14 April 2011

Luxembourg Fund Selectors Forum 2011

www.uram.ch

Patrick PittawayPortfolio Manager, URAM

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

Overview

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The outlook for commodities

Strategies for alpha generation Passive strategies (optimised roll returns, index composition, etc…) Active strategies

Equities as an alternative? A case study for gold

The best of both worlds: flexible funds (commodity and equities)

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

Demand fundamentals

Industrialization of the emerging world is a unique oppportunity

Unprecedented demand from the emerging world

Over 700 million people will eventually move to urban areas India needs to pursue an urbanisation program on a scale similar to China (250m people

by 2030). $600bn has been allocated over the next 5 years

New demand from investors

ETF : Financial innovation opens commodities up to a broad range of investors Loose monetary policies in developed world favour investment in Gold and real assets

Green technologies trigger renewed interest for strategic metals

Mining presents a unique opportunity to benefit from the inflection point in alternative energy technologies

The outlook for commodities

3

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

Supply constrained

Physical constraints such declining grades and greater depth means greater costs and require increasingly greater sovereign risk

Given the challenges associated with growth, many companies prefer to acquire rather than grow organically

The outlook for commodities (2)

4

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

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Strategies for adding alpha

Passive: top four commodity indices Active: commodity selection

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

Gold mines have never looked so attractive

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Equities as an alternative

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Jan-80 Jan-82 Jan-84 Jan-86 Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10

Price-to-Forward Earnings: Gold / TSX

Long-term Average

+1 STD

-1 STD

Source: RBC CM Quantitative Research, C.P.M.S.

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

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Equities as an alternative (2)

Margins and cash flow at record level

Gold industry cash marginsCummulative free cash flow (2010-2015)

Source : Merill Lynch Source : NBF

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

Number of mergers/acquisitions in gold sector

8

Equities as an alternative (3)

Price paid and gold price

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

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Emerging index

Intermediate

Junior

Commodity

Senior

Source: Bloomberg, Chart URAM

Stock picking adds significant alpha Life cycle of a mining stock (relative value)

Equities as an alternative (4)

Alpha and beta in the gold sector, continued

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

How to achieve a long-term performance above that of gold?

Understand the arbitrage opportunities between precious metals and the equities of gold mining companies

Benefit from the alpha available from the active management of gold shares

Stock picking is a priority

Where possible, minimise the volatility of gold mines

Without using leverage

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Best of both worlds

www.uram.ch The opinions and views expressed here are those held by URAM as at April 2011, which are subject to change and are not to be taken as or construed as investment advice

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“Top down” analysis to determine opportunities and risks

Best of both worlds (2)

Summary

Fundamental approach

Macro-economic environment

Supply & demand fundamentals

Inventories

Technical approach

Trend & momentum

Sentiment

Speculative positions

Quantitative analysis

Valuation

Growth potential

Margins

Relative performance

Qualitative analysis

Management quality

Political risk

Geology

Operating environment

Stock selection