May 2012

Myddleton Croft Investment Managers Balanced Moderate Risk Model
Myddleton Croft Investment Managers KEY FACTS

Portfolio Risk Spectrum
May 2012
MANAGERS COMMENTARY Citius, Altius, Fortius Swifter, Higher, Stronger Once Olympic sentiments could be used to invoke the spirit of the bull market in equities; presently these have better described the flight to safety in safe haven government debt. 10 year Gilt yields have fallen to their lowest ever level of less than 1.5% and the equivalent in the States and Germany are even lower. The Schatz (2 year German bond) has a negative yield. Lets just pause and think about that..investors are paying the Germans for the privilege of lending them money. You might ask why is this? Buying the Schatz (or other short dated German bonds) offers a hedge against the tail risk of a break-up of the euro (at a very modest cost), reinstating the Deutschmark would see a sharp currency appreciation perhaps as much as 30% for holders. Continuing our Olympic theme, the Spanish have taken up the baton from the Greeks as the torchbearer of risk. Their game of extend and pretend, particularly acute in Spanish banks, seems to be moving into a final act. Acknowledgement of their problem is the first stage but fixing it is the second and that relies on the Euro zone (EZ). However a consequence of the EZ loan as Greek investors found out, almost regardless of where investors are in the capital structure, the EZ loan ranks higher. Whilst this loan seems positive it has negative implications for existing bond holders who get subordinated. This is a sobering thought for investors in Italian debt and other less solvent banks debt, who may be next in the queue. This is why we continue to have minimal exposure to banks through equity or debt. The global economic picture is a weakening one. Euro zone PMI is close to a three-year low in May and there are signs of weakness spreading from Southern to Northern Europe, with even Germany slipping back into contraction. The recent independent HSBC China Manufacturing PMI, which is considerably lower than official figures, may be giving a better steer to a more significant slowdown in China than is currently expected. Continuing with PMI data, the UK PMI plunged, hitting its lowest level in three years and experiencing the second-sharpest drop in the index's 20-year history. Finally concluding the weak data set was the US Non-farm payrolls which showed just 69,000 net new jobs created in May, well below the Wall Street consensus of 150,000. Moreover, previous months were also revised downwards, indicating that the jobs picture is not rosy and by inference that forecasters were being too optimistic about US growth. The chart below is a weekly survey of US investors (AAII) who responded bullish if they believed US equities would rise over the next six months. We tend to keep an eye on indicators such as these as a contrarian signal. That over-optimistic view prompted us to reduce our equity exposure in March (in Europe). Late this month based on cheap valuation and weak sentiment we added to UK equity exposure and we remain modestly underweight equity but defensively positioned, although that being said we still have resources to add further should opportunities arise.
Defensive Cautious Moderate Adventurous Highly Adventurous Speculative
1 2 3 4 5 9
Investment Managers Patrick Toes

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP). David Cowell Chief Executive, possessing over 40 years of experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.
For further information call :
0113 274 7700

Email : info@mcim.co.uk
Or visit us at : www.myddletoncroft.co.uk
IMPORTANT INFORMATION This communication is for professional investors only and should not be relied upon by private investors. This document is provided to illustrate Myddleton Croft Investment Managers model portfolios and is for information purposes only and does not constitute an advertisement, financial promotion or financial, professional or investment advice. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient's individual circumstances. It should not be inferred that all portfolios will perform exactly the same as the model portfolios as other factors, such as capital gains tax & the time taken to invest the portfolio, may affect individual portfolio performance. Please remember that past performance is not a guide to future performance and that the value of investments may go down as well as up. Any opinions expressed are subject to change and may not be current views.
Myddleton Croft Investment Managers, 1 Woodside Mews, Clayton Wood Close, Leeds, LS16 6QE T: 0113 274 7700 F: 0113 274 7711 E-mail: info@mcim.co.uk Website: www.myddletoncroft.co.uk Myddleton Croft Ltd is authorised and regulated by the Financial Services Authority. Registered in England & Wales number 05782909. VAT number UK 889 241088. Registered office: 11 Clifford Avenue, Ilkley, LS29 0AS.

Balanced Defensive Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 40:60 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 30% and 50% in equities, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.
1 2 3 4 5 9
Investment Profile
Balanced
PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)

Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society of Investment Professionals (ASIP).
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.
3 Year Rolling Volatility
0113 274 7700

Asset Allocation
Performance Statistics

Balanced Cautious Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
1 2 3 4 5 9
Investment Profile
Balanced


Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of
the Society of Investment Professionals (ASIP).
David Cowell
Chief Executive, possessing over 40 years experience in financial
services, with over 25 years being investment management focussed.
David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.
0113 274 7700

Asset Allocation

Balanced Moderate Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
To generate a portfolio with a balance of income and capital growth over the medium to long term by harnessing the higher return potential of equity markets. The model will seek to reduce the fluctuations in capital values inherent in equity investments through a significant allocation to fixed interest, commodities, absolute return/hedge funds and other non-equity vehicles. Over the medium term, a base case would be 50:50 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 40% and 60% for each asset class, dependent on valuation and risk. Portfolios are also available with an income or growth mandate.
1 2 3 4 5 9
Investment Profile
Balanced


Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society
of Investment Professionals (ASIP).
David Cowell
Chief Executive, possessing over 40 years experience in financial services, with over 25 years being investment management focussed. David formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.
0113 274 7700

Asset Allocation

Balanced Adventurous Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
1 2 3 4 5 9
Investment Profile
Balanced


David Cowell
0113 274 7700

Asset Allocation

Balanced Highly Adventurous Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
1 2 3 4 5 9
Investment Profile
Balanced


Investment Director with over 20 years experience in fund management. Previously a member of Rensburg Sheppards Asset Allocation and Fund Selection Committees for over 9 years and former chairman of those committees at BWD Rensburg, he holds a MSC in Investment Analysis and is an Associate Member of the Society
of Investment Professionals (ASIP).
David Cowell
0113 274 7700

Asset Allocation

Balanced Speculative Risk Model KEY FACTS
May 2012
PORTFOLIO OBJECTIVE
1 2 3 4 5 9
Investment Profile
Balanced


David Cowell
0113 274 7700

Asset Allocation

Enhanced Income Portfolio KEY FACTS PORTFOLIO OBJECTIVE
The objective of the Enhanced Income Portfolio is to target a 6% return of which 4% can be distributed either half yearly, yearly or rolled up. The secondary aim is to provide a degree of protection against the effects of inflation. The portfolio is predominantly invested in bonds, which will comprise 70% of the allocation on average with the balance invested in equities, absolute return and commodities. The Enhanced Income Portfolio was launched at the beginning of 2011. It should be noted that the performance and volatility data before that date (presented below) is from the back-tested portfolio and is provided for illustration purposes only.
Q1 2012
Investment Profile

EIP
Back Tested Performance Since Jan 2008
David Cowell
Chief Executive, possessing over 40 years experience in financial services,
with over 25 years being investment focussed. David management
formulates the macro economic position and leads the investment process across the portfolio range. He also has over 10 years experience of business consultancy to small and medium sized enterprises.
Back Tested 3 Year Rolling Volatility
0113 274 7700

Asset Allocation

May 2012

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Myddleton Croft Investment Managers Balanced Moderate Risk Model

Myddleton Croft Investment Managers KEY FACTS

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

PORTFOLIO KEY ATTRIBUTES

Investment Managers Patrick Toes

3 Year Rolling Volatility

For further information call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

Investment Managers Patrick Toes

Back Tested Performance Since Jan 2008

PORTFOLIO KEY ATTRIBUTES

Back Tested 3 Year Rolling Volatility

For further information call :

0113 274 7700

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