eam fund presentation final

EAM FundPublic 2015

EAM Fund

Investment – Mandate

Client Profile:UK Long-term fund

Investable Funds:£10 million

Investment Universe: Global Equities (including ETFs and Index Futures),

Currency and commodity futures

Benchmark: MSCI World(IWRD) in Pound Sterling (£)

Objective: Outperformance subject to maximum ex-ante

tracking error of 16% per annum

Limits and constraints:Maximum tracking error: 16% per annumMaximum single position: £1 millionMaximum leverage: 50% of portfolio

EAM Fund

Statement of Investment – Principle

Mandate

Macroeconomic Outlooks

Sector Outlooks

Assessment

Portfolio Optimisation

Stock Screening

Time

Process

EAM Fund

Slowing global sales

China- slow growth

Eurozone - recession

Japan - recession

Russia - inflation

Shrinking trade deficit

Falling unemploym

ent rate

Increase consumer spending

Rise in consumption expenditure

Increased Consumer Price Index

Strong GDP growth

Rise in consumer

spending and confidence

Low input cost, High Disposable

Income

Reduced inflation

Improved current account

balances

TRENDS:

FUTURE OUTLOOK:

PRESSURES:

Macroeconomic – US Economy

EAM Fund

Political Instability

General elections

Eurozone – risk and pressures

Russia and Middle East - geopolitical

unrest

Increased

household

spending

Reduced cost of

production

Increase in tax revenu

es

Inflation-

downward trend

Fastest GDP

growth in 17 years

Economy expected to

grow

Fair growth from major

sectors

Inflation nearing zero –

rebound predicted

GDP growth predicted

Improved current account

balances

TRENDS:

FUTURE OUTLOOK:

PRESSURES:

Macroeconomic – UK Economy

EAM Fund

Exchange rate volatility

Capital Flow volatility

Inflationary pressures

Capacity constraints

Market Slowdown

Toll of global financial crisis

Large population numbers

Largest GDP growth figures

BRICS Development

Bank

TRENDS:

FUTURE OUTLOOK:

PRESSURES:

Macroeconomic – Emerging Markets

Sector Outlook

The United States The United Kingdom

Financial Service

Industrial

Consumer Cyclical

Healthcare

Technology

Service

Basic Material

Financial Service

Healthcare

Industrial

EAM Fund

Top Down Approach

Stock Screening

No. RIC Company Name S&P 500 or FTSE100 Sector Industry

1 AMP.N Ameriprise Financial lnc S&P 500 Financial service Asset management2 CBS.N CBS Corp S&P 500 Consumer Cyclical Media - Diversified3 FDX.N FedEx Corp S&P 500 Industrials Integrated Shipping & Logistics4 GNW.N Genworth Financial lnc S&P 500 Financial Services Insurance - Diversified5 ICE.N Intercontinental Exchange lnc S&P 500 Financial Services Financial Exchanges6 MCK.N McKesson Corp S&P 500 Healthcare Medical Distribution7 KORS.N Michael Kors Holdings Ltd S&P 500 Consumer Cyclical Apparel Manufacturing8 PH.N Parker-Hannifin Corp S&P 500 Industrials Diversified Industrials9 RCL.N Royal Caribbean Cruises Ltd S&P 500 Consumer Cyclical Leisure10 LUV.N Southwest Airlines Co S&P 500 Industrials Airlines11 TWX.N Time Warner Inc S&P 500 Services Entertainment - Diversified12 VMC.N Vulcan Materials Co S&P 500 Basic Materials Building Materials13 WHR.N Whirlpool Corp S&P 500 Technology Consumer Electronics14 AAPL.OQ Apple lnc S&P 500 Technology Consumer Electronics15 CELG.OQ Celgene Corp S&P 500 Healthcare Biotechnology16 GILD.OQ Gilead Sciences lnc S&P 500 Healthcare Biotechnology

17 MYL.OQ Mylan NV S&P 500 HealthcareDrug Manufacturers - Specialty & Generic

18 AHT.L Ashtead Group PLC FTSE 100 Industrials Rental & Leasing Services19 HSBA.L HSBC Holdings PLC FTSE 100 Financial Services Banks - Global

• Large-Cap Markets (S&P 500, FTSE 100) • Sector analysis

GARP Strategy (Customised)

PEG Ratio < 1

5 yr CAGR EPS > Avg TRBC sector

Total liab / asset < Avg TRBC industry

Total: 19 stocks + emerging market ETF The iShares MSCI Emerging Market ETF

EAM Fund

Currency Hedging

80.00%

10.00%

10.00%

Portfolio Currency Exposure

USDGBPOthers (Mainly CNY)

GBP/USD Currency Chart (Source: Thompson Reuters)

USD/CNY Currency Chart (Source: Thompson Reuters)

EAM Fund

Variable DescriptionObjective Tracking Error Maximum 16%

Limitations

Gearing Maximum 50%

Single Position Maximum 10%

Selling Short Allow

Constraint Variables

EAM Fund

Type Securities’ name Country Weighting Total weight Active

Ameriprise Financial lnc Equity US 6.90% 94.82%

Apple lnc Equity US 6.68%Ashtead Group PLC Equity UK 5.25%CBS Corp Equity US 7.22%Celgene Corp Equity US 3.85%FedEx Corp Equity US 4.40%Genworth Financial lnc Equity US 1.65%

Gilead Sciences lnc Equity US 2.51%HSBC Holdings PLC Equity UK 5.99%

Intercontinental Exchange lnc Equity US 3.70%

McKesson Corp US 3.43%Michael Kors Holdings Ltd US 1.93%Mylan NV US 3.85%Parker-Hannifin Corp US 9.41%Royal Caribbean Cruises Ltd US 2.96%

Southwest Airlines Co US 2.35%Times Warner Inc. US 7.36%Vulcan Materials Co US 6.12%Whirlpool Corp US 0.80%iShares MSCI Emerging Markets ETF N/A 8.47%

Passive iShares MSCI World UCITS ETF N/A 5.18% 5.18%

Total 100.00%

Weighted optimised of each securities

EAM Fund

£

Parameters ValueSharpe Ratio 0.6671Tracking Error 5.86%Beta 1.2633Gearing 0.00%

Portfolio Parameters

EAM Fund

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0.15%

-1.22%

-0.14%

1.33%1.72%1.58%

3.20%

4.04%4.12%3.85%3.91%3.73%

3.24%

1.60%1.02%

2.75%2.82%

2.10%2.42%

3.48%

5.08%

March, 9 2015 April, 10 2015

EAM Fund

Portfolio Performance - Monitoring

EAM Fund net R

eturn

Index Return

EAM Fund St

. Devia

tion

Index St. D

eviation

0.0000%4.0000%8.0000%

12.0000%16.0000%20.0000%

4.9953% 4.8088%

17.9144% 16.3153%

EAM Fund VS Index

Gross Return 5.0953%Management Fee 0.1000%Tracking Error 1.8280%

0.2864%

0.1864%

EAM Fund

Gross Relative ReturnNet Relative Return

EAM Fund

Portfolio Performance - Statistics

Asset allocation contribution -0.37543%Security Selection contribution 0.66184%Portfolio excess return 0.28640%

Total Developed Markets Equities - Long Po-sitions

North America

Europe ex UK

UK

Developed Africa / Middle East

Developed Asia Pacific

92.1928%

78.2722%

0.6946%

11.6604%

0.6637%

0.9018%

100.0000%

61.3800%

16.3500%

8.5400%

0.2300%

13.5000%

Overall Developed Markets Equities Regions

Initial Benchmark Weights Opening Portfolio Weights

Total Emerging Market Equities

Latine America

Asia Pacific

7.8024%

1.1395%

6.6628%

0.0000%

0.0000%

0.0000%

Overall Emerging Market Equit -ies

RegionsInitial Benchmark Weights Opening Portfolio Weights

EAM Fund

Portfolio Attribution – Total risk Asset Net


North America

Europe ex UK

UK



92.1928%

78.2722%

0.6946%

11.6604%

0.6637%

0.9018%

100.0000%

61.3800%

16.3500%

8.5400%

0.2300%

13.5000%



Total Developed Markets Equities - Long Positions

North America

Europe ex UK

UK



4.4497%

4.5499%

5.5374%

3.1573%

12.7260%

5.5374%

4.8088%

4.5800%

4.5500%

1.5800%

11.5800%

8.0900%

Benchmark Total ReturnsPortfolio Total Returns

-0.3754%

0.7737%

-0.7123%

0.0493%

0.0502%

-1.0192%

-0.3311%

-0.0236%

0.0069%

0.1839%

0.0076%

-0.0230%

Stock Selection Asset Allocation

EAM Fund

Portfolio Attribution - Contribution



North America

Europe ex UK

UK



92.1928%

78.2722%

0.6946%

11.6604%

0.6637%

0.9018%

100.0000%

61.3800%

16.3500%

8.5400%

0.2300%

13.5000%




Latine America

Asia Pacific

7.8024%

1.1395%

6.6628%

0.0000%

0.0000%

0.0000%



EAM Fund

Portfolio Attribution – Total risk Asset Net



Latine America

Asia Pacific

7.8024%

1.1395%

6.6628%

0.0000%

0.0000%

0.0000%




Latine America

Asia Pacific

12.7260%

12.7260%

12.7260%

0.0000%

0.0000%

0.0000%

Benchmark Total ReturnsPortfolio Total Returns


Latine America

Asia Pacific

0.0000%

0.0000%

0.0000%

0.9929%

0.1450%

0.8479%

Stock Selection Asset Allocation

EAM Fund

Portfolio Attribution – Contribution (cont.)


EAM Fund

Stock Performance

EAM Fund

Portfolio Value & Cash

Asset ClassOpening

Portfolio Values

Opening Portfolio Weights

Initial Benchmark

Weights

Dividends & Interest

Closing Portfolio Values

Closing Portfolio Weights

Portfolio Total

Returns

Benchmark Total

Returns

Weighted Contributions to Excess

Returns

Asset Allocation

Stock Selection

£ % % £million £million % % % % % %

TOTAL RISK ASSETS-Net £9,999,521 99.9952% 100.0000% £0.00 £10,509,045 99.9954% 5.0955% 4.8088% 0.2864% -0.3754% 0.6618%Cash & Currency Instruments* £479 0.0048% 0.0000% £0.80 £481 0.0046% 0.1667%

Borrowing in Base CurrencyDeposits in Base Currency £479 0.0048% £0.80 £480 0.0046% 0.1667%Other Currency exposures

*Excludes cash backing for FuturesTOTAL ASSETS £10,000,000 100.0000% 100.0000% £10,509,525 100.0000% 5.0953% 4.8088% 0.2864% -0.3754% 0.6618%

TOTAL RISK ASSETS-Net

Cash & Currency Instruments

TOTAL ASSETS

£9,999,520.58

£479.42

£10,000,000.00

£10,509,045.24

£481.02

£10,509,525.46

Closing Portfolio Values Opening Portfolio Values

Portfolio Total Returns Benchmark Total Returns4.6500%

4.7000%

4.7500%

4.8000%

4.8500%

4.9000%

4.9500%

5.0000%

5.0500%

5.1000%

5.0953%

4.8088%

Total Return

Market & Company Commentary

Company Name Country Earnings Fundamental Relative Valuation Risk Outlook Comment

AMERIPRISE FINANCIAL INC US + 0 + + + AMP is more bullish than industry average.

APPLE INC US + 0 + + + AAPL is more bullish than the Computer Hardware Industry average and currently trading at a significant discount based on Trailing P/E, Forward P/E, and Forward PEG.

ASHTEAD GROUP PLC UK + + - 0 + On days when the market is up, AHT shares tends to outperform the FTSE 350 index.

CBS CORPORATION US + - + + + Compared to the Broadcasting Industry, CBS is currently trading at a significant discount based on Trailing P/E, Forward P/E, and Forward PEG.Executives at CBS CORPORATION have not purchased or sold any shares thus far this quarter.

CELGENE CORPORATION US + + 0 + + The company's gross margin, days sales, current ratio have been higher than its Industry average for each of the past five years.

FEDEX CORPORATION US 0 + + + + On 03/18/15, the company announced quarterly earnings of 2.01 per share, a positive surprise of 7.3% above the consensus 1.87.The company's current ratio is at its five-year high.

GENWORTH FINANCIAL INC US - - + - - GNW's Forward P/E of 8.0 represents a 10% Discount to its 5-year average of 8.8.

GILEAD SCIENCES INC US + + + 0 + The company's gross margin has been higher than its Industry average for each of the past five years.Compared to the Pharmaceuticals Industry, GILD is currently trading at a significant discount based on Trailing P/E, Forward P/E, and Forward PEG.

HSBC HOLDINGS PLC UK - 0 0 + 0 On days when the market is down, the shares generally decrease by less than the FTSE 350 index.

INTERCONTINENTAL EXCHANGE US + 0 0 + + The ICE's earning continues to remain robust.

MCKESSON CORPORATION US + 0 0 + + The MCK's earning is more bullish than the Drug Retaillers industry.

MICHAEL KORS HOLDINGS US + + + + + KORS's year-over-year revenue growth of 40.7% is the highest within its Apparel Retailers Industry.

MYLAN NV US 0 0 0 0 0 MYL shares are currently trading 12.3% above their 50-day moving average of 59.47, and 24.2% above their 200-day moving average of 53.78.

PARKER-HANNIFIN US - + + + + The company's return on equity has been higher than its Industry average for each of the past five years.

ROYAL CARIBBEAN CRUISES US 0 0 + + + RCL's current Forward P/E of 16.6 represents a 43% Discount to its Hotels & Cruise Lines Industry average.

SOUTHWEST AIRLINES CO US + + + + + LUV's current quarter consensus estimate has increased notably over the past 90 days from 0.48 to 0.65, a gain of 34.5%. This improvement is significantly greater than its Industry average of 2.0% during the same time period.

TIME WARNER INC US + 0 0 + + Over the past 90 days, TWX shares have been less volatile than the overall market, as the stock's daily price has fluctuated less than 87% of S&P 500 COMPOSITE index firms.

VULCAN MATERIALS COMPANY US + + - + + Over the past 90 days, the consensus price target for VMC has increased notably from 69.90 to 84.70, a gain of 21.2%. Interestingly the company's gross margin is at its five-year high.

WHIRLPOOL CORPORATION US - 0 + 0 0 Based on Forward P/E, WHR currently trades at a 20% Discount to its Appliances & Housewares Industry peers. On average, the company has traded at a 19% Discount over the past five years.

EAM Fund

EAM Fund

Fund Risk

Currency Risk

Liquidity RiskMacroeconomic

Risk

Stock Specific Risk

Fund Risk

EAM Fund

Fund Risk Currency Exposure

Opening Portfolio Values

Opening Portfolio Weights

Initial Benchmark

WeightsDifference

£million % %Major FX

InvestmentsUS Dollar £7,827,222.18 78.2722% 61.3800% 16.8922%

Euro £69,464.53 0.6946% 16.3500% -15.6554%£ Sterling £1,166,516.54 11.6652% 8.5400% 3.1252%

China £181,513.61 1.8151% 0.0000% 1.8151%South africa £66,374.38 0.6637% 0.0100% 0.6537%

Brazil £74,840.50 0.7484% 0.0000% 0.7484%Mexico £39,113.47 0.3911% 0.0000% 0.3911%

Other asia £574,954.78 5.7495% 13.7200% -7.9705%Total £10,000,000.00 100.0000% 100.0000%

Currency Exposure

EAM Fund

Management Monitoring

Checklist:Monitoring the portfolio weekly.Minimizing transaction cost.Rebalancing and revising the fund, if the outlooks are changed.Having management meeting before any adjustment decisions

EAM Fund

Any Question?

eam fund presentation final

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