FUNDS TALKING POINT QUARTERLY FUNDS NEWSLETTER - Qtr. 2, 2012 All information in this document is correct as at 31st March 2012
Content 1 Welcome...2 Most Popular Funds with Generali International planholders...3 Top 5 Overall Funds during quarter ending 31/03/2012...3 Top 5 USD and EUR Funds during quarter ending 31/03/2012...3 Top 5 Overall Funds year to date 01/01/2012 to 31/03/2012...3 Profiling the Fund Range for quarter ending 31/03/2012...4 Fund Houses and Total Open Funds Range...4 Currency Denominations and Risk Ratings...4 Generali International Risk Ratings...5 New Funds added to the Generali International Unit-linked Funds Platform during quarter ending 31/03/2012...6 Funds Information for quarter ending 31/03/2012...7 Other Points of Interest...8 Focus on Fixed Interest Invesco Sterling Bond Fund - Invesco Asset Management Limited...8 Don t forget the Morningstar Funds Tools!...9
Welcome 2 Welcome to Funds Talking Point, Generali International s funds newsletter keeping you informed about the latest news affecting our unit-linked fund range. This includes identifying the most popular funds for the quarter, a profile of the current fund range and other fund news items we hope you will find useful. We continue to work hard on our fund proposition to help you to meet the demands of your clients and we hope that you enjoy the read. We would also welcome any feedback you may have with regard to this newsletter - please drop us an email: fundsmarketing@generali-guernsey.com Please note that this document is not an offer for sale and Generali International Limited is in no way presenting a recommendation of these funds or suggesting that one fund is better than another fund. Generali International Limited does not provide investment advice based on individual circumstances. Investment decisions are the responsibility of the financial adviser and/or investor(s) and any choice of investments is entirely at their own risk. Please note that funds internally managed by Generali International Limited are not available for offering to Hong Kong investors. It is important to note that funds mentioned in this newsletter may not be authorised for sale in Hong Kong and Singapore and hence not available to these investors. Please refer to the current International Fund Selection Brochure (IFSB) available on request from Generali International Limited.
Most Popular Funds with Generali International planholders - for quarter ending 31/03/2012 3 The rankings on this page were measured based on the value of Generali International s net investment into the funds on behalf of unit-linked planholders during the relevant period. Top 5 Overall Funds during quarter ending 31/03/2012 1. First State China Growth Fund I USD 2. Pictet (CH) Physical Gold R USD 3. JF India 4. HSBC GIF Brazil Equity USD 5. HSBC USD Liquidity Fund C Top 5 Overall Funds year to date 01/01/2012 to 31/03/2012 1. First State China Growth Fund I USD 2. Pictet (CH) Physical Gold R USD 3. JF India 4. HSBC GIF Brazil Equity USD 5. HSBC USD Liquidity Fund C Top 5 USD and EURO Funds during quarter ending 31/03/2012 Top 5 USD Funds Top 5 EUR Funds 1.) First State China Growth Fund I USD 1.) HSBC Euro Liquidity Fund C 2.) Pictet (CH) Physical Gold R USD 2.) Fidelity Funds Germany Fund 3.) JF India 3.) Fidelity Funds European Growth Fund 4.) HSBC GIF Brazil Equity A 4.) CF Miton Special Situations F Acc 5.) HSBC USD Liquidity Fund C 5.) JP Morgan Global Natural Resources A
Profiling the Fund Range - for quarter ending 31/03/2012 4 Fund Houses and Total Open Funds Range Funds on the unit-linked range have been hand-picked to maximise the investment opportunities for your clients. These funds range from the secure to those offering capital protection through to those aimed at the more adventurous client. They are managed by various world-class fund houses. Below you will find the number of fund houses currently used by Generali International and the total number of funds currently on the unit-linked fund range. Fund Houses - 32 Total Open Fund Range - 156 Currency Denominations and Risk Ratings Currency Denominations Risk Ratings USD 86 High Risk - 65 Euro 32 Medium/High Risk - 42 GBP 25 Medium Risk - 14 AUD 1 Medium/ Low - 18 HKD 1 Low Risk - 17 JPY - 2 SGD - 9
Generali International Risk Ratings 5 To help you and your client select the most suitable funds that best fit with your clients attitude and approach to risk, Generali International has devised a range of 5 risk ratings and each of the funds on the current fund range are risk rated. To the right is an explanation of each risk rating. For further information on the current fund range, including all of the funds listed in this document, please refer to the Generali International website where you will find our International Fund Selection Brochure: www.generali-gi.com/funds/fundinformation.html. To access the current fund factsheets, please go to Funds Platform Broker Access: www.generali-gi.com/funds/brokerfundsplatform.html. Please note that access to view the fund factsheets is restricted - please consult with your Generali Representative for more information. Past performance is not indicative of future performance. Investors and/or their investment advisers are responsible for their investment decisions and any choice of investments options is entirely at their own risk. Please note that investment performance may go down as well as up. LOW Risk Rating a These funds are for investors who require a high degree of security as they offer low risk growth potential. Medium/LOW Risk Rating a a These funds are for investors seeking capital growth with some price volatility as they offer a broad spread of investments across major world markets. Medium Risk Rating a a a These funds are for investors seeking the potential of growth over the medium term as they invest in the world s major equity markets. However, it should be noted that the potential for superior growth is balanced by the increased risk of price fluctuations. Medium/High Risk Rating a a a a These funds are for investors seeking the potential of superior capital growth as they invest in the world s more specialist markets. However, it should be noted that the volatility in these markets increases the risk of loss. High Risk Rating a a a a a These funds are for investors seeking the possibility of fast appreciation of capital as they invest in individual sectors or emerging markets. However, it should be noted that although these markets have the potential to deliver high returns this can be offset by large falls during periods of adverse volatility. The high risk/reward ratio of these funds usually makes them suitable only for a small part of a structured portfolio.
New Funds added to the Generali International Unit-Linked Funds Platform - during quarter ending 31/03/2012 6 The following SGD share classes were launched with effect 31 January 2012: JF Singapore A Acc - LU0456852689 JPM Emerging Markets Equity A Acc - LU0456842615 JPM Global Natural Resources A Acc - LU0456854461 JF Greater China A Acc - LU0456846285 Franklin Templeton Emerging Markets A Acc - LU0320764243 BGF World Gold A2 - LU0368265764 The following funds were launched with effect 08 February 2012: Polar Capital Funds PLC Global Technology Class R USD, EUR & GBP - GBP fund: IE00B42N8Z54 - USD fund: IE00B433M743 - EUR fund: IE00B4468526 The investment objective of the fund is long-term capital appreciation by way of investing in a globally diversified portfolio of technology companies. The fund will invest at least two thirds of its total assets in technology-related companies worldwide. The fund will take a geographically diversified approach and operate within broad asset allocation ranges, but there are no specified limits on investing in any geographical region or single country. Aberdeen Global Responsible World Equity Fund A2 USD -LU0278938138 The investment objective is to achieve long-term total return by investing in equities selected on the basis of fundamental company analysis together with environmental, social and governance criteria. The following fund was launched with effect 21 February 2012: Pictet Premium Brands Class P USD - LU0280433847 The sub-fund seeks capital growth by investing at least two-thirds of its total assets in the shares of companies in the premium brands sector providing high-quality services and products. The investment universe will not be restricted to any particular region. The following SGD share classes were launched with effect 26 March 2012: JF India A (acc) - LU0456849545 JF Asean Equity A (acc) - LU0532188223 Jupiter India Select Class L USD, EUR & GBP - LU0365089902 (USD) - LU0329070915 (EUR) - LU0329071053 (GBP) The investment objective is to achieve long-term capital growth through investment primarily in India and selected opportunities in Pakistan, Bangladesh, Sri Lanka, Bhutan, Nepal and the Maldives.
Funds Information - for quarter ending 31/03/2012 7 Effective as of March 2012. Closed Generali International Ethical Fund Replaced with Aberdeen Global Responsible World Equity Fund A2 USD The base currency of the Invesco Japanese Equity Core Fund C changed from USD to JPY - effective as of 31 March 2012.
Other Points of Interest 8 Focus on Fixed Interest - Invesco Sterling Bond Fund Invesco Asset Management Limited Author Cathal Dowling and Fund Manager Michael Matthews (Invesco) - March 2012 Inflationary pressures in the UK economy remain low. Unemployment is high and rising, wage growth is very low and consumer confidence and retail sales are very weak. This soft demand environment offset rises in the oil price and the VAT rate in 2011 and is now pushing down the headline inflation rate as the impact of these two factors diminishes. The annual rate of growth in the Consumer Price Index has fallen rapidly over the past few months, from a peak of 5.2% in September to 3.4% in February and it is expected to fall further during the course of 2012. This downward trend supports the position held by the Monetary Policy Committee of the Bank of England for the past several quarters. The committee has chosen to look through headline inflation and temporary factors in the belief that economic forces would reduce inflation towards the target rate of 2% over time. Monetary policy has continued to be very accommodative by historic standards. The bank s interest rate has been held at a record low level of 0.5% for three years. Market expectations are that there will be no rise in the interest rate until at least the middle of 2013. In this environment, it is not surprising that Gilt yields are low. In fact, they are at multi-decade lows. Over the past few months the UK government has been able to borrow 30 year money at 3%, 10 year money at 2% and 2 year money at less than 0.5%. In real terms, these yields are negative. While this is good news for the government, it does not make for a good investment. As well as negative real yields and limited potential upside, investment at this level could result in significant capital losses if yields increase by what would, in historical context, be quite modest increments. For example, a 10 year Gilt would suffer a capital fall of 8.3% were the yield to rise by 1% from the level of late March 1. Were the yield to rise 1.5% the loss would be 12.2%. We do not expect an imminent, significant rise in yields but there are risks. A pause or reduction in the quantitative easing programmes of the major central banks could remove support for government bonds. A continuation of the investor appetite for corporate credit which we have seen over the past few months could also be a negative factor. We do not think investors are being paid for these risks at current yields. For more attractive returns over the medium to long term, we believe that we need to look elsewhere. Notwithstanding the rally since December, credit spreads remain relatively wide in many parts of the fixed interest market. We see select opportunities across the corporate bond market but we continue to believe that the biggest area of value is in financials. Since the financial crisis of 2008/9, we have believed that the reform and rehabilitation of financial capital structures would be the most important theme in investment markets for years to come. We see this as a big investment opportunity. As banks adapt their capital structure and their businesses to the new regulatory environment, changing their balance sheets, retiring less effective capital instruments and issuing new instruments more closely aligned with their new regulatory capital targets, we believe there will be opportunities to find value across the capital structure and across banking names. We have significant exposure to a range of financial capital instruments in the Invesco Sterling Bond Fund. The sector has performed very well in recent months but in many cases yields are still highly attractive and we think there is potential for further capital appreciation. As of the end of March, the aggregate yield for the sterling Tier 1 subordinated bank debt sector (according to Merrill Lynch) was 9.8%, compared to a yield on Gilts of 2.1%. We believe that yields and spreads like this compensate for the additional risk and volatility seen in this sector and can make a valuable contribution to the long-term performance of our fund. 1 Source: Invesco Perpetual, Bloomberg, 26 March 2012. Important Information The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested. Past performance is not a guide to future returns. Where Michael Matthews has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals. Where securities are mentioned in this document they do not necessarily represent a specific portfolio holding and do not constitute a recommendation to purchase or sell.the Invesco Sterling Bond Fund invests in bonds and other fixed income securities that are subject to the risk that issuers do not make payments on such securities. The fund may be adversely affected by a decrease in market liquidity which may impair the fund s ability to acquire or to dispose of securities at their intrinsic value.futures may be used in the management of duration and where held they will be detailed in the annual and interim report [if applicable]. The Invesco Sterling Bond Fund may invest in high yield bonds which are regarded as being more speculative (than investment grade bonds) as to the issuer s ability to make payments of principal and interest. Please refer to the most up to date relevant fund and share class-specific Key Investor Information Document for more information on our funds.
Other Points of Interest 9 Don t forget the Morningstar Funds Tools! FUND QUICKRANK This tool allows for a quick and easy method of screening and comparing a range of funds in terms of their performance and volatility. To access please copy the following link into your internet browser: http://www.generali-gi.com/funds/ FUND SCREENER This tool enables users to create a shortlist of funds which meet their specified criteria. For example, sorting by region, fund manager, currency, risk rating, etc. To access please copy the following link into your internet browser: http://www.generali-gi.com/funds/ FUND X-RAY This tool provides a snapshot view of a client s portfolio, helping you, as a broker, to identify under/over weighting, therefore taking a lot of the manual work out of reviewing a portfolio. Please visit the Service Centre, with your unique log-on and password to gain access to this tool: https://secure3.generali-guernsey.com/portfoliomanager/logon.aspx?brandid=100 INVESTMENT REPORTS These are fund factsheets offering an in-depth analysis of each fund. The investment reports are available in HTML and also PDF for printing purposes. The data behind these reports is updated dynamically to ensure that the latest information available is shown. Please note that access to view the Morningstar Funds Platform is restricted, please consult with your Generali Representative for more information.
Generali International Limited Registered Office address: Generali House, Hirzel Street, St Peter Port, Guernsey, Channel Islands GY1 4PA Company Registration No.5921 Tel: +44 (0) 1481 714 108 Fax: +44 (0) 1481 712 424 Email: enquiries@generali-guernsey.com www.generali-gi.com Licensed Insurer under the Insurance Business (Bailiwick of Guernsey) Law, 2002 (as amended) and regulated by the Guernsey Financial Services Commission Generali International Limited is part of the Generali Group, listed in the Italian Insurance Group Register under number 026. This document may contain products which are not authorised in Hong Kong and hence not available for offering to Hong Kong investors.