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SELECT CAUTIOUS RETURN FUND INVESTMENT UPDATE as at 31 October 2010 INVESTMENT OBJECTIVE ASSET ALLOCATION (%) The objective of the Fund is to produce a positive return over the long term, regardless of Investment grade corporate bonds 29 market conditions by investing primarily in interest bearing assets and related Cash and certificates of deposit 22 derivatives. Developed market index linked 21 FUND STRATEGY Emerging market local currency debt 13 A low-risk option. Developed market sovereign 8 To provide either an income or a haven of safety for growth seekers. High yield corporate bonds 8 To utilise the most modern techniques available in this arena rather than adopting a more simple “global bonds only” approach. 8 Designed to be an “all weather” fund, capable of delivering an attractive total return 8 29 regardless of prevailing market conditions. This should distinguish it from traditional fixed interest funds where performance is largely dependent on market direction. The 13 Fund aims to provide a haven for low-risk investors by using a combination of bond and currency investments. It aims to produce both growth and income. The level of risk is closely managed and carefully controlled, spread across diversified sources of return, producing a level of risk similar to that of a global bond fund. The Fund is permitted to 21 22 invest in a wide range of investment types, including bonds, money market instruments, bond and interest rate futures & options, interest rate and credit default swaps as well as pooled fixed income funds. This flexibility means that the Fund is able to benefit in both rising and falling market conditions. Suitable for the more sophisticated investor seeking TOP 10 HOLDINGS (%) attractive returns, this Fund can sit comfortably within a broader investment portfolio. US Treasury Inflation 10.2 US Treasury Inflation 04/12 6.7 FUND MANAGER COMMENTS UK gilt inflation 04/20 5.9 The Fund had a good October. Corporate bonds continued their recovery with yields Germany 09/11 Fixed 1.25 3.3 narrowing relative to government bonds, helping returns for the month. Interest rate exposure also added to performance with the inflation-linked bond holding, in particular, Investec Monthly High Income 3.1 benefitting as inflation expectations rose as the Fed argued for the need for inflation to UK gilt inflation 08/13 2.8 rise. Emerging market bond and currency positions also worked well, as did a negative Investec EM S 2.6 view on the US Dollar. Investec EM I 2.6 Looking ahead, the fund remains defensive towards major government bonds which look RSA 8% 12/18 2.2 fully priced for deflation and weaker economic data. The evidence, by contrast, is that Investec High Inc Bond 1.7 inflation remains sticky and activity has stabilised. We have bought protection against a rise in yields through put options and inflation-linked bonds, although we do not PERFORMANCE (%) anticipate a major sell-off while central banks continue to ease. We remain long of Return corporate bond exposure, given improving company profitability and reduced leverage. We also retain exposure to a number of the better valued emerging bond markets. 3 Months 0.7 Currency positions continue to favour under-performance from the Dollar and the Euro Year to Date 0.0 against other developed and developing currencies. The Dollar, in particular, looks set to 1 Year 1.0 weaken further, although it is oversold in the short-term. 3 Years 3.2 5 Years n/a Source: Premier Fund Managers and Bloomberg. Basis: Total return gross of UK tax and including annual management charge, in GBP. Past performance is not a guarantee of future returns. Please note: The fund was priced weekly up to 20 July 2010, after which it turned daily. Month end data points will therefore be the most recent valuation following month end. Source for all performance data is Bloomberg and the allocation data is sourced from Premier Fund Managers Ltd. Performance figures show total return, gross of UK tax and „net‟ of annual management charge. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. SELECT CAUTIOUS RETURN FUND INVESTMENT UPDATE as at 31 October 2010 DISCRETE ANNUAL PERFORMANCE TO QUARTER FUND FACTS E N D % (up to 30 September 2010) Fund size: £62.8m Minimum initial £10,000 15 investment: Minimum additional £10,000 9.7 10 investment: Minimum withdrawal: £5,000 Initial charge: up to 5% 5 Annual management 1.5% 1.7 n/a charge: 0 Status: OEIC -0.8 Launch date: 15 March 2006 -2.7 Type of unit: Distribution -5 2005 to 2006 2006 to 2007 2007 to 2008 2008 to 2009 2009 to 2010 Base Currency: Sterling Dividend declaration dates: 31 Mar, 30 Jun, 30 Sept, Source: Bloomberg. Basis: Total return gross of UK tax and including annual management charge, in 31 Dec GBP. Past performance is not a guarantee of future returns. Please note: The fund was priced weekly up to 20 July 2010, after which it turned daily. Month end data points will therefore be the most ISIN: IE00B0SYHV36 recent valuation following month end. SEDOL: BOSYHV3 Bloomberg ticker: DYNSCRA ID INVESTMENT TEAM Historic yield: 4.3% This fund is managed by John Stopford of Investec Asset Management, which has grown into one of the top 100 third party global asset managers since its inception in 1991. The company is still run by its founding members, who have ensured the commitment to investment excellence and personal service that has underwritten the company‟s success permeates every aspect of the business today. Investec Asset Management is a specialist international investment ADMINISTRATOR management business with major operations in the UK and South Africa, Northern Trust International Fund Administration managing assets on behalf of institutional and mutual fund clients. Investec Services (Ireland) Ltd Asset Management commenced operations in South Africa in 1991, where Georges Court today it is the largest manager of third-party assets and has one of the largest 54-62 Townsend Street unit trust companies. Dublin 2 The value of an investment and the income from it can fall as well as rise and you may not get back Ireland the amount originally invested. Tax assumptions and reliefs depend on an investor‟s particular circumstances and may change if those circumstances or the law change. If you invest through a Telephone: +353 1 524 2000 third-party provider you are advised to consult them directly as charges, performance and terms and Fax: +353 1 524 2920 conditions may differ materially. Past performance is not an indicator of future performance. Full details of the risks can be found in the Simplified Prospectus, the Prospectus and the Supplement for the fund, which can be obtained from Armstrong Investment Managers or www.thedynamicfund. co.uk. Nothing in this document should be construed as investment advice. Issued by Armstrong INVESTMENT MANAGER Investment Managers LLP, which is authorised and regulated by the Financial Services Authority of Armstrong Investment Managers 25 The North Colonnade, Canary Wharf, London E14 5HS FSA no. 503693. Dynamic Assets Managed Fund plc is an open-ended umbrella investment company with variable capital incorporated in 3 Devonshire Street Ireland under the Companies Acts 1963 to 2009 and an umbrella fund with segregated liability Marylebone between sub-funds. Dynamic Assets Managed Fund plc is authorised in Ireland as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings London W1W 5DT for Collective Investment in Transferable Securities) Regulations, 2003 (S.I. No. 211 of 2003) as such +44 (0)20 3440 5060 may be amended, supplemented or consolidated from time to time. The Fund is a sub-fund of Dynamic Assets Managed Fund plc. Source for all performance data is Bloomberg and the allocation data is sourced from Premier Fund Managers Ltd. Performance figures show total return, gross of UK tax and „net‟ of annual management charge. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
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