World Health Organisation recommends a safe level of 25. According to Chen Zhu, China’s former health minister, the country’s air pollution is leading to between 350,000 and 500,000 premature deaths in the country each year, while a recent report by the Shanghai Academy for Social Sciences declared that Beijing is now almost “uninhabitable for human beings.” Scientists have also noticed that air pollution is having a direct impact on the process of photosynthesis itself in a manner similar to that predicted during a ‘nuclear winter.’ Panasonic, the Japanese electronics company, recently announced it would pay its workers in China a ‘pollution premium’ on top of their standard pay to compensate for the danger of working in such a polluted environment. The reasons behind such extreme air pollution levels are complex but well understood. They include the inability of the ‘market’ to price environmental externalities satisfactorily, poor environmental regulation, poor governance, the emergence of densely populated “mega cities”, the burning of low quality fossil fuels, over-industrialisation and broader environmental degradation.

The problem is not confined to China. Indeed, according to the World Health Organisation, no Chinese city makes it onto a list of the top ten most polluted cities in the Asia, as measured by PM10 particles per cubic metre. By this measure, India has five cities in the top ten; Ludhiana, Kanpur, Delhi, Lucknow and Indore, all of which average more than 170 PM10 micrograms per cubic metre. This compares to an average of 29 for London and 21 for New York.

For long-term investors, air pollution has become a critical investment issue, alongside other sustainable development challenges such as water scarcity, water pollution, inequality and top soil depletion. It is one of many reasons why economies are slowly but surely shifting towards a more sustainable development path. Li Keqiang recently declared “war against pollution”, describing it as not “a war against nature, but a war against our own inefficient and unsustainable model of growth and way of life”.

In theory, many companies are well positioned to help contribute towards sustainable development. Our greatest investment challenge is not to identify these companies but rather to try and sift out from this list the 99% of them, which ultimately fail our investment quality requirements. There are, for example, hundreds of listed companies with the words solar, clean or green in their company name! We have yet to invest in any of them. Among them is the solar company which dumped tonnes of toxic waste materials illegally into a river system. The wind company that proudly claimed to have hired a “bigger politician” than their competitor along the road. The clean energy company which allegedly had a policy whereby all staff lost their bonus if there was more than one pregnancy per department per year. The solar company that set up fictional subsidiaries to generate fictional sales. More generally fraud, tax evasion and huge related party transactions seem to be prevalent in the sector.

Fortunately, outside this “cleantech” sector, good quality companies with strong sustainability positioning are more commonplace and, we believe, are more likely to deliver attractive long-term returns for clients.

Contents

Commentary 2

Significant Portfolio Changes 3

engagement 4

Proxy Voting 4

Business Update 5

Investment trip report: United States 6

Fund Information 8

First State Investments First State Stewart Quarterly Client Update

2

SIgnIFICant PortFolIo ChangeS

Worldwide

During the quarter for our Worldwide strategy we initiated positions in Meyer Burger Technology, Drägerwerk and The Fresh Market.

Meyer Burger is a Swiss company that has transformed from a small family business to a globally dominant technology leader in manufacturing solar equipment. They maintain the broadest portfolio in the industry and are well positioned to benefit from the long-term emergence of the solar industry, due to very high barriers to entry, arising primarily from technology and the highly specialised nature of the products they manufacture.

Drägerwerk, a German family owned business, is an international leader in the fields of medical and safety technology; they manufacture breathing and protection equipment, gas detection and analysis systems and non-invasive patient monitoring technologies for a diverse customer base. The Dräger brand is well respected amongst health professionals and they are likely to benefit from the increasing need of safety materials in emerging markets.

The Fresh Market is a U.S. grocery store chain whose business is positioned around “increasing consumer focus on healthy eating choices and fresh quality offerings, including regionally and locally sourced products”. It is a sustainable goods and services franchise that should be a beneficiary of the need for healthier lifestyles and better diets, particularly in the U.S. where life expectancy for women is falling and diabetes is rising.

In addition, we added to Lenzing and Sawai Pharmaceuticals on compelling valuations and their positioning for sustainability tailwinds; and Varian Medical Systems, having gained further conviction on the quality of management following a positive meeting.

We sold out of Cencosud, having lost conviction on the quality of management and increasing concerns over their debt appetite; Aspen Pharmaceutical on expensive valuations; Recall Holdings (also held in the Asia strategy) due to insufficient conviction to build a significant position; and Deutsche Post following a significant re-rating in valuations. We also reduced our positions in Techne Corporation and Xylem, following very high valuations.

emerging markets

In our Emerging Markets strategy we initiated a position in Banco Bradesco, a conservative financial institution in Brazil whose culture is infused by a clear social dimension and mission with a sense of stewardship engrained throughout. Bradesco is a necessary finance franchise that is focused on contributing towards Brazil’s sustainable development and democratising access to credit. It should be a beneficiary of sustainable tailwinds from the development of the Brazilian GDP and growth opportunities in insurance.

In addition, we added to Sonda, Natura and Globe Telecom (also held in the Asia strategy) on compelling valuations. We reduced our ownership of Towngas China due to growing concerns over the regulatory outlook.

asia

In Asia, we added to Ayala Corporation, as we are backing management to restructure the business for the long term by increasing their stakes in BPI (Bank of the Philippine Islands) and Manila Water whilst selling their loss making Business Process Outsourcing units; and Kotak Mahindra in order to build a more meaningful position for the long term in this family run Indian bank.

We have reduced our ownership in Singapore Telecom on the belief that Globe Telecom is a stronger franchise, Tech Mahindra in order to control position size and Delta Electronics on expensive valuations (both also held within the Emerging Markets strategy).

India

In our Indian strategy we initiated a position in GlaxoSmithKline Consumer Healthcare as we have been long term believers in the potential for fortified drinks in India, the country being home to one of the highest rates of child malnutrition in the world. We also added to Container Corp, having built conviction in the franchise and Tata Chemicals on compelling valuations.

We sold out of Hindalco, as we believe the business faces too many sustainability headwinds in the near term; Max India, as we struggled to build long-term conviction on the quality of the insurance franchise; and Commercial Bank of Ceylon and Nations Trust Bank due to the rising political influence in banks in Sri Lanka. We tendered our shares of GlaxoSmithKline Pharmaceuticals to the parent GlaxoSmithKline PLC, in their offer to buy shares from minorities, as we believe valuations were rich but we like the long term potential for Glaxo to not only benefit from the long term opportunity for pharmaceutical spending in India but to also engage and move the industry in the right direction. We also reduced Great Eastern Shipping and Blue Dart Express, as valuations became stretched.

www.firststateinvestments.com

3

DIStrIBUIDora InternaCIonal De alImentaCIón (DIa)

market cap: USD 5.5bn

Shareholders since: November 2012

Sustainability classification: Sustainable goods and services

Company description: An international leading specialist discounted food retailer

Investment rationale: A Spanish-based retailer and grocer spun-out from Carrefour in 2011. The creation of a new stand-alone company empowered DIA’s impressive local management team to focus on positioning the business to benefit from the sustainable tailwinds of shifting consumer trends from big-box over-consumption towards more locally sourced and based daily consumer necessities. They occupy neighbourhood locations through the use of franchises, which make up approximately 40% of their business model, and continue to steadily grow their international operations in Shanghai, Argentina and Brazil. DIA are focused on the long-term trends of healthy eating, are concerned about product/food quality and have expanded their healthy product offerings in their DIA Maxi stores.

risks: The main concern is that the business tries to grow too quickly in international markets through franchising and suffers reputational damage due to poor product quality and stores losing sight of the ethos, and brand identity behind DIA.

engagement issues: Developing a DIA specific approach to sustainability reporting rather than following a standardised global template.

Fresh fruit and vegetable offerings within a DIA store. Source: FSS Team

engagement

As long-term shareholders, we regard ourselves and our clients as active owners of the companies we invest in and believe it is our obligation to engage with companies where we have concerns over their approach to sustainability and governance issues. We acknowledge that there is no such thing as the perfect company and therefore for us engagement is an on-going process. Typically, we engage through regular dialogue, meetings or by writing a personal letter.

Examples of engagement issues identified and undertaken during the quarter include:

– grupo herdez (a Mexican branded consumer goods company): Following news reports that the company has been running a tuna processing plant in Chiapas which had allegedly been discharging high levels of waste into the Chiapas Port. The impacts of this pollution are believed to include dead fish and other wildlife in the area, as well as a decline in tourism.

– Dr reddy’s (an Indian pharmaceutical company): Highlighting the opportunity in taking the leading approach to improving global marketing practices amongst healthcare companies, an area we believe faces intense scrutiny from regulators globally in the coming years.

– Kotak Bank (an Indian bank): Following the recent floods in Uttarakhand, exacerbated by the excessive damming of rivers in the region, we have encouraged Kotak Bank to take the lead in incorporating environmental and social parameters into its responsible lending process. While we appreciate that over damming raises questions around regulation and central planning, we also believe that these development risks come back to capital allocators either through defaults or reputation risks.

– Brambles (an Australian pooling solutions company): At a recent meeting we discussed environmental positioning with Brambles and they highlighted a lifecycle study using RPC vs corrugated cardboard showing that a Bramble’s crate generates “82% less solid waste, consumes 92% less water and requires 49% less energy for a weighted average of the top 10 produce commodities.” This further confirms our view that Brambles would benefit from moving to a more circular economy.

– novo nordisk (a Danish healthcare company): Following the recent publication of an Environmental Profit and Loss statement by the Danish Ministry of the Environment, we took the opportunity to congratulate Novo on their long term sustainability positioning and their attitude to environmental liabilities.

Proxy VotIng

During the quarter there were 31 company meetings to vote on. We voted against two resolutions relating to corporate structure:

– Becton Dickinson’s request to vote against a shareholder proposal for an independent chairman. We believe an independent chairman is better able to oversee the executives of a company and set a pro-shareholder agenda without the management conflicts that a CEO or other executive insiders often face, leading to a more risk aware and effective board of directors.

– handelsbanken’s request to approve directors’ fees and grant an indemnity against fines. We believe the proposal to increase directors’ fees is appropriate but we do not support the request to grant an indemnity against fines as we see it as fundamental to the role of the board. We have made the recommendation that in future resolutions are not bundled together.

– One of the more bizarre shareholder proposals we voted on this quarter was for the novo nordisk AGM where one shareholder put forward a resolution to the Board that “refreshments in connection with the AGM reflect the outlook for the coming year”. We voted against this resolution but think it’s worth highlighting to clients as a demonstration of the challenges companies come up against in managing the expectations of such a broad range of shareholder concerns!

Should any client like a full list of all proxy voting for the companies held in the strategies, please contact us directly.


4

BUSIneSS UPDate

During the quarter, we commissioned Trucost to conduct research on the environmental sustainability issues in the steel sector and assess a handful of companies against a sustainability framework. The brief conclusions from the report are that:

– Environmental data remains scarce throughout the industry, making it difficult to draw a direct comparison against companies.

– Energy use, air pollution and water requirements are the key issues.

– An interesting fact we learnt was that recycling one tonne of steel saves 1,400kg of iron ore, 400kg of coal and 55kg of limestone. Steel manufacturers’ input cost optimization caused steel to become the world’s most recycled material.

– Choice of technology and position in the value chain has a large influence on energy needs. Primary steel making (75% of total) is far more energy intense than secondary steel (25%) because of the technology used. For example, Electric Arc Furnaces’ (EAFs) (secondary) need 9-12.5 GJ / tonne of crude steel (tcs) as compared to 28-31 GJ / tcs in Basic Oxygen Furnaces’ (BOFs) (primary). BOF also create about double the by-products.

We also commissioned some research into the approach our Indian companies are taking to tax and sustainable packaging. This will continue to be a focus area for future engagement with relevant companies.

We shall be hosting a small forum in Edinburgh during the month of May. The purpose of this forum is to re-examine the concept of sustainable investment to one that is about managing risk, making the best possible investment decisions and allocating capital in a way that reflects the fact that the long-term really does matter. We plan to share the outcomes of the event within the next quarterly report. However, should any clients wish for any further information in the meantime please do not hesitate to contact us.


5

InVeStment trIP rePort: UnIteD StateS

Sashi reddy, Portfolio manager

“I have not checked our share price since 3Pm”, said a very animated head of investor relations at a leading branded foods company in New Jersey at 5.30 in the evening. She was keen to make me understand why despite them “blowing the doors off in Q1” their share price was depressed. She went on to explain the company’s acquisitions strategy, a key part of which is a “reverse Morris Trust” merger to optimize taxes. This was the last of many meetings during a week-long trip to the U.S. and it could not have ended any better. To a fresh pair of eyes used to emerging market shenanigans, it was becoming clear that capitalism was at its creative best in the U.S.

Rewind back to the beginning of the week and we are up early on a Monday morning in San Diego to visit one of California’s leading gas utilities. They are investing in solar and steadily building a franchise in Mexico and Latin America, enough to get us excited. Half an hour into the meeting we were struggling as the IR’s assessment of their weakness was their disadvantageous tax structure despite paying only 6% in cash taxes. Sadly their investors have been giving them a hard time as peer companies have managed to bring down tax rates further! Little did we realise that we were slowly knocking on the door of the complex world of financially engineered U.S. utilities.

Our experience with a pharmaceutical company later in the day was different but equally interesting. Their share price chart and financial performance over the last 5 years has been nothing short of magical. Their CEO proudly told us that the company did not realise the goldmine they were sitting on when he arrived there in 2007. He instantly raised prices by 1300% and now earns gross margins of 95% on its products. We tried to engage him on the ethical limits of profitability in the healthcare sector and he quickly reiterated his belief in capitalism. “I like unlimited upside” – the danger is healthcare regulators might not.

A few days later I walked into a reassuringly boring building in a less posh part of Portland to meet with one of Portland’s oldest companies, a gas utility. Their culture and long termism immediately shone through and their CEO’s letter to shareholders has all the ingredients which should make long-term investors feel weak in their knees.

“Progress is not always a straight line or a smooth path but when you are a 154 year old company, small steps add up. In 2012 there were plenty of steps forward, though they came with some curves and rough terrain.” – Chairman’s letter to shareholders in 2012.

Eureka? Not really! Their dividends have been rising for the last 57 years but have been increasingly funded by deferring tax payments to the government and providing for less pensions and taking on higher regulatory liabilities. Every other stakeholder in the business has been funding shareholders in this scheme. Management could be risking its license to operate paying heed to the demands of short term investors. Ironically, they have done well to keep much of their dharma intact while their friend down the road was hit by the Enron storm in the 90s and is yet to fully emerge from it. We will need to see many of those balance sheet risks mitigated over time to consider this company as a possible investment for our clients.

An overnight flight from one city to another and we are still in the same country – the U.S. is a vast country and it is not surprising that cultures are so different from the east to the west. Freshly armed with my knowledge of creative taxation, I make my way to one of the world’s biggest waste to energy companies. I could not think of a more sustainable business only to find out that management here are focused less on converting waste to energy and more on offsetting their NOLs (non-operating losses) for another 10 years against profits from power generation. These NOLs were acquired when their controlling shareholder merged his insurance company with many decades of asbestos claims into this power generation utility. In return for these NOLs, he has now become the largest shareholder. Never imagined that unrelated tax losses were worth their weight in gold!


6

In a world of increasing income disparity, the license to operate many of our utilities may be put to stringent test by consumers and governments in the future. This is a risk we are wary of and engaging some of our companies on.

Luckily for us, there are roughly 4000 listed companies in the U.S. and we only need to find 30-50 good quality ones. During the week, we met with a well-run water utility in a remote suburb of Los Angeles, who understands that their purpose of existence is to ensure affordable and reliable water supply to millions of Californian residents and not dancing to the tunes of short term investors. A pharmaceutical company in San Diego has taken the lead in disclosing marketing expenses to doctors with their names for full public scrutiny from as far back as 2008, well before the U.S. government contemplated making it mandatory. And a bank in New Jersey has not lost money since 1927 because senior management and the board are large shareholders and behave like owners with lots of reputation and wealth invested here.

As in Emerging Markets, we have been pleased to discover how quickly it seems possible to differentiate between companies by focusing on issues such as a company’s sense of purpose, their approach to tax and their love of financial engineering. While there is no such thing as the perfect company, there are plenty out there that are so far away from what we are looking for as to be un-investible at any price.


7

Source: FSS Team


8

First State Asia Pacific Sustainability FundFund SizeNumber of Holdings 50

Ten Largest Holdings as at 31 Mar 2014 Significant Additions - Three Months to 31 Mar 2014

Stock Name Stock NameTech Mahindra 0.0 Kansai Nerolac Paint MaterialsMarico 0.0CSL 0.8Taiwan Semiconductor (TSMC) 2.4Dabur India 0.0 Significant Disposals - Three Months to 31 Mar 2014Standard Food Corp 0.0Towngas China 0.0 Stock NameDelta Electronics T-F 0.0 Sabana REIT FinancialsPublic Bank 0.2Kasikornbank 0.2

Total 3.6

Sector Allocations as at 31 Mar 2014 Country Allocations as at 31 Mar 2014

^ index weight ^ index weight

Market Capitalisation as at 31 Mar 2014

Portfolio Weight 3.9 12.4Index Weight 0.0 17.1Style Research does not always have full stock coverage; weights may not total 100%.

Contribution Analysis - Twelve Months to 31 Mar 2014Top Three Contributing Stocks Bottom Three Contributing Stocks

Tech Mahindra 6.8 269 Manila Water Co 2.3 -238Delta Electronics T-F 3.8 108 Marico 5.7 -102Towngas China 3.9 98 Kasikornbank 3.5 -91

Cumulative Performance to 31 Mar 2014

Fund (net of fees)* 190.9 - 130.3 134.6 25.3 23.9 -2.3 2.8 0.4Benchmark Return** 105.6 - 64.6 89.7 1.6 8.8 -6.7 0.3 0.3

Calendar Year PerformanceYTD 2013 2012 2011 2010 2009 2008 2007

Fund (net of fees)* 0.4 7.5 26.8 -11.0 34.8 41.9 -20.9 34.00.3 1.5 16.9 -15.0 21.8 54.2 -33.4 34.2

Data Source: This information is calculated by First State using the Barra Enterprise Performance system. Index information is provided by RIMES.*The Inception Date for performance measurement purposes is 19 December 2005. Returns are cumulative, net of fees and tax, and denominated in GBP.**The Benchmark for the First State Asia Pacific Sustainability Fund is the MSCI AC Asia Pacific ex Japan Index and is calculated net of tax.

7.51.5

3 Months

6 Months1 Year

2 Years

3 Years

5 Years

7 Years

10 Years

19.556.8

26.615.2

£10b+

Sector

Sector

Stock Name Portfolio

Weight (%)Added*(bps)

Added*(bps) Stock Name

3.73.53.4

PortfolioWeight (%)

£5b to £10b£2.5b to £5b£1b to £2.5b£500m to £1b27.89.3

£255 m

Benchmark Return**

IndexWeight** (%)

£0 to £500m

PortfolioWeight* (%)

% Change:Since

Launch*

6.65.64.74.43.93.8

43.4

3.8

Consumer Staples 20.9% (6.5%^)

Information Technology 19.6% (15.6%^)

Financials 19.4% (36.3%^)

Telecom Services 10.8% (4.9%^)

Industrials 8.6% (8.1%^)

Health Care 7.7% (2.2%^)

Utilities 7.3% (3.3%^)

Consumer Discretionary 2.0% (8.1%^)

Materials 1.6% (9.1%^)

Energy 0.0% (5.8%^)

Cash 2.2% (0.0%^)

India 27.7% (6.4%^)

Taiwan 17.6% (11.2%^)

China 8.2% (17.9%^)

South Korea 7.6% (14.9%^)

Philippines 7.3% (0.9%^)

Thailand 7.1% (2.1%^)

Singapore 7.0% (4.8%^)

Australia 6.3% (26.0%^)

Malaysia 5.4% (3.7%^

Other 3.6% (2.5%^)

Cash 2.2% (9.1%^)

brimak48

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Investment involves risks. Past performance is not indicative of the future or likely performance.


9

First State Global Emerging Markets Sustainability FundFund SizeNumber of Holdings 64


Stock Name Stock NameTech Mahindra 0.0 Banco Bradesco FinancialsUnilever 0.0Marico 0.0Delta Electronics T-F 0.0Public Bank 0.2 Significant Disposals - Three Months to 31 Mar 2014Standard Food Corp 0.0Guaranty Trust Bank 0.0 Stock NameIAM Chile 0.0 Amorepacific Group Consumer StaplesDabur India 0.0 Cencosud Consumer StaplesPZ Cussons 0.0 Wilson Bayly Holmes Industrials

Total 0.2


^ Index weight ^ Index weight




Tech Mahindra 6.6 257 Manila Water Co 2.2 -235Delta Electronics T-F 3.7 108 Marico 5.6 -92Towngas China 1.5 58 Kasikornbank 1.9 -84


Fund (net of fees)* 114.8 - 38.9 16.7 17.7 -6.3 1.0 -0.2Benchmark Return** 61.2 - -1.2 -11.9 -3.7 -10.2 -1.5 -1.1

Calendar Year PerformanceYTD 2013 2012 2011 2010

Fund (net of fees)* -0.2 2.7 25.1 -14.3 38.4-1.1 -4.4 13.0 -17.8 22.6

Data Source: This information is calculated by First State using the Barra Enterprise Performance system. Index information is provided by RIMES.*The Inception Date for performance measurement purposes is 08 April 2009. Returns are cumulative, net of fees and tax, and denominated in GBP.**The Benchmark for the First State Global Emerging Markets Sustainability Fund is the MSCI Emerging Markets Index and is calculated net of tax.

9.32.0

3 Months

6 Months1 Year

2 Years

3 Years

4 Years

5 Years

SinceLaunch*

16.550.7

29.516.7

£10b+

Sector

Sector

Stock Name Portfolio

Weight (%)Added*(bps)

Added*(bps) Stock Name

2.32.32.2

PortfolioWeight (%)


£273 m

Benchmark Return**

IndexWeight** (%)

£0 to £500m


% Change:

6.46.35.43.63.33.2

37.6

2.6







Health Care 2.3% (1.7%^)



Energy 0.0% (10.8%^)

Cash 3.4% (0.0%^)

India 20.4% (6.8%^)

Taiwan 9.2% (11.9%^)

Chile 7.9% (1.6%^)

UK 6.7% (0.0%^)

Brazil 6.4% (11.0%^)

Nigeria 6.3% (0.0%^)

South Africa 6.3% (7.8%^)


Thailand 5.4% (2.2%^)

Other 21.8% (3.9%^)

Cash 3.4% (19.0%^)

brimak48

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10

First State Worldwide Sustainability FundFund SizeNumber of Holdings 55


Stock Name Stock NameUnilever 0.2 Meyer Burger IndustrialsDia 0.0 Draegerwerk Ag Health CareCSL 0.1 Fresh Market Inc Consumer StaplesGlaxosmithkline 0.4Ebro Foods 0.0 Significant Disposals - Three Months to 31 Mar 2014Waters Corp 0.0Kansai Paint 0.0 Stock NameHenkel 0.0 Deutsche Post IndustrialsMarkel Corp 0.0 Cencosud Consumer StaplesShimano 0.0 Aspen Pharmacare Health Care

Total 0.7


^ Index weight ^ Index weight




Dia 5.9 127 Tiger Brands 1.7 -67Kingfisher 1.5 92 Manila Water Co 1.0 -65Tech Mahindra 2.4 91 Cencosud 0.0 -55


Fund (net of fees)* 23.2 - - - - 5.8 3.7 1.0Benchmark Return** 23.0 - - - - 6.2 5.4 0.4

Calendar Year PerformanceQ1-14 Q4-13 Q3-13 Q2-13 Q1-13

Fund (net of fees)* 1.0 2.7 0.7 1.2 13.70.4 4.9 1.1 -0.3 14.0

Data Source: This information is calculated by First State using the Barra Enterprise Performance system. Index information is provided by .*The Inception Date for performance measurement purposes is 23 November 2012. Returns are cumulative, net of fees and tax, and denominated in GBP.**The Benchmark for the First State Worldwide Sustainability Fund is the MSCI AC World Index and is calculated net of tax.

5.95.94.33.83.83.5

38.8

3.2

£111 m

Benchmark Return**

IndexWeight** (%)

£0 to £500m


% Change:

3.02.72.6

PortfolioWeight (%)


Added*(bps)

Added*(bps) Stock NameStock Name

PortfolioWeight (%)

£10b+

Sector

Sector

36.275.1

19.68.0

6.90.2

3 Months

6 Months1 Year

2 Years

3 Years

4 Years

5 Years

SinceLaunch*


Health Care 21.6% (10.6%^)






Energy 2.3% (9.7%^)



Cash 4.6% (0.0%^)

USA 19.5% (49.0%^)

UK 11.7% (7.8%^)

Spain 11.3% (1.3%^)

Japan 9.5% (7.2%^)

Switzerland 8.3% (3.4%^)

Australia 5.5% (2.9%^)

Germany 5.0% (3.5%^)

India 4.6% (0.7%^)


Other 16.9% (24.1%^)

Cash 4.6% (0.0%^)

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Telephone EmailAlexis Ng Managing Director, South East Asia and Head of Distribution, Asia +65 6580 1321 [email protected] Prendiville Director, Institutional Business, Southeast Asia +65 6580 1365 [email protected] Tang Director, Institutional Business, North Asia +852 2846 7540 [email protected] Lin Director, Institutional Business, North Asia +852 2846 7546 [email protected]

For further information contact:


11

Disclaimer

First State Asia Pacific Sustainability Fund, First State Global Emerging Markets Sustainability Fund and First State Worldwide Sustainability Fund are not authorized by the Securities & Futures Commission in Hong Kong and are not available for sale to retail public in Hong Kong.

The information contained within this document has been obtained from sources that First State Investments (“FSI”) believes to be reliable and accurate at the time of issue but no representation or warranty, expressed or implied, is made as to the fairness, accuracy, completeness or correctness of the information. Neither FSI, nor any of its associates, nor any director, officer or employee accepts any liability whatsoever for any loss arising directly or indirectly from any use of this. This document is intended solely for distribution to professional/institutional investors as may be defined in the relevant jurisdiction and is not intended for distribution to the public. The information herein is for information purposes only; it does not constitute investment advice and/or recommendation, and should not be used as the basis of any investment decision. Some of the funds mentioned herein are not authorised for offer/sale to the public in certain jurisdiction.

The value of investments and the income from them may go down as well as up and you may not get back your original investment. Past performance is not necessarily a guide to future performance. Please refer to the offering documents for details, including the risk factors.

This document/the information may not be reproduced in whole or in part without the prior consent of FSI. This document shall only be used and/or received in accordance with the applicable laws in the relevant jurisdiction.

Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. All securities mentioned herein may or may not form part of the holdings of First State Investments’ portfolios at a certain point in time, and the holdings may change over time.

In Hong Kong, this document is issued by First State Investments (Hong Kong) Limited and has not been reviewed by the Securities & Futures Commission in Hong Kong. First State Investments and First State Stewart are business names of First State Investments (Hong Kong) Limited. The First State Stewart team manages equities in Asia Pacific, Global Emerging and other international markets. The Securities and Futures Commission has not reviewed the contents of www.firststateinvestments.com. In Singapore, this document is issued by First State Investments (Singapore) whose company registration number is 196900420D. First State Stewart (registration number 53236764B) is a business division of First State Investments (Singapore). First State Investments (registration number 53236800B) is a business division of First State Investments (Singapore).

quarterly client update: first quarter 2014 · between 350,000 and 500,000 premature deaths in the...

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