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					Investment Process                                                                                                      The licence to perform

Ignis Corporate Bond Fund

Fund management                                                               Fund overview
Chris Bowie is lead manager of the Ignis Corporate                            Expertise: lead manager Chris Bowie, head of credit, has 17
Bond Fund and head of credit at Ignis.                                        years’ investment experience, working as part of Ignis’ extensive
Management of the fund is carried out as part of                              and experienced fixed income team
the broader Ignis fixed income process with                                   Best ideas: the Ignis team includes sector and macroeconomic
extensive resource and the support of specialists Chris Bowie                 specialists, allowing the fund manager to pick the best of the ideas
from across the business. The Ignis fixed income team is responsible          generated
for approximately £43bn* in assets under management. On the                   Flexible alpha generation: top-down and bottom-up
Ignis Corporate Bond Fund Adam Walker supports Chris at a                     approach with multiple dimensions for ‘through the cycle’ investing
portfolio management level, while David Meade, head of credit                 Proprietary research systems: unique systems operating
research, and his team of nine, provides extensive credit analysis            since 2004, includes credit research and relative value tool
informing the portfolio management process.

Fund aim                                                                    of investment strategies, funds and client mandates. The Ignis
                                                                            team has significant investment experience and is made up of
Ignis Corporate Bond Fund
                                                                            specialist managers and analysts with complementary skill sets.
The fund aims to achieve top quartile performance versus the
IMA Sterling Corporate Bond Peer group. It achieves this via
                                                                            The 30 plus strong team operates under the guidance of Ignis
income and capital growth from investing in fixed-interest
                                                                            CIO for fixed income, Chris Fellingham. Chris joined Ignis in
securities (Corporate Bonds and Gilts). The fund can invest up to
                                                                            January 2010 having previously worked for George Soros’
15% of its investments in fixed-interest securities outside the UK,
                                                                            London Asset Management business where he was CEO/CIO from
with the currency hedged back into Sterling. The investments are
                                                                            late 2007. Prior to this Chris spent 12 years at BlackRock/Merrill
actively managed to produce a stable level of income (which is
                                                                            Lynch Investment Management/Mercury Asset Management
paid out every three months) and capital growth. The focus is
                                                                            where he was head of London fixed income.
mainly on investment-grade (lower risk) corporate bonds, where
a higher yield and return is available than from gilts.
                                                                            Under Chris’ leadership, the successful individual parts of the Ignis
                                                                            fixed income business have been brought together to form an
                                                                            efficient, dynamic team split into areas of specialism. Each
The Ignis fixed income team                                                 portfolio manager is given the freedom to follow their conviction
The Ignis fixed income product offering is extensive, with a total          when investing, or the ‘licence to perform’, while benefiting at all
of £43bn* under management. This is held within a wide range                times from the full support of the broader Ignis fixed income team
*Source: Internal at 30/09/10.

Team structure                                                 Chris Fellingham

Russ Oxley           Brian Jack      David Meade                 Chris Bowie                 Matthew Porter                Business Support
  Rates               Liquidity      Credit Research            Credit Portfolio             Specialist Fixed
                                                                 management                      Income
                                                                                                                              Multi Manager
                       +3               9 analysts                                                                            Simon Mungall +1
                                                                       Adam Walker               Volatility x2
                                                                       +2 portfolio
   Quantitative Models x2                                                                                                     Institutional Clients
                                                                                                                              Helen Farrow
                                                                                                 Management x3

   Sovereign Fixed                                                                                                            Business Management
   Income x4                                                                                                                  Darren Evans
                                                                                                 Lending x1

Ignis Corporate Bond Fund

and operating subject to stringent risk controls and checks. The          Ignis in 2004 as head of credit. He oversees a team of three
structure allows individuals to contribute wholly to the process, with    portfolio managers who have responsibilities split by mandate
accountability and remuneration attributed accordingly.                   type. Previously he worked at AEGON, where he was Head of rates,
                                                                          and Murray Johnstone as a senior fixed income fund manager.
The credit portfolio management team is headed by Chris Bowie,            Adam, who has 13 years’ investment experience, joined Ignis in
while David Meade is head of the credit research team. The Ignis          2000 after three years with Barclays Stockbrokers.
rates team is headed by Russ Oxley, and includes Ignis chief
economist Stuart Thomson. Matthew Porter heads the specialist side        Analyst role
of the fixed income business, including volatility, liability             The role of the analyst is to provide fundamental, proprietary,
management and secondary lending, while head of multi manager             bottom-up analysis of individual credit securities and industries.
Simon Mungall works closely with the team on asset allocation calls.      Detailed relative value analysis is performed and a credit view and
                                                                          investment recommendation produced, which is then discussed
                                                                          with the portfolio management team. Analysts are responsible for
The Ignis credit team                                                     continuing research on holdings and are tasked with pro-actively
The credit team manages approximately £14bn* in funds and                 highlighting any changes to their view and discussing any
specialist mandates, including the Ignis Corporate Bond Fund. The         recommendations for portfolio actions.
team includes dedicated portfolio managers and research analysts
based in London and Glasgow. These teams work closely together            There are currently nine analysts working under David Meade in
to produce ideas for inclusion within the portfolio from which the        the Ignis credit research team. The team members have an
portfolio managers select the best. The team shares a common              average of 10 years’ experience. David has 25 years’ investment
credit investment philosophy, which can be summarised by the              experience having previously worked at Fidelity Investments in
following core beliefs;                                                   London, where he was Director of credit research, at Morgan
                                                                          Stanley International as a senior credit research analyst and at
• Credit markets are not perfectly efficient and pricing inefficiencies   Standard & Poor’s as a rating analyst.
  exist that can be exploited to the clients’ advantage
                                                                           Two disciplines, one team
• The asymmetric risk profile of credit requires a detailed,                       Credit Research                        Portfolio Management
  fundamental, bottom-up analysis of individual companies                     Analysts cover 40 – 50 names in            Trade ideas across currency, sector
                                                                                        2 -3 sectors                              and credit rating

                                                                                                                      Assessment of risks and rewards across
• Credit portfolios should take credit risk and ideally have their                Direct 1 on 1 meetings
                                                                                                                          the whole investable universe
  entire interest rates exposure separately managed                        Maintain financial models, research
                                                                            history and recommendations                Asset allocation and stock selection

• Dividing the team into the discrete disciplines of portfolio             Full analysis of credits and industries   Focus on relative value decision making

  management and research is an effective way to enhance fund                Valuation analysis and tailoring to     Industry reviews and company meetings
  performance                                                                       client requirements

                                                                             Regular meetings to discuss ideas,         Regular meetings to discuss ideas,
                                                                                     events, strategies                         events, strategies

Team structure
                                                                          Idea generation & research
As indicated above, Ignis has dedicated portfolio managers,
working with Chris Bowie, and a team of credit research analysts,         The successful interaction of the credit analysts and portfolio
headed by David Meade. The separation is designed to provide              managers is key to the success of the Ignis Corporate Bond Fund.
optimal use of the specialisations within the credit investment           The team conducts a structured series of meetings throughout the
process. Although each group is a distinct discipline, the teams          month, as well as more informal ad-hoc discussions, in order to
work closely together in determining suitable fund investments.           transmit investment ideas and explore themes that will drive
                                                                          returns in credit markets over the investment horizon.
Portfolio managers
                                                                          Analysts undertake detailed financial research on each of the
The portfolio managers are responsible for overall portfolio
                                                                          bonds under consideration and include modelled forecasts of
construction. This is driven by a top-down macro view for the
                                                                          likely credit evolution. Each analyst covers 40 to 50 names,
asset allocation within the fund and also determines the rates
                                                                          typically in two to three sectors. The Ignis credit team has
positioning for the fund. They also work closely with the analysts
                                                                          developed its own internal systems that allow the analysts and
on making relative value decisions at a stock and sector level.
                                                                          portfolio managers to record and access information efficiently.
                                                                          These systems include proprietary financial databases, models and
The Ignis Corporate Bond Fund is run by Chris Bowie and Adam
Walker. Chris, who has 17 years’ investment experience, joined
                                                                                                                                      The licence to perform

 Communication is key to the success of the credit process at Ignis                      The model splits sectors to a high level of granularity. For example
 with the in-depth work conducted by the analyst team informing                          the banking sector is split by its constituent capital structures such
 portfolio management on an ongoing basis. These views are                               as Tier 1, Upper Tier 2, Lower Tier 2, senior etc. The model is in
 continually tested and challenged through a structured                                  most cases adhered to by the portfolio managers but if they have
 communication process. The formal process begins with a monthly                         a strong view that an under or overweighting should be
 credit strategy meeting when the portfolio management and                               implemented in a particular portfolio, for example the Ignis
 credit research teams meet to discuss themes and the drivers of                         Corporate Bond Fund, this can be implemented, with the approval
 likely near-term sector performance and debate sector allocation.                       of Chris Fellingham. This can be reflected with relative under or
 This meeting then feeds into direct discussion on individual                            overweight positions, although the portfolios will never be
 portfolios and possible changes to current holdings. Daily, weekly,                     diametrically opposed i.e. with long versus short positions. The
 monthly and ad-hoc meetings are carried out to ensure all areas of                      fund manager, Chris Bowie in the case of the Ignis Corporate Bond
 the fixed income team contribute to the decision making process.                        Fund, retains final responsibility for the asset allocation decisions
                                                                                         on the fund.
 Informed decision making
   1. Filter the noise         2. Test the hypothesis        3. Challenge the strategy   Stock selection
       Daily Meetings               Weekly Meetings               Monthly Meetings       Ideas for the inclusion of a credit in a portfolio can come from
                                                                                         either a portfolio manager or an analyst. Analysts are directly
        8:30 Macro call          Sector allocation updates       Broad thematic debate
                                                                                         engaged in seeking out and promoting investment ideas to the
        9:30 Credit call            Sector risk review            Strategy formulation   portfolio managers, being explicitly tasked and incentivised to
Corporate Earnings, News etc        Sector or thematic             Macro risk review
                                                                                         promote good credit ideas.

                                                                 Risk budgeting across
            M&A                    Consistency check
                                                                  multiple dimensions    Stock specific opportunities, coming either from a new issue or
        Spread Moves                 Ratings review               “What if” scenarios
                                                                                         the identification of an attractive idea in the market, begin with a
                                                                                         thorough understanding of the credit. This is undertaken by the
                                                                                         relevant analyst and the opportunity is then discussed with the
 Portfolio construction                                                                  portfolio management team with a recommendation as to
                                                                                         whether the idea should be considered or declined.
 The Ignis Corporate Bond Fund investment process is a pragmatic
 and flexible one, and recognises that different market
                                                                                         For a new name, the analyst will conduct a thorough review to be
 environments will reward different approaches. As such, the
                                                                                         supplemented by a meeting with management. The analyst will then
 interplay between top-down themes and bottom-up stock
                                                                                         prepare a summary paper of the credit’s fundamentals – business
 selection will change as the market changes.
                                                                                         lines, history, ownership, competitive position, financial condition,
                                                                                         capital structure and key risks. The research will also include a review
 Individual years can have very different drivers. For example 2008
                                                                                         of the expected future credit path, a discussion of the potential
 and 2009 were dominated by getting sector and stock selection
                                                                                         future risks, respective probabilities and a detailed relative value and
 correct. However, in previous years such as 2005, where volatility
                                                                                         peer group analysis. The team will then discuss the credit with the
 in credit spreads was lower, the rate position was the biggest
                                                                                         ultimate decision made by the portfolio manager.
 contributor to performance. This demonstrates the need for
 expertise across all parts of fixed income.
                                                                                         Rates process
                                                                                         The Rates team uses a unique process of managing its portfolios as
 Asset allocation
                                                                                         positions against an internally constructed forward rates curve. The
 From the formalised programme of meetings, the Ignis fixed income
                                                                                         internal system Clearcurve constructs a risk free yield curve from the
 team maintain a model portfolio specifying sector
                                                                                         universe of existing government bonds. This allows the curve to be
 overweights/underweights. This is formally set at the monthly
                                                                                         broken down into key forward rates. By using forward rates instead
 meeting based on input from all key members of the team. It can,
                                                                                         of duration to manage risk and exposures, the Rates team is able to
 however, be altered at any point intra month with the process
                                                                                         express multiple independent views on the curve. The process arms
 recognising the need to act in a dynamic, timely manner in response
                                                                                         the team with a more accurate way to measure the risk of a bond
 to market and economic shifts.
                                                                                         position allowing them to minimise the risk to the portfolio and an
                                                                                         opportunity to generate higher risk-adjusted returns.

Ignis Corporate Bond Fund

    Risk monitoring                                                         provides an extremely comprehensive breakdown of risk in
                                                                            the portfolio, at both a stock-specific and sector level. It can
    In addition to the oversight of the product by the fund manager
                                                                            also assess the impact of new trade ideas on the portfolio,
    and the wider fixed income team, there are a number of
                                                                            adding a powerful extra dimension to idea generation and
    independent processes in place to ensure that the portfolio
                                                                            portfolio construction. EM Applications also has a stress
    adheres to mandate guidelines, and the active risk taken reflects
                                                                            testing facility, which allows the manager to see how his
    the fund management view.
                                                                            portfolio would fare under certain scenarios, based on
                                                                            historical data.
    Ignis’ independent risk management team supplies the fund
    manager with management information from a range of
                                                                            Sentinel, a state of the art automated trade monitoring system,
    sources. As well as real time performance information, the
                                                                            provides an automated check and mandate monitoring service.
    manager can also see how that performance is being
                                                                            Ignis’ compliance team also constantly monitors and supervises
    achieved and the levels of risk being taken within the
                                                                            the investment team. The team maintains all investment
    portfolio. The risk team has recently upgraded their
                                                                            procedures and reviews risk control information to ensure
    modelling system to EM Applications. This programme
                                                                            tolerance within mandate restrictions.

      Fund Management Team
      Portfolio management                                                     Credit research
      Chris Bowie – Head of Credit Portfolio Management                        David Meade – Head of Credit Research
      Investment experience: 17 years                                          Credit investment experience: 25 years
      Chris joined Ignis in 2004 as Head of Credit. He oversees a              David joined Ignis in August 2008 as Head of Credit
      team of three portfolio managers who have responsibilities               Research. He oversees a team of nine people. Previously, he
      split by mandate type. Chris is responsible for the largest life         spent five years at Fidelity Investments in London, where he
      company mandates and the retail Corporate Bond Fund.                     was Director of Credit Research, responsible for a team of
      Previously he spent four years at AEGON in Edinburgh where               analysts following Investment Grade and High Yield credits.
      he was Head of Rates. Prior to that he spent six years at                Previous to that position, he spent nine years as a Senior
      Murray Johnstone as a senior fixed income fund manager                   Credit Research Analyst at Morgan Stanley International and
      covering international government bonds and sterling                     four years as a Rating Analyst at Standard & Poor’s. He began
      credit, and before that was a programmer with National                   his career in commercial banking.
      Australia bank for two years.
                                                                               David graduated from Cambridge University with an MA in
      Chris graduated from Strathclyde University with a BA (Hons)             French & German. He is also a Chartered Financial Analyst.
      in Economics. He is also an Associate of the Society of                  He has worked in London, New York and Hong Kong.
      Investment Professionals.

      Adam Walker – Credit Portfolio Manager
      Investment experience: 13 years
      Adam graduated from Strathclyde University in 1997 with
      an MSc in Operational Research after gaining a BSc in
      Aerospace Engineering. He joined Ignis Asset Management
      after three years with Barclays Stockbrokers. Adam also
      covers the retail Corporate Bond Fund together with other
      life company mandates and the Bothwell range of funds.

   Further information:
   Professional advisers please call:                      Email:                                         Web address:
   +44 (0)845 60 50 444                                     
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   internal customer monitoring and to improve the quality of service.

  This information is intended for professional clients and investment professionals only and
  should not be relied upon by retail investors.
  Past performance is not a guide to future performance. The value of investments and the income of them can
  go down as well as up and is not guaranteed. Ignis Asset Management is the trading name of the Ignis Asset
  Management Limited group which includes Ignis Fund Managers and Ignis Investment Services Limited. Issued by
  Ignis Investment Services Limited.* Registered in Scotland No. SC101825. Registered Office: 50 Bothwell Street,
  Glasgow G2 6HR. Telephone: 0141 222 8000. Product provider: Phoenix Life Limited.*
  *Authorised and regulated by the Financial Services Authority.                                                                           D4.10.10