FMG Global H1-10 AJ Version2

8/8/2019 FMG Global H1-10 AJ Version2

1/10

1

The Fund

Disclaimer: This summary is for information purposes only and does not constitute an offer to sell or a solicitation to buy. Citizens or residents of the United States may not invest in this Fund. Opinions and estimates constitute the managers judgment and are subject to change without notice.Past performance is not indicative of future results. Investments in emerging markets should be considered high risk where a portion or total loss of capital is conceivable. No assurance can be given that the investment objective will be achieved or that an investor will receive a return of all or partof his/her initial capital, and investment results can fluctuate substantially over any given time period. Please refer to the Funds prospectus whichcontains brief descriptions of certain risks associated with investing in the fund. Questions should be directed to your local representative or financialadvisor. This document may not be reproduced, distributed, or published for any purpose without the prior written consent of the manager.

Ver 9-10

FMG Global Hedge FundA Global Alternative Investment Fund

* Equities * Fixed Income * Commodities

* Cash * Alternative Investments/ Hedge Funds * Real Estate


2/10

2

FMGs oldest Fund (1991), the FMG Global Hedge Fund has historically been a Fund of Fund consisting of

primarily equity and macro long/short hedge fund managers. The focus now has shifted to become more

diversified and transparent by using a systematic discipline in more global asset classes.

The crash of 2008, the worst since the great depression in the 1930s, have resulted in clients requiring better

transparency, liquidity and diversification. Hedge funds have in general underperformed on the way up and not

protected successfully on the way down.

As of May 1 2010 FMG has replaced all hedge funds with a systematic approach that shifts assets between the

following various global asset classes:

Equities Fixed Income

Commodities

Target return of the new Global Hedge Fund is 10%+ per annum, pro-forma returns from 2001 has been 15%

per annum.

Overview

Cash

Alternative Investments/Hedge Funds

Real Estate


3/10

3

Simulated Return for the new Strategy

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

06-01

01-02

08-02

03-03

10-03

05-04

12-04

07-05

02-06

09-06

04-07

11-07

06-08

01-09

08-09

03-10

Growth

of$1,0

00

invested

FMG Global

MSCI World

MSCI Europe

From/ Thru: 6/ 01 2002 2003 2004 2005 2006 2007 2008 2009 4/ 10

FMG Global (0.39)% (4.00)% 45.96% 14.59% 28.15% 22.25% 20.06% (15.10)% 35.87% 6.24%

MSCI World (10.49)% (21.06)% 30.81% 12.84% 7.56% 17.95% 7.09% (42.08)% 26.98% 2.58%

MSCI Europe (7.52)% (20.11)% 34.79% 17.85% 6.54% 30.22% 10.96% (48.20)% 31.24% (5.36)%

Fund returns net of pro forma fees


4/10

4

Overview

Several studies show that 70%-90% of the difference in returns between similar portfolios are derived from

asset allocation, not the selection of individual securities. It is therefore more important to decide whether to

own equities at all, than to choose between Microsoft and Apple.

FMG Global Hedge Fund focuses exclusively on asset allocation and invests globally in equities, fixed income,

cash, commodities, real estate and alternative investments/hedge funds. The portfolio is highly diversified both

between and within the asset classes and regions. Asset weights are systematically shifted over time according

to strict rules in order to find the optimal portfolio for the current market climate.

Benefits of the systematic strategy:

A good diversification to FMGs Emerging Markets Funds.

Focuses on asset allocation, the main return driver in a global portfolio.

A systematic investment process free from subjective forecasts of the financial markets.

A better risk adjusted return with lower risk for extreme outcomes (-15.1% in 2008).

A dynamic portfolio which has historically adopted to the current market climate.


5/10

5

The asset c lasses:

Equities Max 60%

Fixed-Income Max 20%

Commodities Max 20%

Cash No restriction

Alpha (Alternative Investments/Hedge

Funds) Max 30%

Real estate Max 20%

Leverage:

Max 50%

Investments:

All underlying investments are publiclylisted and most offer daily liquidity

Overview

Example of asset allocation:


6/10

6

Asset Class breakdown an example

Equities Fixed-Income Commodities Cash Alpha-Alternatives

Real Estate

Developed regions Developed regions Types Regions Regions Regions

US US Agriculture US Global USA

EU EU Base metals Europe Global x USA

Japan Japan Precious Metals

Emerging markets Emerging markets Energy

Emerging Asia Asia Instruments Types Type: REITs

Emerging Europe Emerging Europe Treasury bills Diversified ExchangeTraded Hedge Funds

Office/industrial

Latin America Latin America Money market funds Residential

BRIC Ultra-short bond funds

Other characteristics Other characteristics

Size (small, mid, large) Issuer (government,agency, corporate)

Style (growth, value) Rating (investment grade,high-yield)


7/10

7

Asset class returndistributions

Correlation estimatesbetween all assets

Current relative market

conditions,performance zones

Minimum return targetand risk constraints

Objective

Minimum return target equalslong-term growth of globalequities

Constraints

Maximum allocations Maximum leverage

Gain/Loss optimisation

Inputs Process Outputs

Portfolio weights; how much?

Expectation

Probability of outperformance

Risk of loss

Mean = 10.5%

-30% -10% 10% 30% 50%

The Systematic Process

Technical analysis is used once a decision is made. Normally the portfolio is invested in 3-5 out of the 6 asset classes.

Portfolio is typically rebalanced quarterly with minor adjustments on a daily basis. Turnover per annum is 2-3 times.

Equities,40%

Commodi-ties, 10%

FixedIncome,

15%

RealEstate,

5%

Alpha,15%

Cash,15%


8/10

8

The Systematic Process example of assetallocation over time


9/10

9

Why Invest in FMG Global Hedge Fund?

SMPLE

Period: Jun-01 to Apr-10

FMG Global MSCI MSCI

Return Simulation Global Emg MktsTotal period return (cumulative) 378.7% 15.6% 233.5%

Annual rate of return 19.2% 1.6% 14.3%

Largest monthly gain 13.6% 10.5% 12.5%

Largest monthly loss -9.7% -16.9% -22.3%

Gaining months 68.5% 59.8% 60.7%

Average monthly return 1.6% 0.2% 1.3%

Risk

Annual standard deviation 15.0% 15.7% 20.4%

Annual downside deviation 8.1% 11.9% 13.6%

Largest drawdown -23.0% -51.0% -51.9%

Return/Risk Rations

Sharpe ratio 1.1 Negative 0.6Sortino ration 2.0 Negative 0.9

AROR/Largest drawdown 0.8 0.0 0.3

Correlation

Entire period 0.6 0.8

Note: net of manager fees


10/10

10

FMG - Marketing Contacts

Asia

Charles Cantlie & Jeffery Shen

Tel: +44 20 7581 3149

Fax: +44 20 7584 5484

e-mail: [email protected]


MaltaErik Nelson & Mark MalliaTel: +1 203 968 0101Fax: +1 203 322 1464e-mail: [email protected]: [email protected]

Fund AdministratorApex Fund Services (Malta) Ltd., Floor 6, Airways House, Gaiety Lane, Sliema, SLM 1549, Malta

Tel: 356 2131 1330 - Fax: 356 2131 2880 - e-mail: [email protected]

www.fmgfunds.com

EuropeFredrik Edensvrd & Johan Kahm

Tel: +46 8 545 06 180

Fax: +46 8 545 06 189



UK

Charles Cantlie, Avon Cayzer &Francis Salvesen

Tel: +44 20 7581 3149

Fax: +44 20 7584 5484


e-mail: [email protected]: [email protected]

Scandinavia

Fredrik Edensvrd & Karl Grewin

Tel: +46 8 545 06 180

Fax: +46 8 545 06 189




Documents

FMG Global H1-10 AJ Version2