gll adelphos
TRANSCRIPT
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GLL Adelphos
Fund
1
GLL Adelphos FundSeeking Alpha in an uncertain
market
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GLL Adelphos
FundScope
1. Fund Objective
2. NY Storm Crisis
3. Global Market Outlook
4. Fund Holdings
5. Conclusion
2
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GLL Adelphos
FundFund Objective
Achieve long-term capital growth by investingin a diversified portfolio of quality funds withproven track record
3
Review Macro Environment
Select Asset Classes
Select
funds
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GLL Adelphos
FundKey Development - NY Storm Crisis
Property values plummet
Sharp decline in consumer spending
Loss of tourism revenue
Agriculture damage
4
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Fund
10200
10250
10300
10350
10400
10450
10500
10550
10600
10650
10700
10750
12-Jul-05 19-Jul-05 26-Jul-05 2-Aug-05 9-Aug-05 16-Aug-05 23-Aug-05 30-Aug-05 6-Sep-05
S&P 500
Potential Impact of NY Crisis on US Equity Market
5
-2.9%
Hurricane
Katrina
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Fund
Assets Impact
US Equity Market
Insurance companies
Materials an construction
Fixe income
Gol an other commo ities
Potential Impact of NY Crisis on financial markets
6
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GLL Adelphos
FundMacroeconomic Outlook
7
Market rally in 2009 driven bymassive liquidity
Mixed picture in 2010 with
sluggish recovery in G3
economies and bubble risk in
Asia
Expect policy exits to happen
after a sustained recovery of
G3 economies
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FundMarket Outlook
8
S&P Emerging Asia
Pacific 93%
S&P 500
68%
FTSE 10059%
Nikkei 225
43%
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FundMarket Outlook
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Hot money flows into Asia driven by spreads between Asian and G3 interest rates
and anticipated GDP growth
Market prices largely reflect positive news flow
Asia Strongest in recoveryAttractive
Key Risk
Asia still dependent on G3
recovery
Double-dip market
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FundMarket Outlook
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China The Worlds growth engine
Source: Factset
Sustain GDP growth at ~8% and CPI below 3% for 2010
Explosive credit boom: PBOC target new loans at RMB 78 trn for 2010
eutral
Key Risk
Regulatory risk
ithdraw preferential policies
for property and auto sector
Tightened lending to property
sector in Tier 1 cities
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FundMarket Outlook
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USA Robust recovery
Money market funds totaled $3.32 trillion in Dec 09 vs. $2.40 trillion undernormal market conditions
Focus on US Quality Blue chips
Key Risk
Consumer spending fails to rebound due to rising unemployment
Dismal Q1 corporate earnings
NY Storm Crisis results in sharp decline in consumer spending
ttractive
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FundMarket Outlook
12
Europe Balancing the union
One-size-fits-all policy resulted in severe deflation in Greece and Spain Government balance sheet repair in progress
EU Unemployment rate remained at a high 9.8%
UK valuations o at 12x vs. 11.8x average Too optimistic
Source: Consensus Economics Inc.Source: Haver Analytics
nattractive
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FundMarket Outlook
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Deterioration in public finances, deflationary environment and weak consumerdemand
Equity performance hinges on the weakening of the Yen
Unattractive valuations with PE 1.7x vs. 1.5x average
Japan Still in the doldrumsUnattractive
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FundAsset Allocation
14
Underweight Neutral Overweight
Equities Europe, UK
Japan
China, HK Indonesia
US Blue Chip
Bonds Corporate bonds Convertible
AlternativeAssets Commodities
Fund Invested
Amount
SCHRODER Alternative Solutions
Commodities Fund
$3,500,000
DBPlatinum IV CROCI US $3,000,000
ABERDEEN Indonesia Equity Fund $2,500,000
PARVEST Asian Convertible Bond $1,000,000
SCHRODER
Alternative
Solutions
Commodities Fund
35%
DB PlatinumIV
CROCIUS
30%
ABERDEEN
IndonesiaEquity
Fund25%
PARVEST
Asian
Convertible
Bond
10%
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FundBonds: The End of A Bull Market
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Graph Source: Traders Narrative
1982-2009 is the longest bond bull
market ever seen. This will not persist
as interest rate will rise from current
low levels
1982-2009 is the longest bond bull
market ever seen. This will not persist
as interest rate will rise from current
low levels in our investment horizon of
5 years
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FundPARVEST Asian Convertible Bond
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Convertible Bonds
Best ofBoth Worlds
Bond Portion:Accounting for the
defensive aspect
Convertible Portion:Provide exposure to
possible upside
Sources: Fund Factsheet
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FundCommodity Demand Outpace Supply
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Growth of
Emerging Markets
Growth of
Emerging Markets
Recovering
Economy
Recovering
Economy
InflationInflation
Rising Affluence + Massive Population
Growing consumption
Rapid Urbanization & Industrialization
Infrastructure Needs
Loose Monetary Policy + Stimulus
Inflation
Commodity provides an excellenthedge Worsening ClimateWorsening Climate
Sustainable Economic Recovery
Rebuilding of economy willspur commodity demand
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FundSchroder Commodities SGD Fund
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FundName Emphasis YTD (%) Management
Fee
Annual
Expense Ratio
Schroder AS Commodities Energy, Agriculture,Metals -3.13% 1.5 2.01%
BNPParibas Agriculture Agricultural Commodities
Indexes -100%
-6.89% 1.5 3.47%
Schroder AS Gold & Metals Precious Metals &
Industrials Metals-90%
-0.27% 1.5 N/A
United Commodities Plus Bonds-91.43% -1.51% 1.5 2.98%
PortfolioExposure Since Launch
PreferDiversifiedVS
Theme-Orientated
Commodity Fund
Sources: Fund Factsheet
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FundPlatinumIV CROCIUS
19
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FundPlatinumIV CROCIUS
20
AbetonAmericaAbetonAmerica
I. Worlds largest economy
II. Recovery on the horizon
III. Return to normalization
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FundPlatinumIV CROCIUS
21
Source: IMF 2008 World GDP
US contributeslions share to
World GDP
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FundPlatinumIV CROCIUS
22
Unemployment rate
expected to plateau
Source: Fed Reserve Bank of St Louis
Uptick in manufacturing
activity
Source: Fed Reserve Bank of St Louis
Similar movements in
consumer spending
Source: Fed Reserve Bank of St Louis
Recoverin
gU
S Econ
omyRecoverin
gU
S Econ
omy
GDP growth of 2.2% and 5.9%
in Q3, Q4 of 2009
Housing markets showing
signs of stabilization
Corporate earnings continue
to beat expectations
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FundPlatinumIV CROCIUS
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FED expressed reluctance to hike rates
Obama administration has extended
TARP programme until Oct 2010
Discussions for gradual
withdrawal of stimulus Growing confidence in US
financial system
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FundAberdeenIndonesiaEquity Fund
24
Why Indonesia? Government is keen on receiving foreign
investments
Rich and diversified natural resources
Competitive labor force
Strong domestic demand
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FundAberdeenIndonesiaEquity Fund
25
Indonesias exports were not
spared during downturn
However, other components
of GDP held up during crisis
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FundAberdeenIndonesiaEquity Fund
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Exports constitute a smaller portion of GDP Consumer spending picked up strongly
Source: Asian Development Bank
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FundAberdeenIndonesiaEquity Fund
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FDIinflowspickingup
Equitypricesreboundedwithregionalbourses
Source: Asian Development Bank
Portfolioinflowsresume
Risingforeigndemandforgovernmentdebt
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FundAberdeenIndonesiaEquity Fund
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FundAberdeenIndonesiaEquity Fund
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Domestic Consumption
Lessdependentonexports
InfrastructureDevelopmentUS$140bngovernmentspending
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FundConclusion
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Underweight Neutral Overweight
Equities Europe, UK
Japan
China, HK Indonesia
US Large Cap,
Bonds Corporate bonds Convertible
AlternativeAssets Commodities
Fund Invested
Amount
Portfolio
Weight
SCHRODER Alternative Solutions
Commodities Fund
$3,500,000 35%
DBPlatinum IV CROCI US $3,000,000 30%
ABERDEEN Indonesia Equity Fund $2,500,000 25%
PARVEST Asian Convertible Bond $1,000,000 10%
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FundLinks
Global Deficit
US Sector focus
US Capacity Utilization
Strong Commodity Demand
Correlation of asset classes with inflation
CPI
Supply Shortage Inflation
BOE
OECD Inventories
Indonesias Political Situation
Indonesias Economic Growth
Chinas Economic Woes Indian Powerhouse?
31
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FundGlobal Deficit
32
Source: BOA-ML Global
Research, IMF
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FundUS Sector focus
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FundUS Capacity Utilization
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FundStrong Commodity Demand
35
1,320
1,330
1,340
1,350
1,360
1,370
1,380
2008 2009 2010 2011 2012 2013 2014 2015
China Total Population (Millions)
1,130
1,150
1,170
1,190
1,210
1,230
1,250
1,270
1,290
2008 2009 2010 2011 2012 2013 2014 2015
India Total Population (Millions)
560,000
580,000
600,000
620,000
640,000
660,000
680,000
2008 2009 2010 2011 2012 2013 2014
ChinaUrban Population ('000)
330,000
340,000
350,000
360,000
370,000
380,000
390,000
400,000
2008 2009 2010 2011 2012 2013 2014
IndiaUrban Population ('000)
RapidUrbanization
Rising Population
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FundCorrelation of asset classes with inflation
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FundCPI
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FundSupply Shortage
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Booming Population
-Present farming yields have to be doubled
over the next forty years just to keep the
average per capita daily intake of calories at
the same levels as today.
Water Shortage
-Farming require vast amount of water and
demand for fresh water is climbing twice as
fast as the population is expanding
Desertification
-Arable land is shrinking at an alarming rate
EL Nino
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FundInflation
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CPIinflationhistoryfor2009 (andexpectations)
January: 3.0% (2.7%)*
February: 3.2% (2.6%)*
March: 2.9% (2.9%)
April: 2.3% (2.4%) May: 2.2% (2.0%)*
June: 1.8% (1.8%)
July: 1.8% (1.5%)*
August: 1.6% (1.4%)*
September: 1.1% (1.3%)
October: 1.5% (1.5%) November: 1.9% (1.8%)*
December: 2.9% (2.4%)*
January: 3.5% (3.5%)
Inflation beating expectation
(marked with a star below when inflation was higher than forecast):
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FundBOE
Bank of England
Current Rate: 0.5%
Current inflation:3.5%
Inflation Target: 2.0%
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FundOECD Inventories
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FundIndonesias Political Situation
42
YearElected President
1966 Suharto
1999 Abdurrahman Wahid
2001 Megawati
2004 Susilo Bambang Yudhoyono
2009 Susilo Bambang Yudhoyono
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FundIndonesiasEconomic Growth
43
Sustained
economic growth
even amidst global
headwinds
Used prudent
measures to
maintain growth
Source: Bank of Indonesia
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FundIndonesiasEconomic Growth
44
Inflation to be kept in check
Source: Bank of Indonesia
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FundChinasEconomicWoes
45
Surge in bank
lending
Property prices
skyrocketing
Property sales
volume surge
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FundIndian Powerhouse?
46
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FundKatrina and US Budget Deficit
Hurricane Katrina cost $81.2bn
US budget deficit currently at $10.6tn
Makes up 0.8% of total US budget deficit
Makes up 5% of FY09 budget deficit of $1.5tn
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*PBOC 1 year Yuan Lending Rate
Source: Aberdeen Asset Management
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Emerging Market Consumption
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1993 2008
Crude Oil 43.1% 51.8%Aluminum 32.4% 59.2%
Copper 35.2% 61.7%
Source: International Energy Agency, World Bureau of Metals and US Department of Agriculture
Market share of emerging markets in commodity consumption