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Asset Size - Sector

Asset Management in Turkey

As of 30/09/2013

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Asset Size - Sector

Since 2008;

With a size of $12.3 billion, pension funds currently have 40% market share Money market funds market share has declined gradually as funds excluding-MMF came into prominence Discretionary portfolio management business has doubled

2008 2009 2010 2011 2012 Sept 130.00

5,000.00

10,000.00

15,000.00

20,000.00

Money Market FundsExcluding MM FundsPension FundsDiscretionary Portfolio Management

$ Billion

Money Market Funds

37%

Excluding MM Funds

12%

Pension Funds40%

Discretionary Portfolio Management

11%

As of 30/09/2013

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Sector Analysis – A Growing Sector in Turkey

In the forthcoming period, interest on asset management

sector will increase parallel to decreasing interest rates and

stabilisation.

Turkey has the lowest savings ratio among countries with

GDP more than $100 billion. Incentives aimed at increasing

the savings ratio support asset management sector.

(PPS/GDP in Turkey 2%,OECD avg 12%)

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Mutual Fund Sector/GDP (%)

Country Mutual Funds

Excl. MMF Mutual Funds

Brazil 39.7 38.2

South Africa 31.6 22.0

South Korea 28.5 21.0

Turkey 2.3 0.6

Sector Analysis – Total AUM is expected to reach $45 billion by 2015

(billion TRY) 2011 2012 2013T 2014 2015GDP(Current prices) 1.294 1.435 1.571 1.740 1.933 Asset Management Sector Size 49,5 56,3 65,3 75,4 89,6Mutual Fund Sector Size 29,9 29,5 31,5 31,3 31,1Pension Funds Sector Size 14,3 20,3 26,4 35,6 48Discretionary Portfolio Man. Size 5,3 6,5 7,4 8,5 10,5Asset Management Sector/GDP 3,8% 3,9% 4,2% 4,3% 4,6%Mutual Funds / GDP 2,3% 2,1% 2,0% 1,8% 1,6%PPS/GDP 1,1% 1,4% 1,7% 2,0% 2,5%

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Market Leader of Pension Funds

Market Leader of Discretionary Portfolio Management

Mutual Funds Pension FundsDiscretionary

Portfolio Management

1,3 Billion USDAsset Size

%8,5 Market Share

2,7 Billion USDAsset Size

%22 Market Share

1 Billion USD Asset Size

%25 Market Share

2000

Founded as AKBANK subsidiary

Total AUM

5 Billion USDAsset Size

%16 Market Share

As of 30/09/2013

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Services

Mutual and Pension Fund Management

Management of investment funds founded by Akbank Management of pension funds founded by AvivaSA and Groupama Experienced and qualified portfolio manager staff Investment strategies on variable asset classes Superior risk management and compliance/internal control mechanisms

Discretionary Portfolio Management

Client specific asset allocation, portfolio diversification and investment strategies A focused approach on risk/return expectation and management Periodical reporting and portfolio monitoring

Investment Consulting Providing broad perspective to “Individual Segment” clients on investment strategies Investment ideas and regular market reports Identification of client risk profile

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Investment Instruments

Among mutual funds, MM, fixed income securities and capital protected funds are at the forefront Among pension funds. public borrowing and balanced funds have an significant size

Mutual Funds Pension Funds

As of 30/09/2013

27%

3%9%

0%6%

55%

1%

Balanced (Flexible & Composite)

FX Sovereign Debt

Equity

Money Market

Bill & Bond

International Securi-ties Funds

10%

5% 3%

62%

6%

4% 9%

1%

Bill & Bond

B- Flexible

Equity

Money Market

Commodity

Foreign Securities

Capital Protected

Others

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Investment Fund Universe of Ak Asset Management

Fixed Income Securities Flexible Funds Equity Commodity Foreign Securities

Exp

ecte

d R

etur

n

Potantial Risk-1 4 9 14 19 24-1

4

9

14

19

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Capital Protected

Money Market

Short TermBill Bond

Sukuk

Prem. Bill&Bond

Serbest

Gold

Corporate Bond

Long Term Bill&Bond

Flexiable

1-1 Flexiable

Eurobond

Foreign securities

FT America

FT Europe

FTAsiaFT BRIC

FT LatinAmerica

Equity Prem. Equity

BIST-30

CommodityBIST Dividend 25

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Achievements And Awards

The First;

Gold Fund (2006) Capital Protected Mutual Fund (2007) Risk Management Software (2007) Turkish AM company to sign UN Principles for Responsible Investment (2010) Market neutral long/short hedge fund (2010) Commodity Fund of Funds Basket (2011) TRY Money Market Fund in Japan

Awards

Best Investment Management Company in Turkey – World Finance 2011 Best ESG Asset Manager in Turkey – World Finance 2011 Best Asset Manager in Turkey – EMEA Finance 2011 Best Investment Management Company in Turkey – World Finance 2012 Structured Products Best in Turkey – Structured Products Europe Awards 2013

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AK ASSET MANAGEMENT- Institutional Investment Services

Investment Process

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Fixed Income Investment Process

Fixed Income investment style is a combination of Top–Down & Spread Trading. Fixed Income Investment Team aims to achieve the highest possible return measured against the benchmark. The risks related to movements in bond prices, resulting from interest-rate fluctuations and currency developments and to some extent changes in the quality of the corporate held portfolio. 

Investment StyleThe investment style is a combination of Top – Down & Spread Trading.Top-down approach: Analysis of economic conditions and duration determinationSpread trading: Improvement of the bond portfolio yield without increasing the risk level, taking advantage of discrepancies occurring in the bond market

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Fixed Income Committee (Scorecard Meetings)

Main subsections of the scorecard meetings are:

Global Markets

Global Macroeconomy

Global Interest Rate Outlook

Domestic Macroeconomy

Banking and Central Bank of Turkey (CBRT) Policy

Political Outlook

Quantitative Score (Algorithm)

Fund Managers’ Views

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Fixed Income Committee – Global Markets

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Fixed Income Committee (Scorecard Meetings)

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Fixed Income Committee (Scorecard Meetings)

Committee analyzes the global central bank policies and rate decisions

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Fixed Income Committee (Scorecard Meetings)

Committee observes asset swap spreads, breakeven inflations and yield curve structure.

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Capital Protected Funds

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IInvestment Process

Capital Protected Funds

For getting the highest return in accordance with the option structure and underlying asset Research on variable assets, including equities, ETFs, FX, Commodity Choose the best option structure minimizing the option cost and maximizing the potential cash settlement Auction within international investment banks for option trade on Fund’s Trade Date

Investment Universe Research Option Structure Research Execution

G-7 Equity Indices Emerging Countries

Equity Indices

BRIC FX G-7 FX TL FX

Long Only Asset Basket Vol Controlled Indices

Fund Linked Indices

Government BondsCorporate Bonds

Equity Universe FX Universe Prop Indices Commodities Fixed Income Portfolio

Brent , Gold Industrial Metals

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IInvestment Process

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Exotic Option Structure Examples:

Trade Date: 20/09/2013Final Valuation Date: 14/11/2014Underlying: Akbank Güvenli Strateji Index ( PROP INDEX)Bloomberg Ticker: IND1AKDI Index

Akbank Safe Strategy Index fund is an fund linked derivative product. The fund aims to protect %100 of initial capital invested on the fund. Also, it provides the participation to Akbank Safe Strategy Index appreciation. The index invests on Akbank Mutual Funds, which are located on Luxembourg and trading in EUR. The index has its dynamic momentum strategy, which determines if the index will invest on Equity or Fixed Income Funds. If Akbank Equity closing price is higher than last 30 days price average; the index invests on %50 Fixed Income+%50 Equity Fund. If vice versa the index invests on Fixed Income Funds and on Turkish rates, namely 3m TRY Libor. In addition to momentum strategy; the index has volatility control mechanism which aims to guarantee that the realized volatility of the index will be equal to %10. Depending on realized volatility; the index either increases or decreases the leverage until realized volatility is equal to target volatilty.This fund linked derivative strategy is first used by Ak Asset Management in Turkey.

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Exotic Option Structure Examples:

Trade Date: 12/09/2012Final Valuation Date: 10/09/2013Underlying: iSHARES ASIA TRUST- iSHARES FTSE A50 CHINA INDEX

Bloomberg Ticker: 2823 HK EquityBarrier Level: %125 If a Barrier Event has occurred: Notional Amount * Rebate Where Rebate = %11The fund invests on iShares ETF, which is the most liquid financial asset to be exposed to China Equity Index. Because we bought knock-out call rather than simple vanilla call in our portfolio, we managed to provide higher than %100 participation to appreciation of the China index. The fund matured on September the 9th 2013 with 7,1%. However because China index knocked out during the tenor of option we managed to get high rebate multiplied with participation ratio. At the end, our fund’s return was 11,64% , which is much higher than China Index return.

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Exotic Option Structure Examples:

Trade Date: 30/04/2012Final Valuation Date: 15/05/2013Underlying: USDTRY ve EURTRY

Fon, vade sonunda USD/TL ve EURO/TL kurlarının belirlenen bariyer seviyelerinin altında kalması durumunda %4 sabit getirinin üzerine belirlenen ek kupon getirisinden iştirak oranı ölçüsünde yararlanma imkanı sunmaktadır. Fon vade sonunda %9,86 getiri elde etmiştir.

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Exotic Option Structure Examples:

Trade Date: 18/10/2012Final Valuation Date: 15/10/2013Underlying: İtalya ve İspanya EndeksleriBloomberg Ticker: IBEX & MIB

Getiri üzerinde Knock-out: %25Fon Avrupa Hisse Senedi Endekslerine yatırım yapmaktadır. Bu sene en iyi getiri elde eden endeksler arasında yer alan İspanya ve İtalya endekslerine yatırım yapmaktadır. 2012’de Çevre Avrupa Ülkeleri olarak adlandırılan borsalara çoğu yatırımcı yatırım yapmamıştı ancak biz yatırımcılara doğru riskli ürünleri seçerek anapara koruması da sağlayıp yüksek getiri imkanı sunduk.Fon vade sonunda %17.7 getiri elde etmiştir.

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