Myddleton Croft Investment Managers Balanced Moderate Risk Model

Myddleton Croft Investment Managers

KEY FACTS
Portfolio Risk Spectrum

August 2011

MANAGERS COMMENT
The Emperor's New Clothes To say that August was a difficult month would be to rather state the obvious. At one point FT All Share was almost 14% down and APCIMS Balanced almost 9%. In our mid August update, which we published on our Lions Teeth blog and by email, we showed that our defensive positioning had done its job and protected our clients capital by being down less than 5% at worst. Markets have recovered in the second half of the month, but remained well down for the month as a whole and we remained strongly ahead of our own benchmark, APCIMS Balanced and FT All Share. One of our longer term views, fleshed out in our blog Five Acts of Hubris, has been that the market has assumed that the current recovery would follow the path of recessions/recoveries of the recent past. This viewpoint is particularly prevalent in America. The investors who had adopted this typical recovery view, would have looked at equity markets through rose tinted glasses; their views would have been supported by strategists and analysts, suffering from the same affliction, who would have tended to overestimate earnings forecasts at the company and index level. Moreover, since growth was seen to be strong, this will have encouraged sentiment and valuation expansion. It will also have encouraged investors to be more cyclical in their equity exposure, since shares would receive the biggest boost of this exaggerated growth. Our opinion differed in that the huge stimulus in Western economies in 2009/10, both fiscal and monetary, falsely boosted underlying growth. Our investment thesis was that having been through a balance sheet recession, the recovery would follow a different path to traditional recoveries; one which would be slower and more protracted. This stems from its genesis (2008/9) where asset values of housing and equities fell sharply, however very high levels of debt remained which needed to be serviced & repaid. This millstone would act as a tax on households, corporates and government spending to the detriment of growth. We considered that the transitory nature of the stimulus would give way to a lower level of organic growth, as we called it "The Emperor's New Clothes". The wake- up call for investors of weak GDP, Employment, and Manufacturing data in the States is just like the child in the denouement of that fairy tale calling time on the pretence. What is unclear is whether the Emperor (or the market) is dshabill (recession) or dressed rather threadbarely (very slow sub-trend growth for several years). In our opinion, that is what markets are considering now so are in a reset phase as they revise their expectations for growth and market valuation down to the new, slower growth reality. Whilst we have been quite cautious and have talked about our concerns about growth and valuations over the last year or so, you should not mistake this for being anti equity or permabearishness. We would be only too happy to take a justifiably positive view and be talking more bullishly however, you must use your own judgement as to whether you want to hear only bullish news or the full version which is grounded in reality. We were not idle when markets have sold off and have added to equities near the lows of the month. One of these purchases was to add to our exposure to gold miners, which we consider very attractively valued, given the huge appreciation in the gold price. During 2010, gold miners, using a proxy of Market Vectors Gold Miners ETF (red line), performed a little better than the gold spot price (blue line). In 2011 they have materially underperformed by 25%. The disparity in 2011 looks anomalous but even in 2010 we would have expected gold miners to have more markedly outperformed given their operational gearing to the gold price.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Addendum: It looks like the Swiss have had enough of being a safe haven and have in effect devalued by placing a floor under the Swiss Franc/Euro exchange rate at 1.20, due to the damage being done to Swiss exporters and economy. In 2011 the currency rose dramatically. This should imply a greater proportion of the safe haven trades move to gold.

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Defensive Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 40:60 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 30% and 50% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate..

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Cautious Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 45:55 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 35% and 55% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Moderate Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 50:50 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 40% and 60% for each asset class, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Adventurous Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 55:45 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 45% and 65% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Highly Adventurous Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 60:40 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 50% and 70% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Balanced Speculative Risk Model
KEY FACTS
Portfolio Risk Spectrum

August 2011

PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 80:20 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 70% and 90% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

1 2 3 4 5 9

Investment Profile

Balanced

PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).

David Cowell
Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.

3 Year Rolling Volatility

Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.

For Further Information Call :

0113 274 7700

Email : info@mcim.co.uk

Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up and any opinions expressed are subject to change and may not be current views.

Asset Allocation

Performance Statistics

Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.