Macquarie BRIC Advantage Hedged

Transcription

1 Analyst(s): Toby Lewis; Simone Arblaster Macquarie BRIC Advantage Hedged Standard & Poor's View S&P rates this fund three stars, reflecting our conviction that the manager will consistently generate risk-adjusted returns in-line with both its relevant investment objectives and its peers. The fund is managed by a small but experienced team that all have a background in fixed income trading, portfolio management, and macroeconomic research. It aims to exploit the importance of country factors in emerging markets to manage highly liquid exposures to global emerging market equities, equity indices, and currencies. Exposure to individual equities or sectors will occasionally be sought, but this is unlikely to represent a significant portion of the portfolio. The manager expects to invest most of the fund in exchange-traded funds (ETFs) based on the MSCI Barra indices of individual countries. This will reduce the tracking error of the fund relative to using futures. The fund can also hold up to 100% in cash when the manager takes a negative view of the outlook for some or all markets. The fund will hold a minimum of 50% of equity exposure in Brazil, Russia, India, and China (BRIC), but the fund is more appropriately viewed as a global emerging market product. Versions are available both hedged to the Australian dollar and unhedged. We acknowledge that country factors are particularly important in emerging markets and that this presents a significant opportunity to add value. However, investors should be mindful that the fund does not directly hold a portfolio of emerging market equities as might be expected. The manager may also use over-the-counter derivative contracts which add counterparty risks not normally found in an equity portfolio. The manager's top-down approach was particularly successful during the global financial crisis and performance since inception has been very strong. We note that the fund is one of the more expensive funds in the peer group, however, and returns gross of fees differed substantially from net returns. Investor Suitability The fund provides long-only exposure to emerging equity markets. This product is suitable as a specialist international-equities holding. The fund not only invests in equities, but also in equity-linked instruments and ETFs to gain exposure to macroeconomic themes. The fund must hold more than 50% of its non-cash exposure in BRIC. The fund can hold up to 100% in cash. Emerging markets may not be suitable for all investors and should be considered a long-term proposition given the inherent high volatility of the sector. Investors should have an investment horizon of at least five years. Key Strengths Performance gross of fees has been consistently strong since inception in both rising and falling markets. The team is relatively highly experienced in investing in emerging markets. Key Weaknesses The investment team is small compared with peers, and relies on the skills and experience of a concentrated group of three individuals. The fund has relatively high fees compared with peers. Risks S&P considers that there is key person risk associated with David Dali and Jack Janasiewicz. The fund often uses derivatives and there may be significant counterparty risk associated with these positions. Investors in any emerging-market products, including emergingmarket equities, should be aware that some risks are elevated in this asset class specifically political and country risk. APIR code MAQ0473AU Fund status Open Inception date Nov. 1, 2006 Responsible entity Macquarie Investment Management Limited Peer group International Equities - Emerging Markets Benchmark MSCI EM NR AUD Investment style Thematic Multi manager No Fund Size ($A) mil (at June 30, 2010) Minimum investment (A$) ICR / MER (%) 0.15 Performance Fees (%) 20 Investment Manager Macquarie Capital Investment Management Redemption policy Daily Distribution frequency Annually High water mark yes Hurdle rate N/A Return objective (%) 3-5 Tracking error objective (%) 3-5 Average portfolio turnover (3yrs) (%) 217 Maximum cash holding (%) 100 Typical number of stocks Release authorised by Leanne Milton The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 1

2 Investment Objectives and Fees Products fees are high in absolute as well as peer terms. The fund charges a 1.5% MER (1.65% for the hedged version). There is also a 0.25% buy/ sell spread. A 20% incentive fee applies to performance above the MSCI Emerging Markets Index, subject to a high water mark. In return, the manager aims to deliver between 3% and 5% outperformance of the MSCI Barra EM index, with a tracking error of 3% 5%. Investment Philosophy and Style The fund invests in around 15 emerging-markets countries with at least 50% of the non-cash holdings being invested in BRIC securities. The manager conducts top-down thematic country analysis, which drives security selection. The fund is long-only and may use shares, ETFs, derivatives, or currency to express the manager's macroeconomic views. The fund may also go up to 100% in cash to express a negative view of the market as a whole. Passive Active Value Growth Small Cap Large Cap Investment Team Structure Since March 31, 2009, the fund has been managed by Macquarie Capital Investment Management in New York. The investment manager of the fund was previously Globalis LLC, a joint venture between Macquarie and OneWorld Investments L.P. Globalis was de-registered after being acquired by Macquarie Holdings (USA) Inc. in October Mr. Dali, Mr. Janasiewicz, and Holger Siebrecht (the three-person investment committee members) became Macquarie employees after the acquisition. Mr. Dali and Mr. Janasiewicz are co-portfolio managers. For Macquarie, this acquisition fits its new strategy following its own internal reorganisation; for Globalis, it serves the purpose of institutionalising the product offerings and removing onerous administration tasks. As a result of the ownership change, Ignacio Sosa, one of the cofounders of OneWorld left the group in October We viewed his experience as a significant loss to the team. However, he wished to monetise his investment and his departure was on amicable terms. The team is small, and although the resources are adequate for the mandate of this fund, the move into the Macquarie fold brings its own challenges. The team is sufficiently resourced for this fund, but with the potential for new product launches or involvement in other strategies, the time-management of the investment team will become increasingly important. While it is prudent to wait for assets under management to grow before increasing the cost base by adding further resources, this must not come at the expense of the existing product. The handover of non-investment functions to Macquarie is to be welcomed, as it brings the fund into line with peer boutique funds that generally make use of such outsourcing arrangements. The middle office staff from Globalis also joined Macquarie. Brian Hassett performs a trading-execution role and brings continuity and experience in trading a range of emerging-markets assets. The team's research efforts are supported by two internal emerging market-focused investment teams; the Macquarie Asian fundamental equities team and the EM Infrastructure investment team. Key Investment Personnel Name, Position Years* Experience David Dali, portfolio manager Jack Janasiewicz, portfolio manager 8 13 Holger Siebrecht, quantitative analyst 2 2 Average tenure with current firm 7 N/A Average industry experience N/A 12.3 *Years with current firm. Years of relevant industry experience. Portfolio Managers Mr. Dali began his emerging market career in 1989 and has been employed in emerging markets with Chase Manhattan Bank, Bank of America, and BancBoston, where he co-founded the emerging-markets sales, trading, and research group in Although he has been involved in equity markets, Mr. Dali's strengths were previously in emergingmarket fixed-interest securities. Mr. Janasiewicz began his career in 1994 as a fund accountant. In 1997 he became an assistant portfolio manager, handling emerging market cash while at Deutsche Bank Asset Management, before being promoted to co-manager of the emerging market fixed income portfolio in In 2002, Mr Janasiewicz joined Globalis. At Globalis, he was responsible for the BRIC Opportunities Fund which invests in BRIC equities and provided strategic input into the BRIC Advantage Fund. Mr. Janasiewicz is a CFA charterholder. Research Team The portfolio managers conduct research themselves. They are assisted by a third member of the investment committee, Mr. Siebrecht, who began his career in 2001 at an economic consulting firm as a research analyst. He returned to university in 2005 to study for a masters degree in international economics at Harvard. He joined Globalis in 2007 as a quantitative analyst and is a candidate in the CFA program. Alignment and Accountability The managers have sold their equity stake in the business and are now employees of the Macquarie Group. Remuneration is directly linked to the performance of the fund through a variable profit-sharing arrangement that is in addition to a fixed salary. Profits are based on total revenues including performance fees, minus total expenses. Staff may also be awarded Macquarie Group stock in the future. Inexperienced Small Unstable Investment Process Experienced Large Stable Overview The manager takes a top-down investment approach to analysing emerging-market countries. The process is designed to identify attractive emerging market country investment opportunities. Investment views are typically expressed through country-specific equity indices, and implemented by buying the relevant ETFs that are based on that index. Where an index is not available, the manager will seek to replicate an index through a basket of securities or derivative contracts. Research Process The primary contributors to investment decisions are the two portfolio managers and the chief quantitative analyst who make up the group s investment committee. The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 2

3 The investment committee meets formally once a week and informally twice a week to discuss and identify global and regional investment themes. Many sources are used to form this opinion, including a review of research provided by international investment banks, independent research firms, and consultants. This analysis of key themes forms a backdrop for the rest of the investment process and aids in the construction of the portfolio. The backbone of the investment process is a three-stage macro assessment of all emerging and developed economies. The first stage examines the current global appetite for risk. Seven factors, such as global liquidity, geopolitics, and global growth are assessed and scored between 0 and 5 on both short- and long-term outlooks. These are aggregated on a weighted-average basis to produce an overall score that is used in the weekly investment committees to set the exposure of the fund. The second stage quantitatively ranks all of the countries based on six categories and 22 sub-factors. This incorporates valuations, credit ratings outlooks, earnings, and growth, among others to form a neutral, under, or overweight score. The investment committee may adjust this outcome based on qualitative assumptions that the model does not capture. S&P feels this is prudent, as it allows the team to incorporate information gathered from a broader range of sources. The third and final stage is a credit risk assessment used to exclude economies deemed to be vulnerable to a credit event. In essence, this is the ability of a country to meet its debt repayments and remain liquid and solvent. A probability of default score is calculated for each country. Again a neutral, over, or underweight outcome is determined. The result of this macro assessment is a shortlist of around 15 economies deemed suitable for inclusion in the portfolio. From this universe, the manager conducts its own research, which normally includes visits to each country and meetings with policy makers, opposition politicians, economists, academics, and local market analysts. This allows for an informed economic and political view on each country. S&P considers that this aspect is a key differentiating feature of the process. From this analysis, global investment themes are formed that provide the basis for the level of exposure to be taken in the emerging economies. G7 countries are also analysed to provide a basis for global growth, liquidity, and risk appetite. In determining the final portfolio, the manager uses the results of the macro assessment together with the previously formed thematic views. The managers then determine the most appropriate method to gain access to the desired markets. As the fund is benchmarked against the MSCI Barra EM index, and not the local headline indices, exchange-traded futures are generally not appropriate as they generate unnecessary tracking error. For example, in Brazil, the fund is benchmarked against the MSCI Brazil, whereas the most liquid futures contracts are based on the local Bovespa index. The manager often uses exchange-traded funds that replicate the MSCI indices such as ishares. The costs associated with these investments are higher than for futures, but comparable with equity investing. If ETFs are not available the manager may consider other solutions, such as buying a basket of leading shares in a given country. At the time of our review, the manger had also used a total return swap to gain exposure to the Indian equity market. Investors should be mindful that the use of over-the-counter derivatives contracts adds counterparty risk to the portfolio and we consider it unusual within the peer group. Portfolio Construction In the first stage, under-, over-, or market-neutral weightings from the country-ranking model are subjectively adjusted using the global and regional thematic views. A further adjustment using the exposure levels formed in the macro assessment is applied to rank these exposures into a final country weighting outcome. Once this is in place, the mode of implementation is decided. If one sector is viewed as being strong then the representative stocks of that sector are purchased. All trades have to meet the complex diversification and concentration limits of the fund, which are detailed in the Risk Management section. Risk Management Active positions are monitored daily by the investment team with respect to performance contribution to ensure that individual active positions do no contribute more than 5% tracking error at the individual security level and 5% at the country level to the overall fund s tracking error. Forwardlooking tracking error at the country level is monitored weekly to verify that individual country tracking error remains reasonable. Lastly, portfolio beta, correlation, volatility, and liquidity are also reviewed weekly to ensure that all measures are reasonable and correspond to macro and country process results. Countries may not deviate more than 10% from any benchmark weight, if a country is deemed vulnerable that country may be excluded from the portfolio. Performance tracking error risk is monitored using the APT risk system (implemented June 2009) which uses a weekly snapshot of current portfolio holdings and calculates a 180-week historical return assuming the current portfolio weightings. Forward-looking tracking error is then calculated at the portfolio, country, and sector levels, targeting a preferred range of 3%-5% under normal market conditions and portfolio net exposure. Constraints limiting the portfolio's deviation from benchmark weights are also applied. The APT system is used for scenario testing and loss forecasting and factor analysis. Macquarie Funds Group also provides independent risk management oversight to augment the process. The risk management team reviews portfolio exposure by region, country, and security to ensure compliance with the limits set out within the PDS. On a weekly basis, MFG calculates and delivers independent forward-looking risk analysis for beta, tracking error, volatility, and VaR. Beta, volatility, and correlation risks are measured at both the portfolio level and the country level. Using the APT system and methodology, the portfolio's beta, correlation, and volatility are calculated weekly and monitored such that typical ranges are adhered to under normal market conditions. Portfolio beta versus the benchmark index can range between 0.85 and 1.1 with preferred levels in normal conditions being between In cases of extreme market stress, portfolio beta can be reduced to as little as 0.5. Volatility is screened for reasonableness against the benchmark with a target band of +/-3% under normal market conditions. Liquidity remains a key component and tool for risk management. As such, portfolio construction employs a liquidity screen to ensure that the most liquid assets are used in the portfolio. These guidelines call for the portfolio to maintain a liquidity position such that 50% of the portfolio's individual positions account for no more than one third of their respective daily average volumes. The purpose of this is to ensure portfolio liquidity and flexibility throughout the market cycle. When emerging markets become stressed, the correlations between countries converge. Historical relationships break down, making hedging difficult. The only way to preserve capital in these markets is to be in cash. The mandate allows for the manager to be up to 100% in cash. This flexibility has proven vital for the ongoing success of this product, and is The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 3

4 something peers cannot necessarily rely on. To move quickly into cash, only the most liquid stocks in each index are traded. Individual security and issuer positions are limited to 7.5%. Regional diversification varies according to maximum levels fixed at 50% to Latin America, 60% to Asia, and 50% to Eastern Europe. At least 50% of equity exposure must be held in the BRIC countries. The maximum exposure for China, Chile, Taiwan, and Hong Kong is 30% each. For Brazil, the Czech Republic, Hungary, India, Israel, Malaysia, Mexico, Poland, Russia, South Africa, South Korea, and Thailand, exposure is limited to 25%. For Argentina, Colombia, Egypt, Indonesia, Jordan, Morocco, Pakistan, Peru, the Philippines, Sri Lanka, Turkey, and Venezuela, exposure is limited to 7.5% each. Risk Constraints Typical number of stocks Active stock limits (%) Max 30 Active sector limits (%) Max 30 Maximum cash holding (%) 100 Targeted tracking error (%) 3-5 Active country limits (%) 30 Currency Management Currency exposures are 100% hedged back to Australian dollars. Performance Detractors Sector 3 Years* *Value Add (% p.a.). Regional Exposure Versus Benchmark (at March 31, 2010) Sector Exposure Versus Benchmark (at March 31, 2010) The fund was launched in November Performance to date has been very impressive. Since launch the fund has returned 79% gross of fees and 54% net. The index returned 23% over the same period. The managers have added value in both rising and falling markets, resulting in an up capture ratio of 89% and a down capture ratio of 70%. Portfolio Review The manager continues to hold a bullish view on commodities. As of the end of March 2010, it remained positive toward Brazil and Russia. Both countries have high exposure to raw materials in their indices, particularly the energy sector. The manager is wary, however, that the Brazilian monetary authorities are behind the curve and so have scaled back some of the exposure. Russia is much better placed. The portfolio held ishares replicating the indices of the following countries: China (17.2%), Brazil (14.8%), Korea (13.5%), Taiwan (10.7%), Mexico (8.6%), South Africa (6.7%), Malaysia (2.9%), other emerging (2.3%), and Turkey (1.5%). The fund also held a Barclays ipath exchange-traded note (6.7%) and an over-the-counter performance swap (3%) in India. In Russia, the portfolio holds shares in Norilisk Nickel Mining (2.4%) and Lukoil (0.5%), and a Market Vectors ETF (5.7%). The fund held 3.6% cash. Top Five Contributors and Detractors (at March 31, 2010) Contributors Sector 1 Year* Contributors Sector 3 Years* Detractors Sector 1 Year* Management Group Profile The investment manager of the fund was formerly Globalis Investments LLC, an entity formed in a joint venture between Macquarie Group and OneWorld Investments L.P. OneWorld was established in 1999 by its two principals, Mr. Dali and Mr. Sosa. Globalis Investment LLC became a 100% owned entity of Macquarie Holdings (USA) Inc., a subsidiary of Macquarie Group, on Oct. 1, Mr. Sosa resigned at this time. Since the end of March 2009, the fund has been managed by Macquarie Capital Investment Management. Macquarie Investment Management Ltd. (MIML) is the responsible entity for the fund. It is a part of the Macquarie Group, a diversified financial company. MIML is a fullservice fund manager, with more than 25 years' experience across major asset classes. The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 4

5 Funds Under Management As of March 2010, the unhedged fund and the hedged feeder fund totalled US$108 million. They also manage another two mandates along the same strategy one institutional mandate and the European retail version of the strategy. The managers are currently operating well within their capacity estimates and looking to add further mandates in the future. Funds Under Management Table (at March 31, 2010) Current pool size ($) Total FUM in strategy ($) Estimated capacity for strategy ($) Total FUM across all asset classes ($) Net strategy flows over past 12 months ($) US$108 million A$550 million US$3 billion A$10.5 billion US$16 million The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 5

6 Performance Analysis 3yr Rolling Returns, Over 5 Years Macquarie BRIC Advantage Hedged Benchmark: MSCI EM NR AUD. Annualised Net Returns % (at June 30, 2010) 1 Year 3 Years 5 Years 10 Years Fund performance (% p.a.) Income (% p.a.) Growth (% p.a.) Benchmark performance (% p.a.) Excess return (% p.a.) Peer group return (% p.a.) Standard deviation (%) Sharpe ratio Information ratio Tracking error Benchmark: MSCI EM NR AUD. The contents of this report are subject to the disclaimer on the final page. July 28, 2010 Page 6

7 Fund Rating Philosophy A star rating is a forward looking assessment of a manager's ability to consistently generate risk-adjusted returns (net of fees) in excess of both its relevant investment objectives and its peers. Fund Rating Process In assigning a star rating to a fund, Standard & Poor's evaluates: the size, skill, and stability of the manager's investment team; the clarity, implementation, and risk management of the investment process; the fund's objectives, fee structure and portfolio characteristics; and the manager's business management. Fund Rating Definitions Standard & Poor s has very high conviction that the manager will consistently generate risk-adjusted fund returns in excess of its relevant investment objectives and relative to its peers. Standard & Poor s has high conviction that the manager will consistently generate risk-adjusted fund returns in excess of its relevant investment objectives and relative to its peers. Standard & Poor s has conviction that the manager will generate risk-adjusted fund returns in-line with its relevant investment objectives and relative to its peers. Standard & Poor s has conviction that the manager will not generate risk-adjusted fund returns in in-line with its relevant investment objectives and relative to its peers. Standard & Poor s has high conviction that the manager will not generate risk-adjusted fund returns in-line with its relevant investment objectives and relative to its peers. Issues that may affect the fund's management have emerged; and the fund rating is temporarily suspended, pending clarification. Significant issues exist that potentially will adversely affect the fund s performance. Investors should consider obtaining advice on switching or redeeming funds. Fund Rating Subscript here the investment process, fund manager, or the fund has a relatively short history, or the analytical team has changed significantly, but a relevant and demonstrable track record is shown on similar funds. Glossary of Terms Benchmark The standard (e.g. an index) by which an investment is measured against to evaluate performance. Excess Return Return of an investment relative to its benchmark. FUM Funds Under Management - The total value of the funds managed by an asset management firm. High Water Mark The highest net asset value (NAV) of a fund achieved to date. If the NAV of a fund falls below this level, no performance fee will be payable to the investment manager until this level is subsequently exceeded. Hurdle Rate A minimum rate of return that a fund must achieve before a performance fee can be charged. This can be the benchmark or the benchmark plus an additional fixed rate. Performance Fees A fee payable in excess of the ongoing management fee. There is often a hurdle rate and/or high watermark that must be reached before this fee is payable. ICR-Indirect Cost Ratio Information Ratio MER-Management Expense Ratio This is a ratio of indirect costs to the total investment in a particular fund expressed as a percentage. It includes the MER, expense recoveries, performance fees and other costs associated with running the fund. Is a measure of the relative reward for the relative risk taken (excess returns of an investment (above the benchmark) divided by the tracking error). A positive information ratio would indicate efficient use of risk by the manager. This ratio is a calculation of investment management, marketing, trusteeship, legal, accounting and auditing costs of a managed investment fund expressed as a percentage of a fund s net asset value. It is the ongoing charges for managing a fund. The average return of the funds in the relevant S&P peer group. Peer Group Return Sharpe Ratio Is a measure of risk-adjusted performance, measuring the absolute reward for the absolute risk taken (return of the investment less the risk-free rate (e.g. bank bills) divided by the standard deviation). The higher the Sharpe ratio the greater the efficiency produced by the manager. Standard Deviation Measure of the variability or volatility of the monthly returns of the fund. Tracking Error Ex Ante Trading Error Ex Post Trading Error How closely a portfolio follows or "tracks" an index to which it is benchmarked. (the standard deviation of monthly excess returns against the benchmark). Predicted or forecast of tracking error. Historical or actual tracking error. Disclaimer: Standard & Poor's Information Services (Australia) Pty Ltd (ABN ) (Standard & Poor's) rating and other opinions are and must be construed solely as statements of opinion and not statements of fact or recommendations to purchase, sell or hold any financial product(s). Conclusions, ratings and opinions are reasonably held at the time of completion but subject to change without notice. Standard & Poor's assumes no obligation to update any information following publication. No warranty, express or implied, is given or made by Standard & Poor's as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Standard & Poor's rating, opinion or other information and Standard & Poor's will not be liable to any party in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of any party relying on any such rating, opinion or other information (except in so far as statutory liability cannot be excluded). Any statement of fact is based on information provided to Standard & Poor's by our clients or obtained from sources which Standard & Poor's considers reliable. Standard & Poor's does not perform an audit in connection with any rating and may rely on unaudited information. Because of the possibility of human or mechanical error by our sources, Standard & Poor's or others, Standard & Poor's does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Readers should make their own inquiries. Warning: Past performance is not a reliable indicator of future performance. Any express or implied Standard & Poor's rating or advice is limited to "General Advice" and based solely on consideration of the investment merits of the financial product(s) alone. The information has not been prepared for use by retail investors and has been prepared without taking account of any particular person's financial or investment objectives, financial situation or needs. Before acting on any advice, any person using the advice should consider its appropriateness having regard to their own or their clients' objectives, financial situation and needs. You should obtain a Product Disclosure Statement relating to the product and consider the statement before making any decision or recommendation about whether to acquire the product. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any adviser and any such adviser must accordingly make their own assessment taking into account an individual's particular circumstances. Disclosure: Analyst Disclosure: Analyst(s) remuneration is not linked to the rating outcome. The Analyst(s) may hold the financial product(s) referred to in a Standard & Poor's rating or other research report but Standard & Poor's considers such holdings not to be sufficiently material to compromise the rating or opinion. Analyst(s) holdings may change at any time. Standard & Poor's Disclosure: In the event of any person subscribing to any rated financial product(s), such subscriptions may result in a Standard & Poor's client receiving a commission, fee or other benefit or advantage. Details of any such benefits can be obtained from your financial adviser. Standard & Poor's itself does not receive any commission. Prior to the assignment of any rating, the fund manager or another Standard & Poor's client agreed to pay Standard & Poor's a fee for the appraisal and rating service rendered. Standard & Poor's assigns ratings using comprehensive and objective criteria. Standard & Poor's fee is not linked to the rating outcome. Costs incurred during the rating process, including travel and accommodation expenses, may be paid for by the fund manager or another Standard & Poor's client to enable onsite reviews. Standard & Poor's does not hold or have a material interest in any rated financial product(s). Standard & Poor's associates may hold rated financial product(s) but detail of these holdings are not known to the Analyst(s). Standard & Poor's from time-to-time provides fund managers and other clients with investment data, research software, and other financial planning services. Standard & Poor's is a wholly owned member of The McGraw-Hill Companies, Inc, a New York Corporation. The analytic services and products provided by Standard & Poor's and its associates are the result of separate activities in order to preserve the independence and objectivity of each analytic process. Each analytic product or service is based on information received by the analytic group responsible for such product or service. Standard & Poor's and its associates have established policies and procedures to maintain the confidentiality of non-public information received during each analytic process. Standard & Poor's holds an Australian Financial Services Licence Number Please refer to Standard & Poor's Financial Services Guide for more information at "S&P" and "Standard & Poor's" are trademarks of The McGraw-Hill Companies, Inc. Copyright 2010 Standard & Poor's Information Services (Australia) Pty Limited. Certain funds data contained herein may be proprietary to Morningstar Inc.