Quarterly Update Fund & Market Commentary

Greystone Wealth Management

Foundation House

Scott Drive

Altrincham

Cheshire WA15 8AB

Tel: +44 0161 927 7222

Fax: +44 0161 929 1940

www.greystonefs.co.uk

GREYSTONE Wealth Management

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“A wealth of experience”

Quarterly Update

Fund & Market

Commentary Quarter 3 | 2012

2012 Investment

performance for high

growth portfolios


Economic & Market Commentary

Economic confidence is a difficult beast to manage; if it exists then an

economy will power ahead. People will spend more of their hard earned

money, businesses will invest, entrepreneurs will be inspired and banks will

be keen to lend.

If confidence is not there everything seizes up; customers hoard cash to

keep it as safe as possible, companies fortunate enough to be profitable

save cash to invest when times are better and entrepreneurs will find banks

are unwilling to back them because of increased risks.

Confidence has a self reinforcing effect. If money is flowing, the ideas are

fizzing and investment is buoyant. People make a profit, expand their

businesses and the cycle renews itself. When confidence falters and the

cash dries up, people don't have the money to bring back the good times or if

they do, they save it to provide a shelter for the rainy days that seem set to

continue and the economy deteriorates even more.

Sadly that is precisely where we find ourselves at the moment. The problems

facing the world, of which there are many, are difficult although not

insurmountable but lack of confidence makes the problems seem worse.

Three major factors are affecting confidence at the moment.

Firstly the outlook for Europe remains uncertain and the crises could

escalate further before resolution. The situation is both a short and a long

term crisis. In the short term, it centres on the solvency of the banking

system, while in the long term structural reform and fiscal union are required.

A number of issues are as yet unresolved with politicians from different

countries unable to reach agreement. These issues will continue to create

uncertainty in the weeks ahead and European markets could face a bumpy

ride in the short term.

Despite this uncertainty however, the fact remains that there are a number of

world class companies based in Europe and these companies have robust

business models with exposure to long term global growth trends. We view

these companies positively and their strength is reflected by the recent

encouraging stock market performance not only in the UK but also in

Germany and France. A boost to confidence, at least in the short term, was

provided in September by the President of the European Central Bank, Mario

Draghi, when he announced plans to buy the debt of struggling European

countries. This bond buying plan was described as potentially unlimited in

size with Mr Draghi pledging to do whatever it takes to save the Euro.

Investors viewed this announcement as one of the strongest signs yet that

the European Central Bank is committed to saving the Euro and stock

markets rallied on the news.

The second major drag on confidence is centred on the USA where the

crucial issue is how Policymakers will deal with the ''fiscal cliff''. This would

potentially represent a €600 billion reverse stimulus because of planned

public sector spending cuts and tax increases. A fiscal contraction on this

scale would possibly plunge the US back into recession and unless

agreement can be reached to extend certain tax benefits and reverse or

delay spending cuts, economic growth will suffer with some commentators

predicting a fall in GDP of 4.0%. No concrete plans have been announced

and uncertainty will weigh on markets unless policymakers make their

intentions clear. Unfortunately, for now at least, attention is heavily focused

on the US Election and there are significant differences in how the two main

parties plan to achieve fiscal balance. However, despite the uncertainty, US

economic data has surprised on the upside; the USA housing market is

showing signs of recovery and the Dow Jones index is flirting with highs not

seen since the start of the credit crisis. Following the European Central Bank

lead, the Federal Reserve Bank announced it would launch a further round

of quantitative easing (QE) with the purchase of mortgage debt until such

time as the American economy improves and unemployment falls to an

acceptable level. The FED also pledged to keep interest rates at record lows

for an indefinite period but at least until 2015. Once again global equity

markets rose on the news with gains in the US, Asia and Europe.

The third area on uncertainty concerns China which is faced with the

enormous task of shifting to a consumption driven economy whilst

maintaining growth in a year that will end with a once in a decade leadership

change. The economy has slowed for 6 consecutive quarters and export

growth is stagnant due to faltering demand from Europe and the US. The

government is pursuing measures to boost the economy, including interest

rate cuts and infrastructure spending. Despite the challenging economic

environment, however, the Hang Seng index has gained over the year

indicating that the majority of investors anticipate a 'soft' landing for China.

Meanwhile in the UK, the Bank of England expects the economy to stagnate

this year with little or no growth. Despite this austere outlook the stock

market indices perform well and the latest 'Dividend Monitor' published by

Capita has revealed that dividends from UK companies grew by 18.4% to

£22.6 billion in the 2nd quarter of 2012. The biggest growth in dividends was

seen in companies within the Footsie 100 index where a 19% increase was

reported, with payouts totalling £19.9 billion.

Quarterly Update 2012 01

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This indicates that cash flow and dividend cover remain strong for large, high

quality companies. We at Greystone continue to favour the equity income

sector and a number of funds which follow this theme feature in our in house

funds and investment portfolios.

Despite a number of confidence busters, stock markets suggest that there

are signs of light at the end of the long dark tunnel of uncertainty and appear

to indicate that there is hope for the future and economies will eventually

improve. Indeed, they always do.

However, the prevailing mood of uncertainty has pushed up the price of safe

haven assets particularly sovereign debt in the UK, US and Germany, to

unsustainable levels. Security is becoming increasingly difficult and

expensive to find but we at Greystone believe that it is better to balance the

trade off of risks --- liquidity, concentration, counter-party, wealth erosion due

to inflation, taxes and spending --- in this ultra low yield environment. We

believe multi asset balanced portfolios with high levels of diversification are

the best safe haven approach in a world with no safe havens. Our in house

funds and portfolios are constructed and blended with this in mind and

continue to perform well producing returns well in excess of cash deposits

albeit with some volatility. The GWM funds are actively managed by our in

house Investment Team allowing us to benefit fully from market trends.

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4.


Table EMC1

Fund performance over the period year-to-date

Fund Name Growth Year-to-date (%)

Conservative Fund +4.50

Cautious Managed Fund +9.70

Balanced Fund +11.10

Global Growth Fund +9.70

FTSE 100 Index +7.60

As always please refer to your usual Greystone Adviser for more information

about the Greystone Funds, Portfolios, investment process and our income

themes.

KWThompson

Chairman

All data provided as at 02.10.2012

Source: Thomson Reuters Lipper Hindsight

Chart F1b

Conservative Fund volatility versus IMA Money Market & FTSE All-Share


IMA Money Market Conservative Fund FTSE All-Share Index

Volatility (%)



The Conservative Fund “Our initial stepping-stone towards investment

portfolios with low risk and solid defensive style

performance.”

Review

As of the 1st September 2012 the Margetts Greystone Sagacious Fund

became the Margetts Greystone Conservative Fund and took its place as our

lowest risk Fund within the suit of the Margetts Greystone Funds.

The objective of the Margetts Greystone Conservative Fund is to achieve

positive returns through the use of a diversified portfolio of investments.

The Fund’s price increased by +2.58% during the three month review period,

whilst the Investment Management Association (IMA) Absolute Return sector

average increased by +2.08%. The FTSE All-Share Total Return Index rose

in value by +4.70% over the same three month period, whereas the 3 month

LIBOR GBP returned +0.19%.

The Greystone Investment Committee (IC) formally made its first investment

for the Conservative Fund on 20th May 2010. Since assuming responsibility

for the Fund, the IC has successfully exited a number of legacy strategies

and only one negligible position remains. The end of quarter Fund price was

at 96.99p.

See below for the Conservative Fund timeline.

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4.



The Fund has increased in value by +4.99% during this transformation

period and +1.18% over the last six months.

This portfolio will benefit existing investors and those that have a constrained

ability and willingness to take risk, coupled with a limited ability for

investment loss.

Portfolio Activity

The IC met their target of fifty per cent exposure to Fixed Interest securities

during the first quarter of 2012. The Fund has now held a conservative style

asset allocation for over seven months and is tactically positioned to deliver

positive investment returns with low levels of volatility.

The Fund’s investment objective is to outperform money market Funds over

a rolling three year period and to achieve this with half the volatility of UK

Equities.

0

4

8

12

16

20

3 Months 6 Months 12 Months TransformationPeriod

We aim to realise this investment return through considered asset allocations

to the three core asset classes.

The IC has disciplined parameters for each of the three core asset classes;

Fixed Interest (money market, corporate & sovereign bonds), Equities (UK &

International) and Alternatives (absolute return & property).

All of our managers delivered positive returns over the quarter under review

across the three core asset classes.

May 2007 Sagacious

Fund launched

Greystone makes

first investment

20th May 2010

Greystone begin

de-risking Fund

November 2011

Sagacious becomes

Conservative

1st September 2012

2007 ‘08 ‘09 ‘10 ‘11 2012

Chart F1a

Conservative Fund time line from launch

-14

-12

-10

-8

-6

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2


Quarterly Update 2012 04 All data provided as at 28.09.2012

The most recent addition to the portfolio was within the Fixed Interest

component and since being introduced has delivered strong profits via

exposures to US high yield bonds and a mixture of both US Dollar and local

currency emerging market debt.

Over the quarter, weakest returns came from one of our Fixed Interest

holdings, short term gilt exposure. This may be attributed to the relatively

weak performance of the gilt market versus Equities.

Chart F1c

Gilt versus Equity performance over last quarter


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2

4

6

8

IMA UK Gilts FTSE All-Share Index

Performance (%)

Our Equity holdings within the Conservative Fund offered solid returns over

the quarter. Our European manager performed well versus many of his

peers, yet did appear to struggle relative to a number of geographies.

Our defensive UK Equity Income manager has consistently performed well

and has delivered strong, positive numbers benefiting from investments in

large blue-chip internationally diverse companies.

This UK Equity Income holding can be expected to experience a lag in

performance during periods of market strength due to its defensive nature,

yet has proven to protect returns during periods of market weakness.

Due to fifty per cent exposure to Fixed Interest, the Conservative Fund holds

a diverse spread of allocations within the Fixed Interest space. This diversity

allows the Fund to maintain its low risk characteristics, yet provide positive,

rewarding returns.

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4.


Being a portfolio suited for investors with a limited capacity for loss and a

constrained willing to incur risk, it offers an alternative to simply holding cash

deposits.

Long-term cash deposits have been significantly eroded by inflationary

impacts, diminishing the purchasing power of capital. Market exposure via

actively managed investment portfolios has helped combat these effects.

Chart F1d

Long-term inflationary impact on cash and Equities over the past 3 years


Nominal return on cash Inflation-adjusted return on cash

Performance (%)

Cash

Fixed Interest

UK Equities

International Equities

Alternatives

Chart F1e

Current Conservative Fund asset allocation

Source: Greystone Wealth Management Investment Team

14%

28% 5%

45% 8%

The following page details the full asset allocation of the Conservative Fund

along with investment parameters.

Fixed Interest Exposures

Fund Name Exposure (%)

Cap Int. Global High Income Opportunities 10.00

Investec Emerging Markets Local Currency Debt 5.00

iShares FTSE UK Gilts 0-5 GBP 5.00

Jupiter Strategic Bond 10.00

M&G Optimal Income 10.00

M&G UK Inflation-Linked Corporate Bond 5.00



See below for the full breakdown of the Conservative Funds’ asset

allocation.

Table F1a

Full Conservative Fund asset allocation

UK Equity Exposures


Trojan Income 10.00

Vanguard FTSE UK Equity Income Index 4.00

International Equity Exposures


CF Ruffer European 8.00

Alternatives Exposures


CF Ruffer Total Return 10.00

Majedie Asset Management Tortoise 10.00

Trojan 8.00

Portfolio investment restrictions

The following chart provides the investment bandwidths for the Conservative

Fund across asset classes.

Portfolio look through

Chart F1f

Conservative Fund investment bandwidths


0%

20%

40%

60%

80%

100%

1 2 3 4

Exposure (%)

Fixed Interest

UK Equities


Alternatives

Performance outlook for Conservative

At Greystone we believe that multi-asset portfolios which are well diversified

across various geographies and asset classes will help in defending your

investments during periods of volatility and grow with rising asset prices.

The outlook for the Margetts Greystone Conservative Fund looks positive.

The IC believes that it has the potential to deliver attractive returns

throughout the economic cycle above the rates achieved on cash deposits

and money market Funds. The investment ideas generated by our in-house

research team allow the IC to rotate between asset classes, depending upon

the risk and return profile of each investment case.

Since the IC began the de-risking of the Conservative Fund we believe it

complements the Greystone suit of actively managed investment portfolios

and provides a real investment alternative to simply holding cash deposits

whilst taking limited levels of risk.

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IMA Money Market Cautious Managed Fund FTSE All-Share Index

The Cautious Managed Fund “Grow the real value of your portfolio with a yield

averaging 4.5% and a high level of growth.”



Review

During the third quarter of 2012 the Fund increased in value by +4.79%,

outperforming the Investment Management Association (IMA) Mixed

Investment 20-60% Shares sector average (previously the IMA Cautious

Managed sector) which saw +3.73% performance.

Since the Cautious Managed Fund changed its mandate on 24th July 2009, it

has delivered +22.83% growth. Over the last six month period the Fund has

grown by +2.75%, outperforming the IMA sector average which saw +1.95%.

The portfolio remains well diversified with exposures across each of the

three core asset classes; Fixed Interest, Equities and Alternatives.

The portfolio performed well over the quarter under review and defended

capital during a period of volatility in asset prices.

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4.



Portfolio Activity

The income generation of the portfolio remains a key theme for the

Investment Committee (IC) with the natural yield generated standing at just

over 4.15%.

The Investment Committee aims to maintain this natural income generation

from a combination of positions in both high yielding Equity Funds and Fixed

Interest investments. However, we do still remain very aware of our mandate

to defend capital and outperform cash over a rolling three year period.

Over the quarter there have been no changes to the asset allocations of the

Fund, although a number of changes have been made to the underlying

exposures with the addition of two new holdings.

Both additions took place during August 2012, the first being within the Fixed

Interest component adding to our Strategic Bond exposure. Our manager for

this holding has delivered strong, positive returns since being introduced to

the portfolio. He holds significant exposure towards Investment Grade Non-

Financials and High Yield which contributes well to the Cautious Managed

Fund’s overall dividend yield.

The second addition was a UK Equity Income product, which also delivered

strong, positive returns since being introduced to the portfolio. The manager

seeks to achieve income with the potential for some capital growth from a

relatively concentrated portfolio of stocks. His portfolio focuses on

undervalued investment opportunities offering sustainable yields and

potential for dividend growth. The core portfolio invests mainly in blue-chip

stocks which offer an increasing dividend, strong cash flow, strong balanced

sheets and a positive earnings outlook.

The IC maintains the view that Equity returns will come from cash-rich blue-

chip companies with strong balance sheets and sustainable dividend yields.

Attribution analysis has indicated that Fund selection in this area has been

valuable. Moreover, the IC continues to favour Equities over Bonds due to

the relative valuation differential.

Chart F2a

Cautious Managed Fund versus cash & Equity markets over last quarter


Performance (%)

As an example of the oscillations experienced, the FTSE All-Share TR Index

fell from peak to trough during the quarter by -3.64%, but ended the third

quarter of 2012 up by +4.70%.

0

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4

6

8

10

12

14

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18

Jan-89 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10

0

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400

600

800

1000

1200

02-Jan-07 02-Jan-08 02-Jan-09 02-Jan-10 02-Jan-11 02-Jan-12

-5

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Chart F2b

Yields achieved on cash, Gilts & Equities since 1989

Source: Schroders, FT, BoE

Cash Gilts UK Equities

Yield (%)

Cash

Fixed Interest

UK Equities


Alternatives

28%

9% 4%

31% 28%



All of our managers for the Cautious Managed Fund delivered positive

returns over the quarter under review across the three core asset classes.

Over the quarter, all underlying holdings performed well, even the weakest

performer still posted a figure of +1.36% growth.

Our Fixed Interest Funds offered solid returns for the portfolio over the

quarter. Our Strategic Bond holdings delivered strong returns as credit

spreads tightened further and liquidity improved. Our Emerging Market Debt

manager lagged slightly, yet provided returns of +3.29% over the quarter

even with Emerging Market local currency weaknesses

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The Equities component, both UK and International, also offered strong,

solid returns over the quarter. Our managers with more economically

sensitive portfolios performed better relative to those with more defensive

and less cyclical portfolios.

Our Absolute Return manager struggled somewhat during the quarter due to

their Japanese Equity exposure, however the manager maintains their

conviction that Japan’s Equity market remains excellent value and is due a

re-rating from historically low levels.

Chart F2d

UK Credit Spread – Credit quality

Source: Merrill Lynch

UK Credit UK AAA Credit UK AA Credit UK A Credit

UK BBB Credit

bps

Chart F2e

Current Cautious Managed Fund asset allocation


The following page details the full asset allocation of the Cautious Managed

Fund along with investment parameters.

Chart F2c

Currencies relative to UK Pound Sterling over last quarter


US Dollar Turkish Lira Brazilian Real

Performance (%)

0%

20%

40%

60%

80%

100%

1 2 3 4



Fidelity Strategic Bond 5.00

Investec Emerging Markets Local Currency Debt 5.00

Jupiter Strategic Bond 8.00

Legal & General Dynamic Bond Trust 5.00




See below for the full breakdown of the Cautious Managed Funds’ asset

allocation.

Table F1a

Full Cautious Managed Fund asset allocation

UK Equity Exposures


Fidelity Enhanced Income 5.00

Schroder Income Maximiser 5.00

Trojan Income 8.00

Vanguard FTSE UK Equity Income Index 10.00



Newton Asian Income 8.00

Newton Global Higher Income 10.00

Sarasin International Equity Income 10.00

Alternatives Exposures


CF Ruffer Total Return 9.00


The following chart provides the investment bandwidths for the Cautious

Managed Fund across asset classes.


Chart F1f

Cautious Managed Fund investment bandwidths


Exposure (%)

Performance outlook for Cautious Managed



investments during periods of volatility and grow when asset prices rise in

value.

The outlook for the Margetts Greystone Cautious Managed Fund looks

positive. The IC believes that it has the potential to deliver attractive returns

throughout the economic cycle alongside a solid yield since the investment

ideas generated by our in-house research team allows the IC to rotate

between asset classes, depending upon the risk and return profile of each

investment case.

The investment mandate for the Margetts Greystone Cautious Managed

Fund is threefold; to outperform the IMA Money Market sector average, the

IMA Mixed Investment 20-60% Shares sector average and generate a solid

yield. The Fund has demonstrated an ability to meet the mandate as year-to-

date figures show the Fund with +9.70 growth, the IMA Money Market with

+0.44% and the IMA Mixed Investment 20-60% Shares with +6.28%. The

Fund is currently generating a look through yield of +4.15%.

The Fund has both an absolute return and a relative return benchmark.

Therefore, the IC remains cautious, but opportunistic in Fund selection and

asset allocation.

Fixed Interest

UK Equities


Alternatives

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Review

During the third quarter of 2012 the Fund increased in value by +6.66%,

outperforming the Investment Management Association (IMA) Mixed

Investment 40-85% Shares sector average (previously the IMA Balanced

Managed sector) which saw +4.58% performance.

Over the last six months the Fund has grown by +1.97% and the IMA sector

average by +1.06%. Since the Balanced Fund changed its mandate on 30th

September 2010, it has delivered +10.29% growth.

The portfolio remains well diversified across Fixed Interest and Equities,

taking strategic positions across several geographies.

The Fund has held the ability to invest in Fixed Interest securities (sovereign

and corporate), Equities (both UK and International) and Alternatives

(Absolute Return and Property) since its mandate change. This flexibility to

rotate between asset classes continues to help smooth the volatility of the

portfolio over the course of the economic cycle.

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4.



Portfolio Activity

The portfolio performed well over the quarter under review with no changes

made to the asset allocation of the Fund, although a number of changes

have been made to the underlying exposures with the addition of two new

holdings.

Both additions took place during August 2012, the first being within the Fixed

Interest component adding to our Strategic Bond exposure. Our manager for

this holding has delivered strong, positive returns since being introduced to

the portfolio. He holds significant exposure towards Investment Grade Non-

Financials and High Yield.

The second addition was a UK Mid-Cap Equity product, which has, over the

last quarter, delivered exceptional growth at +10.19%. Its objective being to

achieve capital growth from medium sized UK companies.

All of our managers for the Balanced Fund delivered positive returns over the

quarter under review across all asset classes and geographies.

Over the quarter, all underlying holdings performed well, the weakest

performer being our US Equity Index Tracker Fund, which still posted returns

of +3.03% over the period.

The Balanced Fund “Take a balanced approach to investing and enhance

the potential of long-term income and growth.”

Chart F3a

Balanced Fund performance versus FTSE All-Share


Balanced Fund FTSE All-Share Index

Performance (%)

Chart F3b

Balanced Fund volatility versus FTSE All-Share


Volatility (%)

0

3

6

9

12

15

18

3 Months 6 Months 12 Months Mandate Change

Balanced Fund FTSE All-Share Index

Portfolio Activity

Cash

Fixed Interest

UK Equities

Europe

North America

Asia Pacific ex Japan

Emerging Markets

36%

10%

9% 9% 4%

17%

15%

Our Fixed Interest Funds offered a solid base for the portfolio over the

quarter. Our Strategic Bond Funds delivered solid returns as credit spreads

continued to narrow and liquidity improved.

Our UK Equity Funds offered a mixture of positive returns. Our defensive,

less cyclical style manager appeared to lag slightly as our managers with

more economically sensitive portfolios performed relatively better.

Our European managers saw positive return contributions over the quarter.

Our themes surrounding Europe during the second quarter 2012 were of

European stocks standing at historically low levels and could potentially offer

strong investment returns over future quarters. These themes appear to

have come to fruition.

Asia continues to be one of our favoured geographical regions due to the

growing levels of domestic consumption, positive demographics along with

strong economic and earnings growth. The IC believes that developed World

Equity markets also offer significant value, particularly on an Equity yield

basis relative to sovereign debt yields. Our Asian Equity holding produced

strong return contributions over the quarter.

North America and our US Equity Index Tracker holding performed relatively

well during the review period, although the US Dollar did weaken against the

Pound by -2.87%.



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4.


The IC maintains the view that investment returns shall come from

companies that have strong cash flows and secure yields, as investors

reward companies that are not highly leveraged and are able to invest in

their own business.

Price to Earnings (P/E) ratios show that Equities look relatively cheap and

may indicate future sustained growth. A forward P/E ratio uses a company’s

projected future earnings instead of its most recent earnings. The shaded

area shows one standard deviation away from the mean P/E ratio.

Chart F3e

Current Balanced Fund asset allocation


The following page details the full asset allocation of the Balanced Fund


Chart F3c

Sector performance over past quarter


FTSE All-Share Index IMA Europe IMA North America

IMA Asia Pacific IMA Japan IMA Global Emerging Markets

US Dollar

Performance (%)

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-3

-1

1

3

5

7

9

11

13

Chart F3d

FTSE 100 Index Price to Earnings Ratios

Source: FACTSET (Artemis), Thomson Reuters Lipper Hindsight

Next 12 months µ-ơ (LHS) Next 12 months average (LHS)

Next 12 months P/E (LHS) FTSE 100 CR Index (RHS)

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

6 x

7 x

8 x

9 x

10 x

11 x

12 x

13 x

14 x

15 x

16 x

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FTSE 100 P/E Ratios FTSE 100 CR Level

0%

20%

40%

60%

80%

100%

1 2 3 4



Fidelity Strategic Bond 5.00

Legal & General Dynamic Bond Trust 5.00




See below for the full breakdown of the Balanced Funds’ asset allocation.

Table F1a

Full Balanced Fund asset allocation

UK Equity Exposures


Artemis Income 7.00

Trojan Income 7.00

Franklin UK Mid-Cap 5.00

M&G Recovery 5.00

Majedie Asset UK Equity 9.00

Old Mutual UK Select Mid-Cap 3.00



Jupiter European 7.00

Liontrust European Growth 8.00

Vanguard US Equity Index 10.00


Aberdeen Emerging Markets 9.00


The following chart provides the investment bandwidths for the Balanced

Fund across asset classes.


Chart F1f

Balanced Fund investment bandwidths


Exposure (%)

Performance outlook for Balanced



investments during periods of volatility and grow when asset prices rise in

value. It is probable that the Equities component of the portfolio will generate

the majority of returns (and risks) over the medium-term within the Balanced

Fund, although it is important to note that exposure to Fixed Interest

securities will help diversify the portfolio, dampen risks and smooth the

returns of the Fund going forward.

The Margetts Greystone Balanced Fund does not currently hold exposure to

the Alternatives asset class, although the IC continues to review suitable

Absolute Return Funds for the portfolio.

The portfolio remains well diversified across asset classes and geographies.

The IC remain acutely aware of current and future Equity market volatility.

The exposures held towards International companies and the increasing

concentration towards large-cap blue-chip stocks will help the Fund defend

capital during periods of increased volatility.

Fixed Interest

UK Equities


Alternatives

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Review

During the third quarter of 2012 the Fund increased in value by +5.58%

outperforming the Investment Management Association (IMA) Global sector

average which saw +4.77% and the comparable FTSE World excluding UK

GBP Total Return Index which saw +3.92%.

Over the last twelve months the Fund has grown by +14.87% and the IMA

sector average by +12.97%. Since the Global Growth Fund launched on 5th

December 2005, it has delivered growth of +54.27%, outperforming both the

IMA sector average with +25.51% growth and the FTSE World excluding UK

GBP Index with +39.82%.

The IC maintained the Fund’s strategic geographical allocations throughout

the third quarter of 2012. The Fund has faired better than many International

Equity markets.

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4.



Portfolio Activity

The Global Growth Fund “Achieve global market exposure from a sector

leading portfolio with best competitive

performance over 6 years.”

Chart F4a

Global Growth Fund performance versus International Equity sectors


Global Growth Fund IMA Global IMA Asia Pacific

IMA North America IMA Japan IMA Global Emerging Markets

Performance (%)

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-3

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1

3

5

7

The portfolio performed well over the quarter under review with no changes

made to the asset allocation of the Fund.

Nearly all of our managers for the Global Growth Fund delivered positive

returns with the exception of our Japanese Equity manager. Our Japanese

manager aims to achieve capital growth through investments in companies

operating in Japan.

Our UK and European Equity Funds offered positive returns over the quarter.

Our UK manager outperformed his respective IMA sector average. Both our

European managers struggled versus the IMA Europe excluding UK sector

average amid signs of stress remaining across Europe with Spanish yields at

10.8% and Greek yields at 22.9%. The more cyclically focused businesses

struggled relative to defensive stocks as investor risk appetite declined.

Our Asian managers offered strong returns outperforming the IMA Asia

Pacific excluding Japan sector average over the quarter. Those managers

being growth orientated performed better than those focused on large-cap

cash generative and high yielding companies.

Our US managers offered positive, yet mixed performance over the quarter

under review. Those of a multi-cap and highly diversified orientation offered

some of the strongest US performance.

Cash

UK Equities

North America

Europe

Japan

Asia Pacific ex Japan

Emerging Markets

36%

12%

26%

10% 2% 9%

5%

Chart F4b

Current Global Growth Fund asset allocation


The following page details the full asset allocation of the Global Growth Fund


0%

20%

40%

60%

80%

100%

1 2 3 4



See below for the full breakdown of the Global Growth Funds’ asset

allocation.

Table F4a

Full Global Growth Fund asset allocation

UK Equity Exposures


Schroder UK Alpha Plus 9.00



North America

Baillie Gifford American 9.00

GLG American Growth 8.00

Schroder US Smaller Companies 9.00

Vanguard US Equity Index 10.00

Europe

Jupiter European 7.00

Liontrust European Growth 5.00

Japan

GLG Japan CoreAlpha 5.00

Asia Pacific

Fidelity Inst South East Asia 8.00

First State Asia Pacific Leaders 9.00


Emerging Markets

Aberdeen Emerging Markets 10.00


The following chart provides the investment bandwidths for the Global

Growth Fund across asset classes.


Chart F4c

Global Growth Fund investment bandwidths


Exposure (%)

Performance outlook for Global Growth

The Margetts Greystone Global Growth Fund now has a near seven year

history and since its launch in December 2005 it has outperformed its IMA

Global sector average and the comparable FTSE World excluding UK GBP

Index. At Greystone we believe that the Global Growth Fund is well

positioned given the current economic climate and the outlook over the

longer-term to continue to provide strong positive returns going forward.

Valuation metrics such as; price to earnings ratios, relative yields and

earnings levels, suggest that many Equity markets appear to be relatively

inexpensive and are offering good value. Nevertheless, asset price volatility

seems to be a theme that will be with us for the near-term. Policy-makers in

the developed world have difficult decisions ahead of them; needing to

reduce debt and try to boost economic growth.

We maintain a diverse portfolio of investments with allocations across the

market capitalisation spectrum and geographies with the Fund invested in

over 30 countries worldwide. Global economic growth is expected to be

positive over the remainder of 2012 and into 2013. We believe that this will

help in delivering solid Equity market returns.

Our overweight positions in faster growing emerging economies, balanced

with significant weightings to companies with strong cash flows in the

developed world, offers a robust risk versus return investment profile.

Fixed Interest

UK Equities


Alternatives

10% max

0% min

20% max

0% min

100% max

60% min

10% max

0% min

Notes




Foundation House, Scott Drive, Altrincham

Cheshire, WA15 8AB

A trading name of R W Harris Ltd which are authorised and regulated by the

Financial Services Authority.

GREYSTONE

This quarterly document does not constitute a form of financial advice and

should not be relied upon. This is provided for information only.

At Greystone we seek to guide you with your investment strategies by

assessing and continually checking the levels of investment risk you are

willing and able to take, thus ensuring suitable investments are made on

your behalf.

The qualities offered include:

✓ Track Record of building lasting relationships across parties.

✓ Active Management for strategic and tactical allocations.

✓ Desired Access to the whole investment universe.

✓ Research Strength via a robust and repeatable process.

✓ Adviser Commitment with transparent and regular reporting.

✓ Tailored Approach in-line with requirements and objectives.

IMPORTANT INFORMATION

Past, simulated past or future projected performance is not a reliable

indicator of future performance and may not be repeated. Investment

markets and conditions can change rapidly and as such any views

expressed herein should not be relied upon when making investment

decisions. Neither the payment of dividends or return of capital is implied or

guaranteed. There is a risk of loss of capital. Rates of exchange may cause

the value of investments to go up or down. The information and any opinions

expressed herein may change at any time and therefore this document does

not constitute investment, tax, legal or other advice or recommendation or an

offer to sell or an invitation to apply for any product or service. Investors

should consider carefully whether an investment in this fund or portfolio is

suitable in light of circumstances and resources.

Documents

Quarterly Update Fund & Market Commentary