Citywire oct 2013

Global Equity Income Citywire Wealth Manager Retreat Stephen Thornber – Fund Manager

17th & !8th October 2013

June 2013

For institutional investors

2

1. Product features

2. Performance

3. Team

4. Investment process

5. Portfolio positioning

6. Market outlook

7. Summary

8. Appendix

Contents

Threadneedle Global Equity Income Fund

A fund for income or total return


Benchmark MSCI AC World

Outperformance target 3% p.a.

Expected tracking error 3%-8%

Stock weightings +/- 4% versus benchmark

Sector weightings +/- 10% versus benchmark

Regional weightings +/- 25% versus benchmark

Number of holdings 75-95

Fund AUM £650m

Portfolio characteristicsDistinguishing features

Source: Threadneedle Investments as at 30 September 2013. Past performance is not a guide to future returns. Where references are made to fund characteristics and features these may be subject to change over time and subject to prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement. Please note that the outperformance target does not form part of the fund’s objectives and may not be attained..

3

A significant dividend tilt Growth embedded by stock

selection Portfolio style

Dividend yield > 4% buy discipline No income enhancement strategies

High yield

A record of strong performance in differing market conditions

Performance

An outstanding track record

Annualised YTD 1 Year 3 years 5 years Since inception1

Threadneedle Global Equity Income Fund (net)

17.0% 24.4% 15.4% 10.5% 6.7%

Peer group median (IMA Global Equity Income)

14.1% 20.3% 11.5% 7.8% 3.5%

Quartile ranking 1 2 1 1 1

Annualised YTD 1 year 3 years 5 years Since inception1

Threadneedle Global Equity Income Fund (gross)

18.1% 26.0% 17.3% 12.6% 8.8%

MSCI AC World Index (gross) 14.0% 21.2% 12.5% 8.6% 5.6%

Relative Performance +3.6% +4.0% +4.3% +3.7% +3.0%

Source: Morningstar / FactSet, 30 June 2013. Net fund data on a bid-bid basis with net income re-invested at bid. Gross fund returns gross of tax and TER for comparison with indices. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with income re-invested at bid. Index data provided by Thomson Financial DataStream. The relative returns shown are calculated on a geometric basis. All data is quoted in GBP. Past performance is not a guide to future returns.1 Fund inception 30 June 2007.

4

Performance

5

Threadneedle – experienced equity income management

Over $8 billion in equity income AUMSource: Threadneedle as at 30 September 2013..

Stephen ThornberGlobal Income

25 years’ experience

Benchmark MSCI AC World FTSE All Share S&P 500 MSCI Europe MSCI Asia (ex Japan)

Holdings 75-95 45-60 50-70 30-50 50-60

Leigh HarrisonUK Income


Diane SobinUS Income


Nick DavisPan-European Income


George GosdenAsian Income


6

Global Equity Income philosophy

We believe dividends are an underappreciated

signal of investment quality

Our focus is companies with a high dividend yield,

growth, and a robust balance sheet

When dividend investing, a balanced and

diversified portfolio is important to control risk

Growth Earnings >5%

Dividends >5%

Portfolio

SustainabilityGearing <75%

Dividend cover >1.25x

Income Yield >4%

Quality Income

High, growing, and sustainable dividendsNote: Stock and portfolio characteristics may be subject to change over time and subject to prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement.

Dividend paying stocks have outperformed

High dividend investing - a consistently successful strategySource: CLSA, FactSet Alpha Tester as at 30 June 2013.Note: Backtest based on MSCI universe with more than 3 analyst coverage. MSCI weighted US-dollar total return with monthly rebalancing.

Cumulative performance since 1995

0

200

400

600

800

1000

1200

Dec 94 May 96 Oct 97 Mar 99 Aug 00 Jan 02 Jun 03 Nov 04 Apr 06 Sep 07 Feb 09 Jul 10 Dec 11 May 13

Ind

ex

First quintile dividend yield Second quintile dividend yield MSCI AC World

7

8

Investment process

Select stocks based on valuation and conviction

Manage risk though diversification and balance

Implementation

Global team and regional equity teams

Macro and themes

Company meetings

Focused idea generation

Dividend yield > 4%

Typical characteristics:

Earnings growth >5%

Dividend growth >5%

Gearing <75%

Dividend cover >1.25x

Detailed fundamental analysis

Investable universe: 1300 stocks 400 stocks 75-95 stocks

Research and debate

Note: Stock and portfolio characteristics may be subject to change over time and subject to prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement.

A robust and consistent process

9

Wholesale

Portfolio positioning

Source: Threadneedle Investments as at 30 June 2013. Benchmark is the MSCI AC World Index. Cash position of 1.7% not shown.

21%

8%

10%

10%

8%

10%

9%

7%

9%

6%

22%

12%

12%

10%

10%

10%

10%

4%

3%

6%

0% 5% 10% 15% 20% 25%

Financials

Technology

Cons. Discretionary

Cons. Staples

Industrials

Energy

Healthcare

Materials

Telecommunications

Utilities Fund Index

34%

18%

5%

17%

13%

11%

52%

15%

8%

8%

5%

11%

0% 10% 20% 30% 40% 50% 60%

North America

Europe ex UK

Japan

UK

Asia ex Japan

EmergingMarkets Fund Index

Wholesale

Regional weightingSector weighting

60

80

100

120

140

160

Aug 11 Dec 11 Apr 12 Aug 12 Dec 12 Apr 13 Aug 13

Reb

ased

= 1

00

Global alternative asset manager

Idea generation Global team identifies large alternative asset managers as

structural winners, with near term catalysts

Research and debate Investors are increasing allocations to alternatives, and to

larger players within alternatives Bank deleveraging is creating growth opportunities Performance fee income is set to grow strongly Strong cash flow generation and low capital intensity mean

dividends are the primary use of cash

Implementation Larger position reflecting strong upside potential and

conviction Position adds to US and financials where portfolio was u/w

Investment theme in practice – Deleveraging

Source: Datastream as at 31 August 2013. Total return performance in USD and rebased to 100.The mention of stocks is not a recommendation to deal.

2-year performance relative to MSCI AC World Index

Market underappreciating Blackstone’s market position, resources, and performance fee growth

Bought

10

11

Blackstone

Geared property investments paying offSource: Reuters, Bloomberg news reports.

Affordable apartments in Berlin

2011: Buys 6,800 apartments and 73 commercial unitsReported cost: €220m

2012: Acquires c.14,000 apartments and c.450 commercial propertiesReported cost: €450m

2013: Sells 6,900 apartments to Deutsche Wohnen for €369m

Swooping on prime London

2009: Buys 50% stake in Broadgate office estate from British Land Cost: £1.07bn (£77m equity)

2013: Sells stake to TEMASEK for £1.7bn (c.£600m equity)

Estimated World LNG Prices

US shale energy revolution

Source: FERC, Waterborne Energy Inc – Prices taken on 5 September 2013 (USD per MMBTu). The mention of stocks is not a recommendation to deal.

Lake Charles$3.20

Bahia Blanca$15.71

Rio de Janeiro$14.71

Cove Point$3.34

Spain$10.07

UK$9.94

Belgium$9.82 Korea

$15.35

Japan$15.35

China$14.95

India$13.32

$

$

$

$

$

$

$

$

$

$

$

Bought August 2010 Bought March 2012 Bought August 2012

12

Chemicals and polymers manufacturer

Idea generation US desk highlighted that LYB benefits from widening

margins as its cost base is dependent upon natural gas while its end products are priced off crude oil

Research and debate Ethane should remain cost advantaged until new US

production capacity comes online in 2017 Global energy team view is that US energy exports are

constrained by infrastructure and politics in the near term New management team is focused on improving the

business - closing inefficient plants, not expanding capacity Strong cash flow used to strengthen the balance sheet and

increase shareholder returns

Implementation Industry remains susceptible to commodity and macro

risks, so a smaller position size is appropriate

Investment theme in practice – US shale energy revolution

Source: Datastream as at 30 June 2013. Total return performance in USD and rebased to 100.The mention of stocks is not a recommendation to deal.

2-year performance relative to MSCI AC World Index

Market underestimating the scale and sustainability of cost advantage and significant cash return potential

60

80

100

120

140

160

180

200

220

Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13

Reb

ased

= 1

00

Bought

13

Emerging market consumer

1 Source: Haver Analytics, GS Global ECS Research, US Federal Reserve, Bank of England as at December 2010. *Consumer Loans and Individual Credit Cards as % of GDP (excluding other types of bank loans – mortgage loans etc.). **Bank loans (personal) to households as % of GDP.2 Source: Haver as at 29 February 2012.The mention of stocks is not a recommendation to deal.

14

Bought July 2007 Bought November 2012 Bought January 2013 Bought March 2013

0%

20%

40%

60%

80%

100%

120%

UK

US

Ko

rea

Ta

iwa

n

Th

aila

nd

So

uth

Afr

ica

Hu

ng

ary

Po

lan

d

Cze

ch R

ep

ub

lic

Ch

ina

Bra

zil

Tu

rke

y

Ind

on

esi

a

Ind

ia

Ru

ssia

Ho

us

eh

old

de

bt

*

50

100

150

200

250

300

350

400

00 02 04 06 08 10

Ind

ex

Brazil China Indonesia Russia

Household debt as percentage of GDP (%)1 Robust growth in retail sales2

Investment theme in practice – Emerging market consumer

Premium apparel

2-year performance relative to MSCI AC World Index Idea generation Global team identified Hugo Boss as a high yield

consumer goods company growing in emerging markets

Research and debate Low level of debt and strong free cash flow generation

enables a high dividend pay out Growing through expansion in Asia where the brand has a

lower exposure then peers Building brand image through flagship stores, applying a

template luxury peers have used with success Risk that deterioration of european market outweighs growth

in Asia

Implementation Position size of c.1.3% reflecting a balance between

attractive growth prospects and macro risks of the consumer segment

High and sustainable dividends with exposure to growth of consumer spending, particularly in Asia

Source: Datastream as at 30 September 2013. Total return performance in US dollars and rebased to 100.The mention of stocks is not a recommendation to deal.

80

100

120

140

Sep11

Dec11

Mar12

Jun12

Sep12

Dec12

Mar13

Jun13

Sep13

Re

ba

se

d =

10

0

Bought

15

16

US – Improving housing and labour markets support growth, inflation remains benign, growth accelerates to 2.5% in 2014

Japan – Policy changes creating positive change, challenges in implementation ahead

Europe –Signs of a bottom appearing, a slow and protracted recovery ahead

Emerging markets – Strong growth but trajectory is downwards, BRIC’s each face major and different challenges

Global economic outlook

Source: Threadneedle, as at 30 September 2013. These estimates and forecasts are as of the date provided and are subject to change without notice at any time based upon market and other factors. None of Threadneedle, its directors, officers or employees make any representation, warranty, guaranty or other assurance that any of these estimates or forecasts will prove to be accurate. 1 Fiscal year.

2014 GDP growth forecast (%)

Developed Markets Threadneedle Consensus

US 2.5 2.7

UK 2.3 2.1

Japan 1.5 1.7

Europe 0.7 0.9

2014 GDP growth forecast (%)

Emerging Markets Threadneedle Consensus

China 7.5 7.4

India1 5.5 5.9

Russia 2.8 3.3

Brazil 3.0 2.6

Summary: Global Equity Income Fund

A compelling propositionWhere references are made to portfolio features these may be subject to change over time and subject to prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement.

Growth

Portfolio

Sustainability

Income

Quality Income

17

A significant dividend tilt Growth embedded by stock

selection Portfolio style

Dividend yield > 4% buy discipline No income enhancement strategies

High yield

A record of strong performance in differing market conditions

Performance

Appendix 7

19

Global Equity team

An experienced and diverse teamSource: Threadneedle as at 30 June 2013.

14 years’ experience5 years at Threadneedle


William DaviesHead of Global Equity



Jonathan CrownFund Manager


Ashish KocharFund Manager

Pauline GrangeFund Manager

Esther PerkinsFund Manager

26 years’ experience1 year at Threadneedle

Neil RobsonFund Manager


Stephen ThornberFund Manager

4 years’ experience1 year at Threadneedle

James ForemanClient Portfolio Analyst

Founded in 2007

6 year track record under lead fund manger Stephen Thornber

Experienced, committed and long tenured portfolio managers

Extending the Threadneedle income investment franchise

Over US$8bn of equity income AUM

Global Equity Income

Building on a strong tradition of income investingSource: Threadneedle Investments as at 30 June 2013.

20

Stephen Thornber Jonathan Crown

21

Wholesale

Global Equity Income Fund

Source: Threadneedle Investments as at 30 June 2013. Benchmark is the MSCI AC World Index. Cash position of 1.7% not shown.

Top 10 holdings Absolute (%) Active (%)

Blackstone +2.0 +2.0

CME +1.7 +1.7

Kraft Foods +1.7 +1.6

Sampo +1.7 +1.6

Rio Tinto +1.6 +1.5

Novartis +1.6 +1.1

Total +1.6 +1.3

Seadrill +1.6 +1.6

Enterprise Product Partners +1.6 +1.6

HSBC +1.5 +0.9

Top 10 Total 16.6%

Fundamental statistics Fund Benchmark

Number of stocks 88 2407

Dividend yield 4.8% 2.9%

P/E (this year consensus) 13.2 13.2

Beta 0.92 1.00

Wholesale

25%

44%

28%

42%

48%

10%

0% 10% 20% 30% 40% 50% 60%

$50bn+

$7-$50bn

<$7bn Fund Index

Market capitalisation weighting

Stock selection strategy – thematic areas

Reflecting Threadneedle thematic thinking Source: Threadneedle Investments as at 30 September 2013. The mention of stocks is not a recommendation to deal.

Themes Portfolio strategy Stocks

Emerging market consumer Rising wages support increasing consumption New areas of expenditure Opportunities for global brands

Ambev, Hugo Boss, Las Vegas Sands, NagaCorp

Defensive growth Steady growers with large moats Predictable recurring revenues Improving cost bases and increasing dividends

Imperial Tobacco, Kraft, GlaxoSmithKline, Sydney Airport

US shale energy revolution Growth of shale oil/gas volume in the US Increased capex in energy industry Low cost input for energy consumers

LyondellBasell, HollyFrontier, Enterprise Products

De-leveraging Banks need to down-size balance sheets Distressed sellers offer opportunities Well capitalised players take advantage

Blackstone, Intermediate Capital, Newcastle Investment Corp

22


A significant dividend tilt and a mild growth biasSource: Style Research as at 30 June 2013. Style Skylines™ created with, embodies and/or executes proprietary software and/or data under license from Style Research Ltd. © Style Research Ltd. All Rights Reserved. Must not be redistributed by third parties.

Wholesale

23

Portfolio Style SkylineTM

Added to portfolios in June 2011 with an initial position size of 1%

Funded by sale of Telenor to manage sector overweight position

Increased weight in secular growth

Currently c.0.8% of portfolio2

Held by a number of portfolios across Threadneedle

Investment process in practice – DiGi.com purchase

Teamwork, thorough analysis and disciplined implementationNote: The mention of stocks is not a recommendation to deal.1 Bloomberg as at 30 September 2013.2 Based on a representative account as at 30 September 2013.

Research / debate ImplementationIdea generation

Threadneedle equity teams Discussions with European and

Asian teams highlights that DiGi.com (49% owned by Telenor) is attractive

Macro and themes Growth of the EM consumer Secular growth of mobile data

and smartphone penetration

Company meetings Asian analyst met management

when visiting Malaysia Asian and Global teams met

CFO in London

Yield – 6% initially, 4.7% currently1

Growth – upgraded network expected to reduce costs, improve margins and result in >5%p.a. earnings and dividend growth

Sustainability – zero debt (controlling shareholder needs cash flow)

Analysis focused on earnings drivers and cash flow generation:

1. Revenue growth2. Margin improvement3. Capex profile

Valuation offers significant upside

24

DiGi.com versus Telenor

Continuously seeking stronger investment ideas Source: Datastream as at 30 June 2013, in USD.The mention of stocks is not a recommendation to deal.

Stock performance relative to MSCI AC World index

Fast growing Malaysian

Established Scandinavian80

100

120

140

160

180

200

220

Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13

Re

ba

se

d =

10

0

Telenor DiGi.com

Bought

Sold

25

Case study: (Brazilian Electric Utility)

Global team notice weakness in the stock price Investigate with EM team and external analysts

Threat of change to the regulatory framework is apparent Sold across all global equity portfolios

Dividend yield falls below 4% Review dividend growth – if growth takes the yield above

4% in the next 12 months hold, otherwise sell

Dividend cut Sell unless dividend yield remains above 4% and growth

remains attractive - then we may continue to hold

Target price reached Discuss with the lead analyst, sell if no longer attractive

Change in the investment case Sell if no longer attractive

Portfolio risk considerations Partial or full sale as determined to be optimal

Sell discipline

Proactive managementSource: Datastream as at 30 June 2013, in USD. The mention of stocks is not a recommendation to deal..

60

80

100

120

140

160

180

200

220

Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

Reb

ased

= 1

00

Bought

Sold

CEMIG – relative to MSCI World AC Index

26


Source: Threadneedle Investments as at 30 June 2013. 1 Based on institutional share class with income distributed.

0%

1%

2%

3%

4%

5%

6%

7%

8%

2008 2009 2010 2011 2012 2013

Portfolio MSCI AC World

Portfolio dividend yield versus benchmarkHistoric net distribution yield1

0%

1%

2%

3%

4%

5%

6%

7%

8%

2008 2009 2010 2011 2012

27

Wholesale


Outperformance in most market conditions

Performance versus benchmark (GBP)

18.1% 12.4%

-16.3%

24.6% 19.0%

-2.4%

-19.5%

-6.2%

16.8%20.6%

11.7% 14.0%

2008 2009 2010 2011 2012 YTD

Threadneedle Global Equity Income Fund MSCI AC World

Outperformance1 +3.9% -1.3% +6.7% +4.0% +0.6% +3.6%

Source: FactSet as at 30 June 2013. Fund data is gross of fees. Gross fund returns gross of tax and TER for comparison with indices. Gross performance from 31 March 2010 onwards is based on daily cash flows and valuations, from 1 January 2008 to 31 March 2010 based on Global Close prices, and prior to January 2008 based on 12pm prices. Fund data is quoted on a bid to bid basis with income re-invested at bid. Index data provided by Thomson Financial DataStream. The relative returns shown are calculated on a geometric basis. All data is quoted in GBP. Past performance is not a guide to future returns.1 Outperformance shown is calculated on a geometric basis, against the MSCI AC World Index.

28

Global Equity Income Strategy

15 outperforming quarters out of a total of 23

0.7%

-0.2%

2.1%

-3.0%

1.1%

4.3%

-0.7%

-2.3%

-0.2%

1.6%

-1.5%

3.9% 4.2%

0.8%0.1%

1.5%

2.7%

-0.2%

-2.3%

2.6%

0.1% 0.3%

3.9%

-0.4%

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 2008 2009 2010 2011 2012 2013

Quarterly relative returns since inception (30 June 2007)

29

Source: Threadneedle Investments as at 30 June 2013. Composite data is gross of fees. Outperformance shown is calculated on an geometric basis, against the MSCI World All-Countries Index. Strategy referred to is the Threadneedle Global Equity Income Composite.

Source: Mercer Investment Consulting as at 30 June 2013. Risk and return characteristics calculated monthly in USD versus the MSCI AC World Index. Bars show the positions in the universe of funds of the 95th percentile, upper quartile, median, lower quartile and 5th percentile.

Performance versus peers since inception (30 June 2007)

Top quartile returns

Relatively low tracking error

Top decile information ratio

Top decile consistency

Consistent and superior risk adjusted returns

30


31

Performance profile

Source: FactSet Alpha Tester, CLSA Asia-Pacific Markets March 2013. MSCI-weighted USD total return with monthly rebalancing.Note: Batting average is the consistency of outperformance, calculated as months outperformed / total months in respective market conditions.

(2)

0

2

4

6

8

10

12

Expansion Downturn Slowdown Recovery

(%)

40

45

50

55

60

65

70

75

80

85

(%)

Annualised outperformance Batting average (RHS)

MSCI AC World – Quintile one dividend yield performance since 1995

High dividend investing is suited to most economic conditions

Yield choices

Source: Bloomberg as at 30 September 2013. Equity dividend yields are consensus FY14. The mention of stocks is not a recommendation to deal.

1 Expected medium term dividend growth of a representative portfolio.

32

2.6 2.7

1.8

0.7

3.6

4.45.0

4.1 3.93.5 3.5

4.03.5

4.65.3

5.7

6.4

5.5 5.6

4.7

6.6

5.9

4.7

0

1

2

3

4

5

6

7

8

9

10

US

UK

Ge

rma

ny

Jap

an

Me

xico

Bra

zil

Ind

on

esi

a

Ru

ssia

Vo

da

fon

e

Gla

xoS

mith

Klin

e

To

tal S

.A.

Bla

ckst

on

e

AT

&T

Vo

da

fon

e

Gla

xoS

mith

Klin

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To

tal S

.A.

Bla

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AT

&T

BO

C H

on

g K

on

g

DiG

i.co

m

Ra

dia

nt E

lec.

Na

ga

Co

rp

Va

lid S

olu

coe

s

%

Equities (FY14)Investment Grade (10yr)Government Debt (10yr) Emerging Market Debt (USD 10yr)

Zero income growth

5-10% annual income growth1

Equities continue to offer more attractive returns

6

8

10

12

14

16

18

20

Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13

MSCI World Index MSCI World High Dividend Index

33

PE ratio progression

Valuation of high dividend companies

High dividend stocks remain at a discountSource: Bloomberg as at 30 September 2013. Uses BEst (current annual) PE ratio.

Source: MSCI index data as at 30 September 2013.

34

11.1 11.210.3

13.412.7

14.414.1

11.7

Europe Asia Pacific Japan USA

High dividend index Regular Index

Forward PE ratios

Regional variations exist

Valuation of high dividend companies

35

Valuations by market

High yield defensives are expensive in some markets* Based on yield more than 3%. MSCI universe with monthly rebalancing. Defensive based on MSCI GICS Level 1 sectors. Source: FactSet alpha tester, CLSA Asia-Pacific Markets, March 2013.

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

USA Europe Japan APxJ

(x)

High yield*: Relative PE peak-to-trough High yield* defensives: Relative PE peak-to-trough

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

USA Europe Japan APxJ

(x)

Peak

LT avgCurrent

Trough

0.4

1.8

Expensive

Expensive

Valuations by yield range

High dividend stocks are not expensiveSource: FactSet alpha tester, CLSA Asia-Pacific Markets, March 2013.Note: Aggregated PE is based on weighted average.

8

9

10

11

12

13

14

15

16

17

0-2 2-3 3-4 4-5 5-7 >7

Dividend yield range (%)

PE (x

)

Current Median since 2003

MSCI world: Current PE versus average since 2003

Stocks within 3-7% dividend yield range are still cheaper than low-dividend yield stocks

Expensive compared to

history

36

Key risk metrics changes

Source: Threadneedle Investments as at 30 June 2013.1 Against MSCI AC World Index.

Wholesale

75

80

85

90

95

100

Jun-0

7

Dec-0

7

Jun-0

8

Dec-0

8

Jun-0

9

Dec-0

9

Jun-1

0

Dec-1

0

Jun-1

1

Dec-1

1

Jun-1

2

Dec-1

2

Jun-1

3

0.70

0.80

0.90

1.00

1.10

Jun-0

7

Dec-0

7

Jun-0

8

Dec-0

8

Jun-0

9

Dec-0

9

Jun-1

0

Dec-1

0

Jun-1

1

Dec-1

1

Jun-1

2

Dec-1

2

Jun-1

31

2

3

4

5

6

7

8

Jun 0

7

Dec 0

7

Jun 0

8

Dec 0

8

Jun 0

9

Dec 0

9

Jun 1

0

Dec 1

0

Jun 1

1

Dec 1

1

Jun 1

2

Dec 1

2

Jun 1

3

Ex-ante tracking error (%)¹ Ex-ante beta Active position (%)


37

Sector allocation changes


Sector weightings relative to MSCI AC World Index – 2007 to 2012

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Healthcare InformationTechnology

ConsumerDiscretionary

Telecoms Utilities Materials Industrials Consumer Staples Energy Financials

Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec-12

Source: Threadneedle Investments; MSCI as at 31 December 2012. Based on a representative account of the strategy.

38

Regional allocation changes


-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

North America Latin America and Other Europe inc. UK Japan Asia



Regional weightings relative to MSCI AC World Index – 2007 to 2012

39

Market capitalisation allocation changes


-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

>$50bn $7 to $50bn <$7bn



Market capitalisation weightings relative to MSCI AC World Index – 2007 to 2012

40

Biography

1 Eagle Star Investments became part of Threadneedle in 1994.

STEPHEN THORNBERFund Manager

Stephen Thornber has managed the Threaneedle Global Equity Income Fund since its inception in 2007, and is responsible for several institutional funds. He heads the energy sector research team.

Prior to joining the global equities team Stephen was a UK fund manager and spent five years managing the Threadneedle UK Monthly Income Fund. He has also worked as a fund manager for Eagle Star Investments 1 and for the Kuwait Investment Office.

Stephen has an honours degree in Business and Finance from Plymouth Polytechnic and is an associate member of the UK Society of Investment Professionals.

Threadneedle start date: 1994Industry start date: 1987

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Biography

JONATHAN CROWNFund Manager

Jonathan Crown joined Threadneedle Investments in 2005 as an investment analyst on the credit team. In 2008 he moved from the fixed income team to the global equities team and has been fund manager of global core funds since 2010 and deputy fund manager of the Threadneedle Global Equity Income Fund since 2011. He is also deputy head of the financials sector research team.

Prior to joining Threadneedle, he worked at Dresdner Kleinwort Wasserstein as an investment grade credit analyst covering financials.

Jonathan has an MA (Hons) Degree in Economics from the University of St Andrews.

Threadneedle start date: 2005Industry start date: 2001

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Key Risks applying to all the funds:

Market Risk: The value of investments can fall as well as rise and investors might not get back the sum originally invested.

Currency Risk: Where investments are made in assets that are denominated in multiple currencies, changes in exchange rates may affect the value of the investments.

Investor Currency Risk: Where investments in the fund are in currencies other than your own, changes in exchange rates may affect the value of your investments.

Effect of portfolio concentration: The fund has a concentrated portfolio (holds a limited number of investments and/or takes large positions in a relatively small number of stocks) and if one or more of these investments declines or is otherwise affected, it may have a pronounced effect on the fund’s value.

High Volatility Risk: The fund typically carries a risk of high volatility due to its portfolio composition or the portfolio management techniques used. This means that the fund’s value is likely to fall and rise more frequently and pronounced than with other funds

The following key risks also apply to the Global Extended Alpha Fund:

Liquidity Risk: The fund may hold assets that are not always readily saleable without suffering a discount to fair value. The fund may have to lower the selling price, sell other investments or forego another, more appealing investment opportunity.

Valuation Risk: The fund’s assets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold.

Short Selling Risk: Short selling intends to make a profit from falling prices. However if the value of the underlying investment increases, the value of the short position will decrease. The potential losses are unlimited as the prices of the underlying investments can increase very significantly in a short space of time.

Leverage Risk: Leverage amplifies the effect that a change in the price of an investment has on the fund’s value. As such, leverage can enhance returns to investors but can also increase losses, including losses in excess of the amount invested.

Investment in Derivatives: The Investment Policy of the fund allows it to invest materially in derivatives.

Global equities funds key risks

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For internal use and for Professional and/or Qualified Investors only (not to be used with or passed on to retail clients)

Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested.

Threadneedle Specialist Investment Funds ICVC (“TSIF”) is an open-ended investment company structured as an umbrella company, incorporated in England and Wales, authorised and regulated in the UK by the Financial Conduct Authority (FCA) as a UCITS scheme.

TSIF is registered for public offer in Austria, Belgium, France, Germany, Hong Kong (some sub-funds only), Italy, Luxembourg, the Netherlands, Spain, Switzerland (some sub-funds only) and the UK. Shares in the Funds may not be offered to the public in any other country and this document must not be issued, circulated or distributed other than in circumstances which do not constitute an offer to the public and are in accordance with applicable local legislation.

TSIF is registered with Danish Financial Services Authority for marketing to professional investors only. The Funds may not be offered or sold to retail investors in Denmark.

TSIF is authorised in Spain by the Comisión Nacional del Mercado de Valores (CNMV) and registered with the relevant CNMV's Registered with number 481.

Het compartiment is op grond van artikel 1:107 van de Wet op het financieel toezicht opgenomen in het register dat wordt gehouden door de Autoriteit Financiële Markten. / Pursuant to article 1:107 of the Act of Financial Supervision, the subfund is included in the register that is kept by the AFM.

Shares in the Funds may not be offered, sold or delivered directly or indirectly in the United States or to or for the account or benefit of any “U.S. Person”, as defined in Regulation S under the 1933 Act.

This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.

Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available in English, French, German, Portuguese, Italian, Spanish and Dutch (no Dutch Prospectus) and can be obtained free of charge on request from Austria: Raiffeisen Zentralbank Österreich AG, Am Stadtpark 9, 1030 Wien; in Belgium: J.P. Morgan Chase Bank Brussels, 1, Boulevard du Roi Albert II, 1210 Brussels; in France: BNP Paribas Securities Services, 66 rue de la Victoire, 75009 Paris; in Germany: JP Morgan AG, Junghofstr. 14, 60311 Frankfurt; in Ireland: J.P. Morgan Bank Administration Services (Ireland) Limited, J.P. Morgan House International Financial Services Centre, Dublin 1; in Italy: State Street Bank S.p.A., via Col Moschin 16, 20136 Milano; in Luxembourg: State Street Bank Luxembourg S.A., 49 Avenue J. F. Kennedy, 1855 Luxembourg; in the Netherlands: Fortis Intertrust, Rokin 55, 1012 KK Amsterdam; in Spain: any appointed distributor listed on the Spanish Financial Regulator’s website (www.cnmv.es); in the UK; Threadneedle Investments’ Client Services department P.O. Box 1331, Swindon SN38 7TA.

Important notes (1)

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Important notes (2)

Please read the Prospectus before investing.

For Swiss investors:

Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document , as well as the latest annual or interim reports, which can be obtained free of charge on request, and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents and the instrument of incorporation are available on request from our representative and Paying Agent in Switzerland, BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16,CH-8002 Zurich.

The mention of any specific shares or bonds should not be taken as a recommendation to deal.

This document is a marketing communication. The research and analysis included in this document have not been prepared in accordance with the legal requirements designed to promote its independence and have been produced by Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.

This presentation and its contents are confidential and proprietary. The information provided in this presentation is for the sole use of those attending the presentation. It may not be reproduced in any form or passed on to any third party without the express written permission of Threadneedle Investments. This presentation is the property of Threadneedle Investments and must be returned upon request.

Issued by Threadneedle Investment Services Limited. Registered in England and Wales, Registered No. 3701768, St Mary Axe, London EC3A 8JQ, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority.

Threadneedle Investments is a brand name and both the Threadneedle Investments name and logo are trademarks or registered trademarks of the Threadneedle group of companies.

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Citywire oct 2013

Business

Transcript of Citywire oct 2013