Citywire Germany

June 2012

Challenging times in markets require thinking outside the box

Presented by:

Miles Geldard – Fund Manager

Institutional investors and advisors only. Not for retail investors.

Fund manager views at the time of presentation and will change in the future.

1

Investment outlook

European sovereign issues require major structural changes. Buying by official

institutions is not a long term solution

Excessive debt at governmental and personal levels in developed economies

Sovereign bonds overpriced and certainly not risk free

“Fiscal cliff” in the US can’t be ignored but politicians will not want to tip the economy

into recession

Turn in the US housing market should be supportive

Significant valuation anomalies in forex cross rates: USD offers value

Risk assets offer value but macro-economic dangers are significant

Convertibles provide lower risk exposure to equities

Relative valuation of bonds and equities is extreme…

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12

Div

iden

d Y

ield

/10 y

ear

go

vern

men

t yie

ld

Div Yld/10yr 6 Exp MvAv +/-2stdev

Source: Bloomberg, Jupiter 31.05.12.

UK Forward Dividend Yield/Bond Yield Ratio

…but are equities cheap or bonds expensive?

0%

2%

4%

6%

8%

10%

12%

14%

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

UK CPI YoY UK 10 Year Gilt

3

“Bonds should come with a warning label” Warren Buffett

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

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

Source: Bloomberg, 31.03.89 to 31.12.11.

Real interest rates are -2.2%

Western bond markets will not turn Japanese

-3

-1

1

3

5

7

1993 1995 1996 1998 2000 2002 2004 2006 2008 2010

10 Y

ear

Real

Rate

(10yr

– C

PI)

US

UK

DE

JP

Source: Bloomberg , Jupiter 31.05.12.

Real 10 year yields

Nominal yields similar, but Western bonds have negative real yields

Current Average

-0.68% 2.38%

-1.35% 3.22%

-0.83% 2.88%

0.45% 1.99%

5

Total debt load of major economies is very high

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

obligations

Source: ZeroHedge 23.11.11.

Jupiter Strategic Total Return Fund is a conservative absolute return fund

6

Target Risk

Target Return

Money Market &

Liquidity Funds

Lower Risk

Absolute Return

Funds

Traditional Gov’t

Bond Funds

Corporate Bond

Funds

Traditional

Equity & Higher

Risk Absolute

Return Funds

High Yield &

Emerging Equity

Funds

Diversified core investments

Aggressive

funds enhancing

portfolio returns

Cash reserves & cautious

section of portfolio

Jupiter Strategic Total Return Fund

Multi-asset strategy that has evolved since 1998

Global multi-asset portfolio with

absolute return aim

Seeking cash +3% over a rolling

3 year basis

Target volatility <5%

Wide opportunity set of direct

investments

7

Global

Multi-Asset

Portfolio

Convertibles

Equities

Corporate

bonds Money

markets

Currency

Sovereign

bonds

These are not fund restrictions but manager aims.

The portfolio managers

Managed multi-asset portfolios for 14 years

Previously head of strategic and tactical

asset allocation at JP Morgan

Proven track record in bonds, currencies,

equities and convertibles

Hands-on experience working in Asia, Africa,

Middle East and Europe

Industry recognition: Sauren gold medal

winners 2009 and 2011 (Germany)

Proven team with long experience in different regions and markets

8

Fund Manager:

Lee Manzi

Head of Team

& Fund Manager:

Miles Geldard

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

Fund manager support and idea sharing

Speed of decision making and flexibility within global fund manager

Jupiter is a highly regarded and

established firm in UK since 1985

Substantial employee ownership

aligns our interests with yours

No investment committees or

mandatory house views

But… active discussion of macro and

micro with experienced managers

9

Multi-Asset and Fixed Income team

Jupiter Merlin Fund of Funds

team

Emerging Equity team

Financials team

Developed Equity teams

Our investment philosophy

Long term, value driven

Flexible asset allocation within global opportunity set

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

reward to implement views

Maximum limits, no minima, no neutral positions

If a core asset class is overvalued, then have none

No funds* or structured products

Conservative strategy seeking asymmetric return profile

10

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

11

Top down macro views combined with bottom up security selection

Asset allocation

decisions

Formal monthly review of a range of macro factors

Proprietary value driven

equity screening model

Jupiter Equity and Fixed

Income Managers

Security selection

Quantitative screening of global opportunity set

Followed by qualitative research of short list

Flexibility in choice of investment instrument to implement view

Long term strategic views across assets, regions and sectors

Opportunistic and agnostic to asset class, geography and sector

Seeking most favourable risk-reward themes

Active discussion / interaction with

macro thinkers in Jupiter

Proprietary credit scoring models

12

Portfolio construction, risk controls and limits

Position sizing

Position size dependent on:

Conviction of view

Volatility of security

Liquidity of security

Diversification from other holdings

Stress testing

of positions

and portfolio

Based on real world experience

learnt over a number of

market cycles

Equity: Bonds: Currency:

Maximum 40%

(including CB delta)

Highly diversified holdings

Maximum 5 year duration

Average implied credit quality

investment grade, albeit with no

credit limitation on individual issues

Maximum non-base currency 30%

Lower exposures on single cross

currency positions

Target volatility <5%

Focus on liquidity and traded securities

Portfolio transparency

Not fund restrictions, represents fund manager style.

0.09%

0.13%

0.13% 0.16%

0.11%

0.11%

0.14% 0.07% 0.03%

0.04%

0.10% Long USD Short AUD

Equity

Convertible Bonds

Financial + Corporate Debt

Long S&P Short Russell

Short Sovereign

Bond Futures

Long MXN Short ZAR

Long USD Short JPY

Long USD Short EUR

Strategic Total Return – risk budget

Strict risk budgeting for each position

and portfolio

Stop loss disciplines

Maximum limits but no minima

Blend of traditional strategies with

relative value

Seeking uncorrelated positions

Diversified, liquid portfolio:

10 strategies

74 securities

13

Risk budgeting – Absolute VaR per strategy

Source: Jupiter 18.06.12. Note: The VaR shown is the 99% 1-day VaR for the strategy in isolation weighted by the position size - it does not take into account the correlations between strategies and so overstates the risk in the portfolio. The total portfolio 1-day 99% VaR is 0.23%.

Short French

Sovereign

Bond Futures Sovereign

Debt

Jupiter Strategic Total Return (STR)

Lower risk fund

Proven investment approach

Experienced and established team

Flexible asset allocation

Diversified portfolio

Low correlation to traditional

asset classes

14

Appendix

16

Currency exposure: Deviation from base currency

Asset allocation Key characteristics

Interest rate exposure by maturity (duration)

Source: Jupiter as at 30.04.12. *Note: Corporate Bonds includes FRN.

Current portfolio positioning

-20%

-10%

0%

10%

20%

30%

40%

So

vere

ign

Bo

nd

s

Co

rpo

rate

Bo

nd

s

Bo

nd

Fu

ture

Co

nv

ert

ible

Bo

nd

s

Eq

uit

ies

-6%

-4%

-2%

0%

2%

4%

6%

USD MXN HKD Other EUR JPY AUD ZAR-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

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

Years

EUR USD GBP Other

Fund size €126m

Net equity exposure (including hedges) 8%

YTM/P 0.94%

Current yield 2.46%

Modified duration 0.01 years

Average explicit credit rating A+

Average implied credit rating A

No. securities 82

Fund volatility 1.87%

17

Proprietary equity screening model factors

Value Factors

Price / Sales

Price / Free Cash Flow

Dividend Yield

Price / 8yr Average Earnings Per Share

Quality Factors Debt / Assets

1yr Earnings Per Share Growth

Price Momentum Price momentum of security; biased toward

medium term price momentum

Built on FactSet, all historical data, no forward looking assumptions

18

Flexible exposure to asset classes based on

macro-economic insights. Aims to avoid over-priced assets

Bottom up security selection: Equity, convertible, credit

Equity-related: Regional and sectoral thematic bets

Interest rate:

Duration positioning

Relative value; inter / intra yield curve

Forex: Non core, reserved for long term structural anomalies

Futures used for hedging and relative value strategies

Options: Premium paid to improve asymmetric return profile

Sources of return

19

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

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

AU

D/U

SD

FX

Rate

A

ustr

alian

go

vt.

bo

nd

fo

reig

n o

wn

ers

hip

Australian govt bond foreign ownership AUDUSD

Source: Reserve Bank of Australia, Bloomberg 31.12.11.

20

Japan is a rentier economy

Source: MizuhoSecurities, Japan MOF, July 2010.

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Trade balance ratio Income ratio

Contribution from trade balance and income to the current account

Convertibles provide exposure to equities

Source: Nomura 13.06.12.

Convertible bonds richness / cheapness to fair value

21

-10

-8

-6

-4

-2

0

2

4

Jan 11 May 11 Aug 11 Dec 11 Apr 12

Japan AEJ Europe Americas

The portfolio managers – biographies

22

Proven, experienced investment team with award winning track record

Lee Manzi

Fund Manager

Lee started his fund management career at JP Morgan Asset Management (formerly Flemings) in 1998, working in the fixed income

team. After spells working on the European fixed income team and UK desk, he took over the management of the firm’s UK Sterling

accounts before joining the Global Portfolios Group in 2001 where he managed the fixed income portion of the balanced funds

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

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

Miles Geldard

Head of Team & Fund Manager

In the 13 years prior to his appointment Miles built and managed global convertibles, fixed income and multi asset franchises.

In 2009, he was recognised in the Sauren Awards with three gold medals in the convertibles category, two gold medals in the

absolute return category and two gold medals in the multi strategy international category

Having spent much of his early career managing derivative teams in the Far East, Miles became an adviser on fixed income portfolio

management and foreign exchange to the Central Bank of Botswana in 1994. In 1997 he joined JP Morgan Asset Management

(formerly Jardine Fleming) in Hong Kong and became Head of Fixed Income, Currencies, Convertibles and Balanced

In 2004 Miles moved to London and became Chief Investment Officer and Head of the Global Multi Asset Group and Global Strategy

Team at JP Morgan Asset Management. In addition to building the convertibles business, he also built and managed the JPM Capital

Preservation Fund, a global multi asset absolute return fund. Miles left JP Morgan in 2006 to join RWC Partners (previously MPC

Investors), where he founded and headed the multi asset and convertibles team

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

Disclosure

Jupiter Asset Management Limited (‘JAM’) is registered in England and Wales (no. 2036243). The registered office is 1 Grosvenor Place, London SW1X

7JJ. JAM is authorised and regulated by the Financial Services Authority for business conducted in the UK whose address is 25 The North Colonnade,

Canary Wharf, London E14 5HS.

This presentation is intended for investment professionals and not for the benefit of private investors. However any one attending the presentation or who

has the opportunity to view the accompanying slides should bear in mind that the value of an investments and the income from it can go down as well as

up. It may be affected by exchange rate variations and you may not get back the amount invested. Initial charges are likely to have a greater proportionate

effect on returns if investments are liquidated in the shorter term. Quoted yields are not guaranteed. Current tax levels and reliefs will depend on the nature

of the holding and details are contained in the key features documents. Past performance should not be seen as a guide to future performance.

This document contains information based on the MSCI AC Pacific and MSCI Pacific Indices. Neither MSCI nor any other party involved in or related to

compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be

obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness

for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party

involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other

damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted

without MSCI’s express written consent.

For your security we may record or randomly monitor all telephone calls. If. Any data or views given should not be construed as investment advice. Every

effort is made to ensure the accuracy of the information but no assurance or warranties are given.

The Jupiter Strategic Total Return Fund can use derivatives to speculate as to the direction a market index, currency or share will move and can cause

periods of high volatility. The Fund may incur losses greater than its initial investment into derivative contracts (although investors will not incur any

liabilities beyond their initial investment). The Fund is able to gain market exposure in excess of its net asset value which can increase or decrease the

value of units to a greater extent than would have occurred had no additional market exposure beyond the Fund’s net asset been in place. The Fund’s

value is unlikely to mirror increases and decreases in line with the respective markets it is invested in to. Further information is contained within the

simplified prospectus.

This fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state, the fund prospectus is available from Jupiter

on request.

This document is for information only. In particular, it does not constitute an offer or solicitation in any jurisdiction where it is unlawful or where the person

making the offer or solicitation is not qualified to do so or the recipient may not lawfully receive any such offer or solicitation. It is the responsibility of any

person in possession of this document to inform themselves, and to observe, all applicable laws and regulations of relevant jurisdictions. The information

and any opinions contained herein have been obtained from or are based on sources which are believed to be reliable, but the accuracy cannot be

guaranteed. No responsibility can be accepted for any consequential loss from this information.

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