November 2011

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

KEY FACTS
Portfolio Risk Spectrum
November 2011
MANAGERS COMMENTARY
Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

Investment Managers Patrick Toes
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One feature of the last few weeks has been the daily rumours regarding the euro zone; how Germany will backstop the euro zone or that the ECB will print money like there is no tomorrow, in essence dont worry everything will be alright. This sirens call that everything would be fine reminded me of my Classics lessons at school, and yes, before anyone asks, I can remember that far back. It reminded me of Homers poem, The Odyssey, the ten year epic journey by the protagonist Odysseus from the Trojan War back home to Ithaca. This journey was replete with trials and tribulations obliging Odysseus to avoid many perils. Sound familiar? The Odyssey seems like a good metaphor for investment markets own journey over the last 2-3 years; its storms in the banking sector, Greece and subsequent contagion into other southern states of the euro zone. The current episode mirrors that of one of Odysseus trials with the sirens, whose voices lured sailors to their doom. Odysseus had all his sailors plug their ears with beeswax and tie him to the mast. He ordered his men to leave him tied tightly to the mast, no matter how much he would beg. It was only when they had passed out of earshot, Odysseus was released. Although beeswax is sadly absent from our office, we have avoided listening to these rumours which are invariably refuted shortly afterwards. Clearly there has been a wide gulf between these rumours and reality. We have decided to wait until firm decisions have been made and take a judgement call from that point, at which point the sirens call will be out of earshot. Perhaps our next episode for 2012 will be the test of Scylla and Charybdis - the crucible being the euro zone, trying to chart a course between two bad outcomes. The peril of a euro zone banking sector meltdown and a euro zone austerity-induced depression. As we draw close to the end of the calendar year and reflect on the past, it has felt like an epic struggle, with many market participants feeling worn down by the ebb and flow of the markets. We feel for the most part that we have been able to protect portfolios from the excessive volatility and downside and, when opportunities arose, captured the upside. We had a lacklustre month performance-wise; partly responsible was our negligible exposure to gilts, which make up 20% of our benchmark. That was compounded by the weak performance in corporate bonds where credit spreads have widened. However we retain our stance that with real yields very negative at the short end and similarly so when looking at 10 year gilts relative to 10 year forecast inflation, gilts look deeply unattractive as an investment unless you expect a Japan style depression. The more defensively positioned equity exposure gave back some outperformance (relative to equity indices) generated through the earlier part of the year. We expect this more defensive positioning will bear fruit next year, which we expect will be as equally trying as the current one. It seems increasingly likely that Europe will be in recession in 2012 and that similar recession, or at best very slow growth, is in store for the UK and the States. We have for some time been concerned about bank equities and have minimal exposure. We also have had modest exposure to bank debt. However, in recent months due to the lack of a euro zone bank solution, we have become more concerned that, given the very large requirements for debt by euro zone countries and banks in the first half of 2012, a further sell off may be prompted. We have repositioned our fixed interest exposure in both our mixed portfolios as well as our Enhanced Income Portfolio, to reduce our bank debt exposure further. May I take the opportunity to wish you all a Merry Christmas from Myddleton Croft and our best wishes for a prosperous New Year.
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.
Stephen Wood
Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.
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 and 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
November 2011
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..

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Investment Profile
Balanced
PORTFOLIO KEY ATTRIBUTES

Performance Since Launch (Jan 2008)
David Cowell
3 Year Rolling Volatility
Stephen Wood
0113 274 7700

Asset Allocation
Performance Statistics

Balanced Cautious Risk Model
KEY FACTS
November 2011
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 45:55 allocation to equity and non-equity investments respectively. However this allocation is flexible and could vary between 35% and 55% 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

David Cowell
Stephen Wood
0113 274 7700

Asset Allocation

Balanced Moderate Risk Model
KEY FACTS
November 2011
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

David Cowell
Stephen Wood
0113 274 7700

Asset Allocation

Balanced Adventurous Risk Model
KEY FACTS
November 2011
PORTFOLIO OBJECTIVE

1 2 3 4 5 9
Investment Profile
Balanced

David Cowell
Stephen Wood
0113 274 7700

Asset Allocation

Balanced Highly Adventurous Risk Model
KEY FACTS
November 2011
PORTFOLIO OBJECTIVE

1 2 3 4 5 9
Investment Profile
Balanced

David Cowell
Stephen Wood
0113 274 7700

Asset Allocation

Balanced Speculative Risk Model
KEY FACTS
November 2011
PORTFOLIO OBJECTIVE

1 2 3 4 5 9
Investment Profile
Balanced

David Cowell
Stephen Wood
0113 274 7700

Asset Allocation

Enhanced Income Portfolio
KEY FACTS
Q3 2011
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.
Investment Profile
EIP

Back Tested Performance Since Jan 2008
David Cowell
Stephen Wood
Assistant Investment Manager graduated from the University of Manchester in economics. His industry experience ranges from petro-chemical finance to pharmaceutical development within large multinationals. He holds several financial qualifications including CIMA and the IMC and is currently working towards further professional qualifications. He joined Myddleton Croft in 2010.
Back Tested 3 Year Rolling Volatility
0113 274 7700

Asset Allocation

November 2011

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Myddleton Croft Investment Managers Balanced Moderate Risk Model

Myddleton Croft Investment Managers

Defensive Cautious Moderate Adventurous Highly Adventurous Speculative

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

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

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

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

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

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

3 Year Rolling Volatility

For Further Information Call :

0113 274 7700

Myddleton Croft Investment Managers Balanced Moderate Risk Model

PORTFOLIO KEY ATTRIBUTES

Back Tested 3 Year Rolling Volatility

For Further Information Call :

0113 274 7700

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