jupiter asset management

Jupiter Absolute Return Fund

Citywire

Newcits

Retreat 2010, The Four Seasons,

HampshireThursday 2nd

& Friday 3rd

December 2010

Presented by: Philip Gibbs, Fund Manager

1


Launched December 2009

Assets managed in excess of £600m

Seeks absolute returns through either investing in or taking advantage of overvaluations in equities, bonds, currencies and commodities. The latter however is a small part of the fund

The fund is an extension of the strategy employed by the manager in an offshore fund from March 2000 to June 2010

Not a market neutral fund but preference for avoiding too much directional risk

Employing strong risk framework

Source: Jupiter as at 31.10.10.

2

Risk controls

VaR limit of 20%

Gross limit of 150%

Net equity exposure limit of 60%

Individual equity position limit of 10%

5% positions limited to 40% of equity

Strong focus on liquidity

Note: These are guidelines only. The fund can use the full UCITS

III exposure limits.

Presenter

Presentation Notes

3

Included to demonstrate approach and active management of exposure

Long/short offshore portfolio net & gross exposure since inception

Source: Jupiter as at 31.05.10. The above represents an offshore

fund outside of the UCITS framework and therefore is displayed only for the purposes of demonstrating the Fund Managers experience and style.

-160%-140%-120%-100%-80%-60%-40%-20%

0%20%40%60%80%

100%120%140%160%180%200%220%

Mar 00 Mar 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10

Long Short Net Gross

4

-100%

-50%

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

Mar 00 Mar 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10

% G

row

thLong/short offshore portfolio

Included to demonstrate impact of approach and active management

of exposure

Performance since launch

Source: Jupiter, Bloomberg, CS/Tremont and HFR to 31.05.10. Fund

launched 09.03.00. Long/short offshore portfolio performance and index returns are net of management and performance fees. The above represents an offshore fund outside of the UCITS framework and therefore is displayed only for the purposes of demonstrating the Fund Managers experience and style. From 01.06.10. Guy de Blonay became lead manager of the fund.

Annual Return%1 Volatility %

Long/short offshore portfolio 16.5 19.8

CS/Tremont Long/Short Equity 4.2 8.2

HFR Equity Hedge 4.2 8.8

FTSE All-Share -1.1 15.1

DJ Stoxx 600 -4.3 16.9

5

Long/short offshore portfolio monthly net returns


of exposure

Source: Jupiter as at 31.05.10. The above long/short represents an offshore fund outside of the UCITS framework and therefore is

displayed only for the purposes of demonstrating the Fund Managers experience and style. From

01.06.10.

Guy

de

Blonay

became lead

manager

of the

fund.

US$ class

2010 0.2% 1.2% -1.0% -0.2% 0.3% 0.5%

2009 2.0% 1.5% -6.1% -10.1% 0.2% -1.7% 2.6% 8.0% 7.4% -1.7% 1.0% 0.2% 1.9%

2008 8.6% 1.2% -3.1% -6.2% 3.0% 15.9% -15.3% -0.3% 2.2% 5.3% -0.4% 2.1% 10.3%

2007 2.5% -2.8% 2.0% 5.1% -1.4% 1.5% 3.6% -1.8% -0.4% 3.2% 1.7% 0.6% 14.8%

2006 11.6% 4.1% 5.0% 1.1% -5.4% -1.6% 0.9% 1.8% -1.6% 3.6% 0.00% 1.5% 23.4%

2005 1.3% 4.4% -1.8% -6.7% -1.7% 3.0% 1.9% -1.0% 2.9% -3.5% 6.8% 7.0% 12.4%

2004 0.4% 0.7% -1.9% 0.1% -2.1% 0.5% 0.7% 0.8% 1.3% 0.4% 2.7% -0.7% 2.7%

2003 0.1% 0.5% 0.9% 1.2% 1.7% 0.0% 0.6% 0.3% -1.3% 2.8% 0.8% 1.5% 9.5%

2002 3.7% 0.7% 0.5% 3.6% 5.0% 3.7% 1.4% 0.7% 1.2% -2.2% -0.6% -1.0% 17.8%

2001 3.0% 3.6% -2.7% 2.6% 4.3% -1.2% 0.1% 2.1% -5.1% -0.9% 1.3% -1.1% 7.9%

2000 41.1% -7.5% 0.7% 23.2% 6.8% -2.2% 7.0% -3.0% -4.4% 13.1% 86.9%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD

6

Long/short offshore portfolio monthly net returns


of exposure

Source: Jupiter as at 31.05.10. The above long/short represents an offshore fund outside of the UCITS framework and therefore is

displayed only for the purposes of demonstrating the Fund Managers experience and style.

From

01.06.10.

Guy

de

Blonay

became lead

manager

of the

fund.

£

class


2010 0.3% 1.1% -0.8% -0.2% 0.3% 0.7%

2009 2.0% 1.5% -6.2% -9.6% -0.2% -1.6% 2.5% 8.6% 7.3% -1.6% 1.2% -0.0% 2.4%

2008 8.6% 1.3% -2.9% -6.0% 3.1% 15.6% -15.2% -0.1% 2.7% 6.2% 0.2% 2.1% 12.9%

2007 2.3% -3.0% 2.1% 5.0% -1.4% 1.9% 3.6% -1.9% -0.8% 3.1% 1.8% 0.8% 14.7%

2006 4.3% 4.8% 1.0% -5.4% -1.8% 0.8% 1.7% -1.6% 4.3% -0.1% 1.3% 9.2%

2010 0.3% 1.1% -0.8% -0.2% 0.2% 0.6%

2009 2.3% 1.7% -5.9% -10.2% 0.3% -1.6% 3.0% 7.6% 7.1% -1.6% 1.1% 0.0% 2.5%

2008 8.3% 1.2% -3.0% -6.0% 3.0% 15.9% -15.3% -0.2% 2.6% 6.2% -0.3% 1.8% 11.6%

2007 2.3% -3.0% 2.0% 4.9% -1.5% 1.7% 3.5% -1.9% -0.5% 3.1% 1.6% 0.6% 13.2%

2006 4.0% 4.6% 0.9% -5.6% -1.9% 0.8% 1.7% -1.6% 4.1% -0.2% 1.3% 8.0%

€

class


7

Long-term investment policy

Active fund management

Dual approach

Control risk and maximise upside

Challenge consensus estimates

High quality portfolio

Do not follow the herd

Focus on macro themes as well as stock and bond selection

Concentrate on out-of-favour investments on the long side and on liquid investments

Perform own company research and analysis

Scrutinize balance sheets as well as earnings

8

Long-term investment policy continued

Put conviction behind Best Ideas

Transparency

Strong sell discipline

Fund manager autonomy

Alignment of interests

Not afraid of significant holdings

Focus on investments that can be clearly analysed

Reduce position size as shares approach their fair value

No house lists

Fund manager has significant investments in the fund and the fund strategy

9

Reasons for optimism

Strong growth in emerging markets and relatively low debt levels at the national and consumer levels

Subdued interest rates in some regions due to problems in Western economies, especially in Hong Kong with dollar peg

Determination of western governments to support economies, unlike 2007 and 2008

Very low cash interest rates in the developed world

Generally low bond yields

Historically low equity valuations compared with bond yields

Presenter

Presentation Notes

10

Reasons for caution

Interest rates can only rise in the West

Inflation may return as a problem especially given demand for resources from the Far East

Government bond yields in the US and Japan look far too low

Economies in the US, Japan, the UK and Southern Europe are struggling in spite of very low interest rates and very high government debts and deficits. What happens if deficits are addressed or interest rates are forced up? Not a happy thought.

Presenter

Presentation Notes

11

Medium term investment conditions

Emerging market assets and currencies are by far favoured over the developed world

On a view of a few years it seems highly probable that a crisis will ensue as a result of developed world indebtedness. Governments may have to print so much money that they will unleash inflation. US and Japanese government bonds will probably perform terribly.

Western equities relying on Western consumers will face many problems as a result of this situation

The Swiss Franc and gold will probably perform exceptionally well. The dollar and the yen and sterling and the Euro look to have a dismal outlook.

Emerging market currencies in the Far East or currencies backed by resource based economies (such as Norway) are also preferred

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

Presenter

Presentation Notes

12

Shorter term investment conclusions

The equity market will perform well if there is reasonable stability in Western economies because equity pricing reflects extreme nervousness. On the other hand it is also possible that a double dip materialises and shakes confidence.

Western government bonds are likely to perform poorly except in the short term in a double dip scenario

Corporate bonds look fairly priced but with attractions in the very high yield portion

The yen and the dollar will be poor except in a double dip scenario. The Swiss Franc looks a strong bet for either a more bullish or bearish scenario. Sterling looks unpromising in both scenarios.

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

Presenter

Presentation Notes

13

Historic valuation levels

UK Gilt/12-Month Forward Equity Earnings Yield

Source: MF Global Securities Limited Quantitative Equity Strategy.

0

5

10

15

20

25

65 70 75 80 85 90 95 00 05 10

UK 12m Fwd Equity Earnings Yield (100/10.0x P/E = 10.0%)UK 10-Year Gilt Yield = 3.0%

'87 Crash

'91 Gulf

War Rally

'94 Bond Sell-Off LTCM

Crisis

TMT Bubble

Sept 11th'75 Equity

Rally

'73-'74 Bear Market

Credit Crunch

‘67-‘69 Equity Rally

Late 70’sEPS Boom

Early 80's Bond Rally Debt-Funded

Takeover Margin

14

Gross debt as percentage of GDP

Source: IMF, World Economic Outlook, OECD Economic Outlook, Wikipedia.*China, Hong Kong, SAR, India, Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand.**The Czech Republic, Hungary and Poland.***Argentina, Brazil, Chile and Mexico.

0% 25% 50% 75% 100% 125% 150% 175% 200% 225%

Latin America

Central Europe

Asia

United States

United Kingdom

Spain

Portugal

Netherlands

Japan

Italy

Ireland

Greece

Germany

France

Austria

2007% 2011 Forecast 2007 % 2011 Forecast %

Austria 62 82

France 70 99

Germany 65 85

Greece 104 130

Ireland 28 93

Italy 112 130

Japan 167 204

Netherlands 52 82

Portugal 71 97

Spain 42 74

United Kingdom 47 94

United States 62 100

Asia * 37 41

Central Europe ** 23 29

Latin America *** 41 35

15

Net debt as % of GDP

-10

0

10

20

30

40

50

60

70

80

90

100

110

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Net d

ebt a

s %

of G

DP

United Kingdom United States Japan

Source: OECD Economic Outlook.Note: Net debt measures are not always comparable across countries due to different definitions or treatment of debt (and asset)

components. First, the treatment of government liabilities in respect of their employee pension plans may be different (see note to Annex Table 32). Second, the range of items included as general government assets differs across countries. For example, equity holdings are excluded from government assets

in some countries whereas foreign exchange, gold and SDR holdings are considered as assets in the United States and the United Kingdom.

16

Portfolio –

Top long positions


Source: Jupiter as at 31.10.10. *Some of this exposure is through derivatives. Remaining exposure is through cash of various currencies. In addition to cash held in GBP, the fund holds notable long positions in JPY, NOK and USD.

Fund size: £635m

Top long positions* %

Barclays Bank 14% VRN PERP 7.07

Altria Group 9.95% 10/11/38 4.56

Sun Hung Kai Properties 2.73

Australia Government 5.75% 15/05/21 1.21

ETF Securities –

Physical Gold ETF 1.18

Prudential 1.00

Rio Tinto 0.95

DnB

NOR 0.93

BHP Billiton 0.80

Standard Chartered 0.74

Total 21.16

17

Portfolio –

Breakdown

Sector breakdown

Source: Jupiter as at 31.10.10.

Geographical breakdown

Short % Long %

Real Estate Investments & Srvcs 3.33

Banks 2.71

Mining 2.37

Commodities 1.18

Life Insurance 1.00

Financial Services 0.04

General Retailers -0.68

Support Services -1.22

Construction & Materials -3.37

Sub Total -5.27 10.63

Fixed Income -41.65 12.84

Total -46.92 23.47

Short % Long %

United Kingdom -1.22 12.39

United States -12.88 4.56

Hong Kong & China 3.92

Australia 1.21

Norway 0.93

Turkey 0.45

Spain -0.68

Ireland -3.37

Germany -4.22

Japan -24.54

Total -46.92 23.47

Appendix

19

Appendix I: Fund specifications

Investment objective: To generate an absolute return independent of market conditions by investing on a global basis

Derivatives: sector swaps, contracts for difference (CFDs), futures

Cash benchmark 3 month LIBOR

IMA Absolute Return sector

Base currency: Sterling

Dual priced

Accumulation units only

Qualifies for ISAs and SIPPs

Launch date 14 December 2009

Launch price 50p (inclusive of FEL)

Annual accounting date 31 October

Annual dividend By 31 December (if any income)

Deals Minimum investment: £500 for lump

sum investments & £50 a month

for regular savers

Initial charge 5.25%

AMC 1.25%

Performance fee: 15% outperformance above a hurdle

(3 month LIBOR) and High Water Mark

(which must be achieved before any

performance fee may be applied)

Jupiter Absolute Return Fund (JARF)

20

Appendix II: Fund comparison

Philip Gibbs’

unit trust funds

Jupiter Absolute Return Fund Jupiter International Financials Fund Jupiter Financial Opportunities Fund

Objective The Fund seeks to generate an absolute return independent of market conditions by investing on a global basis

To achieve long term capital growth principally through investment in equities and equity related securities of financial sector companies on an international basis, but with the power to invest in other asset types when the Manager considers it appropriate for market conditions

To achieve long term capital growth principally through investment in equities of financial sector companies on an international basis

Benchmark Cash benchmark 3 month LIBOR FTSE Global Financials Index £ FTSE Financials Index

Strategy Absolute return Full UCITS III powers to use derivatives for investment purposes (long/short) and to preserve and grow capital in down markets

Long only

Market cap bias Large and mid cap Large and mid cap, some small Large cap (>£3bn)

Scheme category UCITS III (sophisticated) UCITS III (sophisticated) UCITS III (non sophisticated)

Risk management approach

Value at Risk Value at Risk Commitment

21

Appendix III: Risk management –

Value at Risk (VaR)

What is VaR?

Estimates the worst potential loss in the portfolio within a certain time period and with a certain amount of confidence

Internal Guidelines : 20% absolute VaR limit (or 2x benchmark for Jupiter International Financials)

(99% confidence) over 20 day timeframe measured each day

Holding period: 1 month (20 days)

Observation period: minimum 1 year (250 days)

99% confidence implies a breach 1 out of every 100 twenty day periods

Jupiter uses 3 different VaR methodologies

Parametric –

using standard deviation of portfolio returns

Monte Carlo –

using random simulations of market scenarios

Historical Simulation –

uses actual historical rates and revalues every position for each change in market rates

Currently, daily VaR data is produced using a 1 year look back using the Historical Simulation method, though in parallel, parametric and Monte Carlo testing is also conducted

22

Appendix III: Risk management –

Value at Risk (VaR) (cont’d)

Different calculation methods

Absolute or relative VaR will be applied to the Jupiter International Financials Fund according

to benchmark volatility

The Jupiter Absolute Return Fund will be restricted to an absolute VaR method

If VaR approaches limit, Philip may:

Diversify the portfolio

Reduce the gross exposure

Hedge part of the portfolio

Reduce exposure to positions with high marginal VaR contribution

23

Apendix

IV: Jupiter Financial Opportunities Fund

Ranked 2nd out of all unit trusts since launch

Source: Financial Express, bid to bid, net income reinvested 02.06.97 to 31.10.10.

Performance 02.06.97 to 31.10.10

Rank / 695 Unit Trust % Growth

1 Marlborough -

Special Situations TR in GB 883.07

2 Jupiter -

Financial Opportunities TR in GB 786.21

3 Baring -

Eastern Europe TR in GB 733.53

4 BlackRock

-

Gold & General TR in GB 702.06

5 BGF -

World Mining TR in GB 659.34

6 Aberdeen -

Emerging Markets TR in GB 574.61

FTSE All Share TR in GB 103.97

24

-200

0

200

400

600

800

1000

Jun 97 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10

% G

row

th

Jupiter - Financial Opportunities TR 786.21FTSE ASX Financials TR 51.90

Appendix V: Jupiter Financial Opportunities Fund

Performance since launch


Bull Market

Fin Opps 127.75%

FTSE Financials 22.30%

Outperformance 105.45%

Bear Market

Fin Opps 18.09%

FTSE Financials -6.58%


Post Iraq

Fin Opps 192.60%

FTSE Financials 116.68%


Credit Crunch

Fin Opps 12.61%

FTSE Financials

-38.65%


25

Appendix VI: Jupiter Financial Opportunities Fund

Calendar year performance


2009 2008 2007 2006 2005 2004 2003

Jupiter Financial Opportunities 11.89 7.25 1.78 15.70 33.94 19.54 39.46

FTSE Financials 29.99 -47.90 -13.76 20.58 17.18 14.64 23.31

2002 2001 2000 1999 1998 02.06.97 to 31.12.97

Jupiter Financial Opportunities -7.74 0.95 42.42 34.65 41.64 12.02

FTSE Financials -22.80 -7.46 14.44 18.27 8.18 15.92

26

Jupiter Unit Trust Managers Limited (‘JUTM’) and Jupiter Asset Management Limited (‘JAM’) are both registered in England and Wales (nos. 2009040 and 2036243). The registered office of both is 1 Grosvenor Place, London SW1X 7JJ. JUTM and JAM are authorised and regulated by the Financial Services Authority 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 anyone attending the presentation or who has the opportunity to view the accompanying slides should bear in mind that the value of an investment in a unit trust 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 FTSE World Index

and the FTSE Financials Index. 'FTSE®' is a trade mark jointly owned by the London Stock Exchange Plc

and The Financial Times Limited and is used by FTSE International Limited (‘FTSE’) under licence. The FTSE World and the Financials Indices are calculated by FTSE. FTSE does not sponsor, endorse or promote the product referred to in this document and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright and database rights in the index values and constituent list vest in FTSE.

The Jupiter Absolute Return Fund and the Jupiter International Financials 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 funds may incur losses greater than their initial investment into derivative contracts (although unit holders will not incur any liabilities beyond their initial

investment). The funds are able to gain market exposure in excess of their 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 funds net asset been in place. The funds' values are unlikely to mirror increases and decreases in line with the respective markets they are invested in to. Further information is contained within

the Key Features (incorporating

Simplified Prospectus).

For your security we may record or randomly monitor all telephone calls. If you are unsure of the suitability of an investment please contact your financial advisor. 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.

Disclosure

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jupiter asset management

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